Abstract

The key objective of this case is to review an innovative product’s supply chain, so as to identify its supply risks and to improve its supply chain resilience. When COVID-19 caught the world off guard in early 2020, Germagic Biochemical Technology (HK) Ltd. (GBT) was ready to introduce its disinfectant products that demonstrated long-lasting properties to eliminate more than 99% of infectious viruses and bacteria. Through testing and certification from different government authorities and health bureaus, the protagonist of this case, Hamilton Hung, co-founder of GBT has been working with partnering firms to build international recognition while exploring the export market.

As a family run industrial business, Chiaphua Industries Ltd. faces many challenges in promoting Germagic products. Without global uniform standards and protocols in long-lasting disinfectant products, some customers are skeptical about their effectiveness. Exploiting the market need, different suppliers have flooded the market with certain products that are less effective than what they claim, while COVID-19 continues its devastation for the foreseeable future. On the flip side, it is also possible that COVID-19 may just disappear like many previous pandemics in human history, and that will cause a big drop in demand of such products. Facing all these challenges and market uncertainties, how could GBT expand into the local and regional markets by creating a more forward-looking, resilient supply chain that allows the company to stay ahead of its competitors? And how can it improve the distribution channels to promote customer products?

Learning Objectives

1.       Identify drivers in business risks and vulnerability in the supply chain process.

2.       Distinguish the strategies and solutions to improve supply chain resilience of Germagic’s products.

3.       Calculate safety stock and days of safety stock inventory based on different confidence levels.

4.       Calculate VaR to identify the potential loss faced by the company in case of disruption from purchasing raw materials and packaging materials.

5.       Identify challenges faced by GBT in terms of promoting its products, for example from lack of uniform accreditation in different countries and regions.

6.       Explore how to increase the market share and demand of Germagic in local and overseas market.