After reviewing all of the requirements of Investor Group A as well as multiple supply chain strategies it is recommended that a Keiretsu network is implemented. By employing the Keiretsu network strategy the group of investors not only owns the production facility but also have the opportunity to invest in and/or own suppliers to ensure the lowest costs. The Keiretsu network is the best choice for Investor group A because it is part collaboration part purchasing from a few suppliers and part vertical integration. It combines the benefits of using few suppliers such as suppliers having a large commitment to the buyer and more likely to have a better understanding of the broad objectives of the manufacturer and the end consumer. The Keiretsu network provides an assured price structure, predictable inventory and delivery schedules as well as clear quality and performance standards. A stable environment such as this close cooperation between the supplier and the manufacturer can lead to quality improvements, continual product development and reductions in cost. As stated before vertical integration is a component of the keiretsu network, with vertical integration the manufacturer has the ability to produce supplies that were previously purchased or to actually buy a supplier. Advantages of this would be inventory reduction and scheduling, cost reductions, and adherence to quality standards. The strategy of using many suppliers and playing them against one another is a strategy that is best used when the products are commodities and maintaining long term relationships is not a goal with this strategy.
Measuring supply chain performance is essential for supply chain managers to be able to make correct and effective decisions as far as scheduling and quantity decisions, which determines the amount of assets committed to inventory. There are several metrics that can be used to measure the supply chain performance. One area of measurement is vendor performance....