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Audio Duplication System

ADS is a major player in the compact disc and cassette duplication market. It has several large record companies and retailers like Walmart and Best Buy as customers. These customers are now asking ADS to help with vendor managed inventory agreements and ship directly to individual stores. This will increase ADS' expenses from higher shipping costs and competition from online distribution. However, VMI can reduce inventory costs for customers and improve their response time. ADS should enhance its distribution and inventory capabilities to gain from this industry trend, and hire third-party logistics to efficiently manage the increased responsibilities while focusing on emerging trends.

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Patrick Smith
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© Attribution Non-Commercial (BY-NC)
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562 views

Audio Duplication System

ADS is a major player in the compact disc and cassette duplication market. It has several large record companies and retailers like Walmart and Best Buy as customers. These customers are now asking ADS to help with vendor managed inventory agreements and ship directly to individual stores. This will increase ADS' expenses from higher shipping costs and competition from online distribution. However, VMI can reduce inventory costs for customers and improve their response time. ADS should enhance its distribution and inventory capabilities to gain from this industry trend, and hire third-party logistics to efficiently manage the increased responsibilities while focusing on emerging trends.

Uploaded by

Patrick Smith
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Group-6 Abhimanyu Miglani Ankit Tibra Garima Pant Mehar Ahluwalia Siraj Raja

Audio Duplication Services


Compact disc & Cassette Duplication & Distribution

company B2B company. Large record companies constitute its customer base One of 6 big players in the market Has about 20% of the $5 billion market Boasts of big client names Wal-mart, Kmart ,Best Buy & Circuit City

Current Issues
Record Companies have asked ADS to help with the logistics of VMI agreement
Retailers want ADS to ship directly to individual storesHigher expenses for ADS Dealing with increasing shipping cost Increasing competition from online audio distribution technologies

VMI
Business model in which buyer provides supplier with

certain information Supplier take full responsibility of maintaining certain inventory level at buyers location Goal of VMI is to eliminate retailer oversight on specific orders Eg- Wal-Mart and P & G association

Record companies will decide amount and time of each

delivery
Record companies have to be provided with

continuously updated POS data from each store


Record companies will own the inventory until it is sold

ADS will help with the logistics of VMI agreement

Why are ADSs customers moving towards VMI agreements?


They want to reduce inventory holding costs and

expenses related to managing inventory


Reduced bullwhip effect Reduced forecast uncertainties & improve overall

service level
Quick Response time

How will this impact ADSs business?

Enhanced Costs Other Effects

Transportation Maintenance Inventory Holding

Strong incentives Good Buyer-Supplier Relationship Upgraded information system

How can ADS take advantage of this?


ADS can enhance their distribution & inventory

management capabilities to prepare itself towards general trend of VMI in industry


Strong customer relationship
Increased proximity with the customers will lead to

better understanding of market demand


Increased market share

How should ADS manage logistics?


ADS should hire Third-party logistics for management because Logistics is not its core competency Its responsibilities have enhanced It will be able to focus on emerging trends and gain competitive advantage Cost saving- Transportation, Technological & Inventory costs

Why are large retailers moving towards direct shipment model?

Reduced Complexity Reduced Costs Time-Saving

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