Supply Chain Management Lecture 15. Outline Today –Simulation game results –Midterm review Next...
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Transcript of Supply Chain Management Lecture 15. Outline Today –Simulation game results –Midterm review Next...
Supply Chain Management
Lecture 15
Outline
• Today– Simulation game results– Midterm review
• Next week– Midterm Tuesday March 9
The Teams
Place Team End moneyAdWiJuMaBrittanyBrown SquadCobrasCOSTADo NothingJafar's CrewNo use for a namePangeans for OutsourcingPole PositionRobert and AlexTeam BisonTeam PredatorTeam ShinnannigansWe Want Dutch Wafers
The Scores
Place Team End money1 43,114,415.242 42,636,799.363 42,529,886.204 42,401,421.855 41,623,140.346 41,461,152.917 41,011,414.468 40,621,780.339 40,150,372.51
10 40,149,781.6111 39,836,011.6412 39,581,049.5513 37,850,401.6514 37,305,034.7515 36,659,589.5316 35,394,768.57
Place Team End money1 43,114,415.242 42,636,799.363 42,529,886.204 42,401,421.855 41,623,140.346 41,461,152.917 41,011,414.468 40,621,780.339 40,150,372.51
10 40,149,781.6111 39,836,011.6412 39,581,049.5513 37,850,401.6514 37,305,034.7515 36,659,589.5316 Do Nothing 35,394,768.57
COSTA
20
161616
$36,659,58915
Team Bison
40
40
$37,305,03414Jafar’s Crew
4020
1016
$37,850,40113
Do Nothing
20
$35,394,76816
118112
16
$39,836,01111
AdWiJuMa
4060
1516
$40,150,3729 We Want Dutch Wafers
4637
1816
$40,149,78110
3630
16
$39,581,04912 Brittany
The Designs
Team Predator
4066
161616
$40,621,7808No use for a name
4650
161616
$41,011,4147
Robert and Alex
4560
201610
$41,461,1526Team Shinnannigans
4060
151516
$41,623,1405
Brown Squad
5653
$42,401,4214Pole Position
55100
16
$42,636,7992
Cobras
7172
16
$43,114,4151 Pangeans for Outsourcing
6595
$42,529,8863
The Results
Place Team End money1 Cobras 43,114,415.242 Pole Position 42,636,799.363 Pangeans for Outsourcing 42,529,886.204 Brown Squad 42,401,421.855 Team Shinnannigans 41,623,140.346 Robert and Alex 41,461,152.917 No use for a name 41,011,414.468 Team Predator 40,621,780.339 AdWiJuMa 40,150,372.51
10 We Want Dutch Wafers 40,149,781.6111 39,836,011.6412 Brittany 39,581,049.5513 Jafar's Crew 37,850,401.6514 Team Bison 37,305,034.7515 COSTA 36,659,589.5316 Do Nothing 35,394,768.57
Midterm
• Questions? Stop by…– Friday March 5– Monday March 8
Midterm
• Chapter 1 – Sections 1, 2, 3, 4, 5
• Skipping – Section 1.5: Supply chain macro processes in a firm
– Important concepts• Supply chain• Supply chain surplus• 3 decision phases in a supply chain• Cycle view• 4 process cycles• Push/pull view
Supply Chain Stages
• A typical supply chain may involve a variety of stages
Manufacturer Distributor Retailer CustomerSupplier
Most supply chains are actually supply networks
Q1
Midterm
• Chapter 2 – Sections 1, 2, 3, (4e: also 4)– Important concepts
• Competitive strategy• Supply chain strategy• Strategic fit• How is strategic fit achieved • Implied demand uncertainty• Responsiveness/efficiency• Issues affecting strategic fit• Scopes of strategic fit• Obstacles to achieving strategic fit (3e: Chapter 3
section 9)
What is Competitive Strategy?
• Competitive strategy– Defines, relative to competitors, a company’s set of
customer needs that it seeks to satisfy through its products and services
• Wal-Mart– Everyday low prices (low cost retailer for a wide variety of products)
• Coors– The coldest tasting beer in the world, brewed with Rocky Mountain
spring water
• Dell– Custom-made computer systems at a reasonable cost
How do you execute your competitive strategy?
