This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied,
or distributed without the prior consent of the publisher.
This case is useful as a general example of purchasing strategy implementation.
crosses several chapters, and can be used near the end of a course to illustrate the integration
of many different concepts discussed in the book.
As always, the instructor should adopt
his/her own teaching style to the case.
The company described is a real example, but the name
has been disguised.
The authors have found that a good way to teach this case is to begin with a general overview
of the computer industry.
Some of the key issues that should be drawn out in this introductory
discussion include the short product life cycles in the industry, the volatility of demand, and the
pressure for cost reductions, driven by the fact that computers are increasingly becoming a
mass market commodity item.
This can then lead to a discussion of how this has affected
Digitex, which has been traditionally a mainframe company, and how it has had to adopt to
Some key issues that should come out are how Digitex changed its corporate
strategy, and went through a period of re-engineering where thousands of personnel were laid
This should then lead to a progressive discussion of how this has affected their sourcing
A key point is that the sourcing strategy was driven by customer requirements and
competitive forces, and that the strategy had to be aligned with the other manufacturing,
technology, marketing, and overall corporate strategies at Digitex.
Following this broad
overview of Digitex’s strategic positioning in the market, the instructor can begin to address
each the questions below.
Depending on the time available and the student’s program in
covering the chapters, not all of the questions may be addressed in an hour and a half class
To support the JITQC initiative, Digitex renamed purchasing "Supplier Manufacturing."
What is the significance of this change?
This was an important change, although it was only a change in name.
This reflects a
change in Digitex’s sourcing paradigm.
No longer are suppliers seen only as “vendors”
who ship materials, but they are now seen as an external manufacturing resource, which
suggests that they are an extension of the company.
Moreover, purchasing is now
responsible for managing this external resource, and is responsible for harnessing all of
their capabilities and expertise, and not just purchase materials from them.
includes supplier integration into new product development, supplier co-location and
management of inventories, and information system integration.