Abstract

The caselet throws light on how outsourcing of core business functions like distribution or manufacturing could lead to serious problems for a company. Xilinx, a renowned supplier of electronic parts depended entirely on distri-butors for selling its products. This approach nearly cost the company its most valuable customer Cisco. The caselet throws light on how Xilinx restructured its distribution system. The caselet also describes the Vendor Managed Inventory (VMI) program initiated by Xilinx as part of supply chain restructuring to decrease the overall supply chain costs.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The pros and cons of outsourcing core busi-ness activities
• Using an online store for better inventory management
• and Imple-menting a Vendor Managed Inventory (VMI) program.

Keywords

Supply Chain Management, Outsourcing, Xilinx, Cisco Systems, Virtual Direct Program, Vendor Managed Inventory (VMI), Demand-pull system, Lead time