Abstract

Pradeep Dutta (Dutta), proprietor of Xtra Power Group, found himself on the horns of a dilemma. He was expecting a surge in the demand for batteries in India – both for the new line of open shielded batteries as well as for the reconditioned batteries (which had more margins), but wondered whether he would be able to meet the demand considering the supply chain issues he was facing. Some of Xtra Power’s prominent retail partners were unhappy about the used batteries that they had collected from customers for reconditioning and how these were piling up at their facility, increasing their warehousing costs. Upon further investigation, Dutta found that the major problem lay with its longstanding transportation services provider, Cretto Logistics (Cretto), which had a low cost structure, but a lead time that was above the industry average. Two of Dutta’s key team members identified a set of alternatives for Xtra Power but vociferously pitched for replacing Cretto with Dolphin Logistics Service Provider (DLSP). DLSP, however, insisted that in addition to the logistics services, Xtra Power select its subsidiary Dolphin Power as a supplier for a core component required in assembling a lead battery. This effectively meant that Xtra Power would have to scrap its longstanding supplier relationship with Avani International as well, and almost reconfigure the entire supply chain. It was time to take a final call on the propositions of DSLP, but Dutta was not feeling easy in the mind, in part because reconfiguring the entire supply chain would mean losing the relationship and trust of the existing suppliers in addition to increasing costs.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The sources of strategic capabilities and how the value chain and the value network concepts can be helpful in understanding how value is created and lost in terms of activities undertaken by a firm.
• Issues and concepts in supply chain management (Lead Times, Demand and Supply Management, etc.)
• Issues and challenges in supply chain configuration, (and the factors affecting supplier selection etc.)
• Issues and challenges in sales and operation planning
• Issues and challenges in managing a reverse supply chain

Keywords

Supply chain, Supply chain configuration, Reconfiguring supply chain, Closed loop supply chain, Reverse supply chain, Value chain, Value Network, Strategic capabilities, Competitive advantage, Logistics, Lead times, Demand and Supply Management, Vendor selection