Q2
Midterm
• Chapter 3 – Sections 1, 3, 4, 5, 6, 7, 8, (3e: also 9)
• Hint– Sections 3 through 9 focus at:: Role in the competitive strategy, and
Overall trade-off
• Skipping– Sections 3 though 9: Information-related metrics
– Important concepts• 6 drivers of supply chain performance
– Facilities– Inventory– Transportation– Information– Sourcing– Pricing
From Strategy to Decisions
Corporate Strategy
Competitive Strategy
Supply Chain Strategy
Responsiveness Efficiency
Facilities Inventory Transportation Information Sourcing Pricing
Logistical drivers Cross functional drivers
Q3
Midterm
• Chapter 4– Sections 1, 2, 3– Important concepts
• Distribution• Factors influencing network design• Customer service components• Relationship between number of facilities and
response time• Relationship between number of facilities and cost• 6 distribution network design options
– Relative performance (advantages/disadvantages)
Transportation Cost and Number of Facilities
Number of Facilities
TransportationCosts
Q4
Design Options For a Distribution Network
Retailer
Manufacturers
Consumers
RetailerMergers
Consumers
Manufacturers
DistributorWarehouse
Manufacturers
Consumers
DistributorWarehouse
DistributorWarehouse
Manufacturers
Consumers
DistributorWarehouse
DistributorWarehouse
Manufacturers
Consumers
DistributorWarehouse
Retailer
Consumers
RetailerRetailer
DistributorWarehouse
Manufacturers
DistributorWarehouse
Q5
Midterm
• Chapter 5– Sections 1, 2
• Skipping– Section 5.2: Locating to split the market
– Important concepts• 4 classifications of network design decisions• 8 factors influencing network design decisions• 6 facility strategic roles• Positive externalities
Factors Influencing Network Design Decisions
• Strategic factors
GlobalCustomers
Offshore<low-cost>
<exports only>Many Asian plants
Source<low-cost>
<global market>Nike plants in Korea
Regional Customers
Server<local market><avoid tariffs>
Suziki’s Indian ventureMaruti
Contributor<customization>
<development skills>Maruti
Lead<advanced technology>
Lockheed Martin’s JSF in Dallas
Outpost<access to
knowledge>Dell in Ireland
Strategic role
Q6
Factors Influencing Network Design Decisions
• Macroeconomic factors– Quotas, tariffs, and tax incentives
• Economic trade agreements: Nafta, EU, APTA, AFTZ
– Exchange rate and demand risk– Different states or countries often offer economic incentives to
companies that decide to set up shop there, including tax incentives and low-interest economic development loans
How can trade agreements influence the number of facilities in a supply chain?
Q7
Factors Influencing Network Design Decisions
• Political factors– Political stability
• Infrastructure factors– Availability of transportation terminals, labor
• Most of Amazon’s distribution centers are located near airports
• Competitive factors– Positive externalities (many stores in a mall makes it more
convenient for customers – one location for everything the customers need)
Q7
Midterm
• Chapter 6– Sections 1, (3e: 2), 3, 4, (4e: 5), (3e: 6)
• Important concepts– Discounted cash flow– Net present value– Decision tree– Calculating NPV– Calculating NPV using decision trees– Risk management and network design
Midterm
• Chapter 7– Sections 1, 2, 3, 4, 5, 6– Important concepts
• Factors influencing demand forecast• 4 characteristics of forecasts• 4 forecast types• Static and adaptive
– Static method, moving average, exponential smoothing, Holt's method
• Calculating forecasts• Forecast errors• Calculating forecast errors
Types of Forecasts
• Qualitative– Primarily subjective, rely on judgment and opinion
• Time series– Use historical demand only
• Causal– Use the relationship between demand and some
other factor to develop forecast
• Simulation– Imitate consumer choices that give rise to demand
Q8
Midterm
• Chapter 8– Sections 1, 2, 3– Important concepts
• Aggregate planning• Operational parameters• Aggregate planning strategies
Aggregate Planning Strategies
• Basic strategies– Level strategy (using inventory as lever)
• Synchronize production rate with long term average demand• Swim wear
– Chase (the demand) strategy (using capacity as lever)• Synchronize production rate with demand• Fast food restaurants
– Time flexibility strategy (using utilization as lever)• High levels excess (machine and/or workforce) capacity• Machine shops, army
– Tailored strategy• Combination of the chase, level, and time flexibility
strategies
Q9
Midterm
• Chapter 9– Sections 1, 2, 3
• Hint– Section 3 focus at Impact of promotion on demand (market growth,
stealing share, and forward buying), and impact on promotion timing
• Important concepts– Responding to predictable variability– Managing supply– Managing demand– 3 reasons for increase in demand due to promotion– Impact on promotion timing
Managing Demand
• Pricing and other forms of promotion– Timing of promotion is important
• Demand increases from promotion can result from a combination of three factors:– Market growth (increased sales, increased market size)
• Increase in consumption from both new and existing customers• Example: Toyota Camry attracting buyers who were
considering lower-end models
– Stealing share (increased sales, same market size)• Product substitution (overall demand stays the same)• Example: Toyota Camry attracting buyers who were
considering Honda Accord
– Forward buying (same sales, same market size)• Customers move up purchases (does not increase sales)
Q10
Midterm Formula Sheet