Course: Operation Management

SCENARIO/ ETHICAL DILEMMA /CASE

In this lean operations world, in an effort to lower handling costs, speed delivery, and reduce inventory, retailers are forcing their suppliers to do more and more in the way of preparing their merchandise for their cross-docking warehouses, shipment to specific stores, and shelf presentation. Your company, a small manufacturer of aquarium decorations, is in a tough position. First, Mega-Mart wanted you to develop bar-code technology, then special packaging, then small individual shipments bar coded for each store. (This way when the merchandise hits the warehouse, it is cross docked immediately to the truck destined for that store, and upon arrival the merchandise is ready for shelf placement.) And now Mega-Mart wants you to develop radio frequency identification (RFID)immediately. Mega-Mart has made it clear that suppliers that cannot keep up with the technology will be dropped. Earlier, when you didnt have the expertise for bar codes, you had to borrow money and hire an outside firm to do the development, purchase the technology, and train your shipping clerk. Then, meeting the special packaging requirement drove you into a loss for several months, resulting in a loss for last year. Now it appears that the RFID request is impossible. Your business, under the best of conditions, is marginally profitable, and the bank may not be willing to bail you out again. Over the years, Mega-Mart has slowly become your major customer and without it, you are probably out of business.

Question 1.

As a seller, provide TWO (2) opinions on fulfilling the customer request concerning the RFID implementation. ( 20 marks)

You are required to cite sources within the body of your paper and at the end of the paper in your reference section (if any).