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Group-6
Abhimanyu MiglaniAnkit Tibra
Garima Pant
Mehar Ahluwalia
Siraj Raja
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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 ,BestBuy &
Circuit City
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Current IssuesRecord Companies have asked ADS to help with
thelogistics of VMI agreement
Retailers want ADS to ship directly to individual stores-Higher
expenses for ADS
Dealing with increasing shipping cost
Increasing competition from online audio
distributiontechnologies
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VMI Business model in which buyer provides supplier with
certain information
Supplier take full responsibility of maintaining
certaininventory level at buyers location
Goal of VMI is to eliminate retailer oversight onspecific
orders
Eg- Wal-Mart and P & G association
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Record companies will decide amount and time of eachdelivery
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
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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
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How will this impact ADSs business?
Transportation
Maintenance
Inventory Holding
Enhanced
Costs
Strong incentives
Good Buyer-SupplierRelationship
Upgraded information system
OtherEffects
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How can ADS take advantage of
this?ADS can enhance their distribution & inventory
management capabilities to prepare itself towardsgeneral trend
of VMI in industry
Strong customer relationship
Increased proximity with the customers will lead tobetter
understanding of market demand
Increased market share
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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
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Why are large retailers moving
towards direct shipment model?
Reduced Complexity
Reduced Costs
Time-Saving
