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AI Electronics, Inc
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A1 Electronics Presentation
Due: 3/5 Dec
150 pts total (100 pts – paper; 50 pts presentation)
Company Background
A1 Electronics is a global distributor of electronics and high-tech products. This world-class
organization serves consumer and business markets in the Far East, Western Europe, and North
America. A1 Electronics is among the top ten distributors of electronic equipment industry, amassing
$3.3 billion in sales during their latest fiscal year. This represents a 4.5 percent increase over the
previous year, although after tax profits remained flat at approximately $140 million. Their current
profit margin is 4.2 percent, roughly half of the industry average and far behind industry leaders like
Sony, JVC, Dell, and Thompson Electronics.
The Good Years – Growth and Innovation
From 2000 to 2015, A1 Electronics was one of the most innovative, profitable, and fastest
growing companies in the industry. They led consumers into the digital age with the earliest and best
DVD-players, digital camcorders, LCD flat screen televisions, video game consoles, and other
blockbuster products. The business division was also an industry leader, as A1 Electronics regularly
beat competitors to market with new business tools like colour laser printers and copiers.
The Lean Times – Mistakes, Missteps, and Heavy Competition
The last few years have been very challenging for A1 Electronics. Their growth slowed to a
crawl as the company failed to keep up with a rapidly changing industry. A1 Electronics costly and
time-consuming efforts to diversify into new product lines (e.g., notebook computers and servers)
were met with stern competition. A1 Electronics also miscalculated the market’s interest level in smart
phones, tablets, wearable technology, and the newest generation of video gaming systems.
The focus on diversification also caused A1 Electronics to lose sight of major industry changes. Rapid
breakthroughs in technology have caused product life cycles to become shorter and shorter. Other
companies have responded by trimming inventories to avoid product obsolescence, changing
production to a modular build-to-order strategy, and streamlining their supply chains. A1 Electronics
finds itself regularly missing key product introduction dates and dealing with unhappy retailers whose
shelves are replenished inconsistently.
These were challenges to the company even before the global pandemic. The pandemic merely
exacerbated the issue, exposing the flaws in A1 Electronics’ strategic approach and how the company
has managed their supply chain network. In short, the company has not proven to be very resilient
and is poised to fall further behind if they continue along the current path. The problems have not
gone unnoticed by Dieter Dvorak, the CEO. He fired U.S. operations executives and replaced them
with Mary Kurri. She must correct the internal problems that are creating kinks in A1 Electronics’ U.S.
supply chain as well as develop the capability to be resilient when faced with market disruptions.
Mary, in turn, has called upon your team for help.
AI Electronics, Inc
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U.S. Supply Chain Problems and Opportunities
Over the past few years, A1 Electronics has struggled to respond to customer demands in a
cost-effective manner. At the same time, A1 Electronics cannot seem to tear down its “functional
silos” and adequately integrate internal activities – a common problem in the evolution of supply chain
capabilities. Moreover, the results of a recent benchmarking study suggest that A1 ELECTRONICS is
clearly not among the supply chain innovators. Alas, it appears that A1 ELECTRONICS trails its major
competitors in nearly every facet of supply chain management, including fulfilment performance, cost
control, and customer service. The overall performance gap from industry standards especially has
become more glaring since the pandemic began. A1 ELECTRONICS has nowhere to go but up, and your
team has a great opportunity to help make it happen.
The first step is to analyse and document A1 ELECTRONICS’s current activities to provide a
baseline understanding of performance and costs (descriiptive/diagnostic). Next, these metrics should
be benchmarked against industry best practices. Finally, alternative opportunities to improve service
and/or reduce costs can be identified and quantified (predictive and prescriiptive).
Table 1. PEC Product Lines
Product Class Sample Products Percent of Sales
Business Equipment Networking equipment, office
copiers, phone systems, etc.
10
Business Supplies Consumable products (e.g.,
toner) and replacement parts
4
Home Office Equipment Printers, fax machines,
routers, etc.
18
Home Office Supplies Consumable products (e.g.,
inkjet cartridges) and
replacement parts
2
Consumer Electronics TVs, DVD players, smart
phones, etc.
59
Personal Computers Desktop and notebook
computers
7
The following outline the two deliverables for this project; a professional report of 1K word limit and
a group presentation. Submit a copy of your paper to Canvas by 0700, 3 Dec.
1. A1 ELECTRONICS Problem Identification – Discuss WHY A1 Electronics is having the problems
identified in the case from the data they ‘see.’
a. Highlight two distinct problems and support with data. (20 pts)
b. Analysis (Supply Chain Opportunities) – What do you PREDICT will occur with the
network’s efficiency and effectiveness if A1 Electronics does not manage its demand
well? Discussion of this prediction should include supply chain functions that would
be impacted (e.g., transportation, supply, distribution). (20 pts)
c. Which region (and manager) is the most efficient and effective? Provide support. (20
pts)
AI Electronics, Inc
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2. Implementation – Indicate the problem with A1 Electronics you believe is the most critical to
resolve. Address how you would implement the solution, which would include addressing the
following timelines. (40 pts)
a. Evaluate the short-term operational impact on A1 Electronics’ efficiency (0-12
months).
b. Evaluate the long-term strategic impact on A1 Electronics’ efficiency and
effectiveness (1-5 years).
The word limit for the paper is 1K.
Please submit the three questions and their subparts in a word file:
(Last name1_Last name2_Last namexx_A1 Electronics). Use the outline above to answer the
questions for your report.
Part II
• Work with the data file ‘supplier_data_final_fall24’
• Use any software (Excel, Tableau) and indicate which you have used.
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