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Department of Operations Management
(ORM300T)
GROUP ASSIGNMENT 2 -SEMESTER 2 2021
GROUP OF 3 MEMBERS ONLY
SUBMISSION DATE: 03 FEBRUARY 2021
Total Marks:
SUBJECT NAME: OPERATIONS MANAGEMENT II
Group Assignment
Subject Lecturer: Dr KS Nyakala
External Moderator: Dr N Madonsela
N DIP: OPERATIONS MANAGEMENT
NB* A zero mark will be given to any student who submit as an individual
assignment or work
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Requirement for the group assignment
1. Content list
2. Preparation (numbering of topic, sub-topics and proper sequencing)
QUESTION 1 [16]
CASE STUDY 1: THABANG VAN WYK IT SUPPLIERS
1.1 Read the case study below and answer questions that follow:
“In 2015, Thabang van Wyk IT Suppliers (TvWTS) did what would seem to be a near
impossible task. It began doing business with 5,000 suppliers over the Internet-sending
purchase orders, receiving invoices and paying suppliers, all using World Wide Web as
its transaction-processing network”. Setting up 5,000 suppliers to do business on the
Internet was relatively easy compared to the resistance of suppliers to link to TvWTS via
EDI (electronic data interchange). Suppliers who did not have large contracts with
TvWTS balked at EDI because of the expense of special software and a VAN (value-
added network) that were needed to do EDI. No such problem with using the Internet:
Suppliers do not need special software or a costly VAN to do business with TvWTS.
The Internet’s simplicity reduces costs for TvWTS and its suppliers. TvWTS estimated
that it saved R25 in 2015 by moving procurement to the Web, and believes that is only
the tip of the iceberg. Much of the savings came from eliminating intermediaries. TvWTS
uses the Web to manage multiple tiers of suppliers and as a tool to work with suppliers
to improve quality and reduce costs. But cost reduction was not the only reason TvWTS
switched to Internet procurement. Web-based procurement is a key part of its supplier
management strategy: TvWTS sees great value in using the Internet to collaborate with
suppliers and tap into their expertise much more rapidly than previously. “The Internet
will also allow TvWTS to collaborate with suppliers over scheduling issues. If the
company wants to increase production of a certain product it will be able to check with
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component suppliers and determine if suppliers can support the increase. If there are
schedule cutbacks, it will be able to notify suppliers almost instantaneously and excess
inventory can be avoided”. And although supply chains are viewed as sequential, TvWTS
does not necessarily want to manage them that way. Rather, it wants to use the Internet
to manage multiple tiers of suppliers simultaneously. An example of this is how it deals
with CMs (contract manufacturers). The company sends forecasts and purchase orders
to the CMs for the printed circuit boards they supply. It also gives all the component
manufacturers the requirements and they ship parts directly to the CM. The company
estimates it saved in excess of R15 million in 2015. “The savings were the difference
between contract manufacturer’s price for components used on the boards and TvWTS’
s price that it had negotiated with component suppliers”. Because the Internet is
becoming crucial to TvWTS’ s supplier management strategies. TvWTS is trying to make
it easier for suppliers to do business over the Web. The company has developed a Web-
based portal to provide a single entry point to TvWTS. As is the case with most large
companies. TvWTS has multiple interfaces with its suppliers, including engineering,
quality, as well as purchasing, and typically suppliers have to connect to separate URLs
(universal resource locators) in a company. TvWTS’ s portal provides a single point of
entry for suppliers, making it easier for suppliers to do business with TvWTS and
increasing the speed of the supply chain. Speed is vitally important in the electronics
industry due to very short product life cycles. If products do not get to the market quickly,
most of the profit opportunity is lost. Still another benefit envisioned by TvWTS will be
the ability to form strategic alliances with some of its suppliers. In the past, the fact that
many suppliers used by TvWTS for its production processes were as far as 5,000
kilometres away made it difficult to build strategic alliances with them. TvWTS believes
that using the Internet will strengthen relations and enable it to develop alliances. “The
Internet also will play an important role in TvWTS’s general procurement. TvWTS was
doing EDI with core production suppliers, but not with other forms of general
procurement. Purchasers were still faxing and phoning orders, which is timely and
costly”.
1. How did TvWTS achieve cost reductions by the Internet for procurement? (3)
2. What advantage did TvWTS’s use of the Internet have for small suppliers? (3)
3. Aside from cost reduction, what major value does TvWTS envision for its
interaction with suppliers? (3)
4. How does use of the Internet for procurement reduce mistakes? Indicate how
using the Internet made that benefit possible. (4)
5. How does having a Web-based portal help TvWTS’s suppliers? (3)
QUESTION 2 [18]
CASE STUDY 2: QUALITY AT ABC (PTY) Ltd
Protect life. Protect truth. That is the mission of ABC (PTY) Ltd, the company that
produces public safety technologies such as Taser electrical smart weapons and body
cameras for law enforcement around the globe. In business since 1993, the company
manufactures three weapons lines inside its high-tech headquarters in Scottsdale,
Arizona. Ninety-nine percent of its customers are in law enforcement, military,
