Talleres Auto(TA) is an SME based in Barcelona. TA attends to broken-down vehicles, providing a roadside repair and recovery service.
Two of the parts that TA frequently uses are starters and alternators, which were obtained from a local distributor. I turn, the local distributor ordered parts from a prime distributor.Starters and alternators were obtained from a remanufacture, who replaced the windings and tested the products using parts bought from a component supplier. A diagram of this part of the supply chain is show i Figure 1.12
Component supplier > Remanufactured > prime distributor > local distributor > installer
Talleres Auto is the installer
TA buys starters and alternators from a local distributor
the local distributor buys from a prime distributer
the prime distributor buys from a remanufactured
the remanufactured buys components from a component supplier
The Tallers Auto supply chain
Most of TA’s customer made ‘distress purchases’ - their car had broken down and they wanted it to be fixed quickly. So TA needed a fast replacement service from the local distributor both recognized the need for fast replacements, the performance of the purchasing department at the remanufactured was measured on cost savings.Thus the component supplier thought that the name of the game was low cost