Evolution of the Xbox Supply Chain Case Solution

1. Discuss the supply chain changes Microsoft made between the Xbox and the Xbox 360? How were these changes designed to improve results? Do you agree with their shift in supply chain strategy?  Why or why not?

In the year 2001, Microsoft came up with the biggest discovery of its time, which was the launch of the X-box, which bought great enthusiasm and change in the world of games and technology. This was the first ever entry of Microsoft into the console market of video games. X- Box was one of the most unique and complex discoveries of its time and in the history of Microsoft, which needed a lot of complicated and sensitive parts which were installed by different companies, which came up with the compulsion of the supply chain management. Microsoft had been a bit late in introducing its product to the market of video games; hence now they are speeding up their supply chain process to achieve the desired target. 

Microsoft was also well aware of the technology changes and took immediate steps to update their product according to the demands and requirements of the gamers and their clients. Hence in the year 2005, right after 4 years of the first generation of the X-box, Microsoft introduced the second generation termed X-box 360. The supply chain of Xbox 360 was much more advanced and had better options than the supply chain of Xbox. Microsoft’s second-generation came up to be very beneficial for the company. The supply chain does not only includes the collection of the parts, but also it deals with the assembly of these parts and also the testing of the product. All these steps should work for hand in hand; otherwise, the entire cycle would be disrupted. The production was now moved to China. It now became a global strategy, but this supply chain strategy was very risky. However, Microsoft took a smart move over it and came up with lower product costs. This minimized the chances of risk of their new launch, and side by side, their supply chain earned global grounds. 

For Xbox, there were two suppliers, Flextronics and Wistron, and for Xbox 360, there were three suppliers Flextronics, and Wistron, with the addition of Celestica. 

The third massive change was in the contract of microprocessors and graphic chips. For Xbox, Microsoft made an agreement with Intel and Nvidia, whereas for Xbox 360, they have contracted IBM and ATI. 

Microsoft did all these changes in the supply chain to control its products cost because, in Mexico, it was very expensive as compared to China, as labor is cheaper; hence this was the pre-eminent step taken by Microsoft for their product because it bought great changes and betterment in the sales of the company and also it was proved to be very beneficial for the company’s growth.

2. Discuss in detail the advantages and disadvantages of using multiple suppliers. How should Microsoft best coordinate amongst their suppliers?

The usage of multiple suppliers is in a way better and more challenging for the company at the same time. However, it depends on the strategies set up by the company, or the planning that is around that should ensure that the supply chain is reliable and strong enough to fight back with any ups and downs of the supply chain.