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Supply Chain Management

Lecture 15

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Outline

Today

Simulation game results

Midterm review

Next week

Midterm Tuesday March 9

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The Teams

Place Team End moneyAdWiJuMa

Brittany

Brown Squad

CobrasCOSTA

Do Nothing

Jafar's Crew

No use for a name

Pangeans for Outsourcing

Pole Position

Robert and Alex

Team Bison

Team Predator

Team Shinnannigans

We Want Dutch Wafers

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The Scores

Place Team End money1 43,114,415.24

2 42,636,799.36

3 42,529,886.20

4 42,401,421.855 41,623,140.34

6 41,461,152.91

7 41,011,414.46

8 40,621,780.33

9 40,150,372.51

10 40,149,781.61

11 39,836,011.64

12 39,581,049.55

13 37,850,401.65

14 37,305,034.75

15 36,659,589.5316 35,394,768.57

Place Team End money1 43,114,415.24

2 42,636,799.36

3 42,529,886.20

4 42,401,421.855 41,623,140.34

6 41,461,152.91

7 41,011,414.46

8 40,621,780.33

9 40,150,372.51

10 40,149,781.61

11 39,836,011.64

12 39,581,049.55

13 37,850,401.65

14 37,305,034.75

15 36,659,589.5316 Do Nothing 35,394,768.57

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COSTA

20

161616

$36,659,58915

Team Bison

40

40

$37,305,03414Jafars Crew

40 20

1016

$37,850,40113

Do Nothing

20

$35,394,76816

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118112

16

$39,836,01111

AdWiJuMa

40 60

1516

$40,150,3729 We Want Dutch Wafers

46 37

1816

$40,149,78110

3630

16

$39,581,04912 Brittany

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The Designs

Team Predator

4066

161616

$40,621,7808No use for a name

4650

161616

$41,011,4147

Robert and Alex

45 60

201610

$41,461,1526Team Shinnannigans

40 60

151516

$41,623,1405

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Brown Squad

56 53

$42,401,4214Pole Position

55 100

16

$42,636,7992

Cobras

7172

16

$43,114,4151 Pangeans for Outsourcing

6595

$42,529,8863

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The Results

Place Team End money1 Cobras 43,114,415.24

2 Pole Position 42,636,799.36

3 Pangeans for Outsourcing 42,529,886.20

4 Brown Squad 42,401,421.855 Team Shinnannigans 41,623,140.34

6 Robert and Alex 41,461,152.91

7 No use for a name 41,011,414.46

8 Team Predator 40,621,780.33

9 AdWiJuMa 40,150,372.51

10 We Want Dutch Wafers 40,149,781.61

11 39,836,011.64

12 Brittany 39,581,049.55

13 Jafar's Crew 37,850,401.65

14 Team Bison 37,305,034.75

15 COSTA 36,659,589.5316 Do Nothing 35,394,768.57

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Midterm

Questions? Stop by

Friday March 5

Monday March 8

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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

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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

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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)

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What is Competitive Strategy?

Competitive strategy

Defines, relative to competitors, a companys 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 Mountainspring water

Dell

Custom-made computer systems at a reasonable cost

How do you execute your competitive strategy?

Q2

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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, andOverall trade-off

Skipping

Sections 3 though 9: Information-related metrics

Important concepts

6 drivers of supply chain performance

Facilities

Inventory

Transportation

Information

Sourcing

Pricing

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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

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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)

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Transportation Cost and Number of

Facilities

Number of

Facilities

Transportation

Costs

Q4

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Design Options For a Distribution

Network

Retailer

Manufacturers

Consumers

RetailerMergers

Consumers

Manufacturers

Distributor

Warehouse

Manufacturers

Consumers

Distributor

Warehouse

Distributor

Warehouse

Manufacturers

Consumers

Distributor

Warehouse

Distributor

Warehouse

Manufacturers

Consumers

Distributor

Warehouse

Retailer

Consumers

RetailerRetailer

Distributor

Warehouse

Manufacturers

Distributor

Warehouse

Q5

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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

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Factors Influencing Network Design

Decisions

Strategic factors

Global

Customers

Offshore

Many Asian plants

Source

Nike plants in Korea

Regional

Customers

Server

Suzikis Indian venture

Maruti

Contributor

Maruti

LeadLockheed Martins JSF in Dallas

OutpostDell in Ireland

Strategic role

Q6

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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 numberof facilities in a supply chain?

Q7

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Factors Influencing Network Design

Decisions

Political factors

Political stability

Infrastructure factors

Availability of transportation terminals, labor Most of Amazons 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 thecustomers need)

Q7

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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

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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'smethod

Calculating forecasts

Forecast errors

Calculating forecast errors

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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

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Midterm

Chapter 8

Sections 1, 2, 3

Important concepts

Aggregate planning Operational parameters

Aggregate planning strategies

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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

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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

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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 consideringlower-end models

Stealing share (increased sales, same market size)

Product substitution (overall demand stays the same)

Example: Toyota Camry attracting buyers who were consideringHonda Accord

Forward buying (same sales, same market size)

Customers move up purchases (does not increase sales)

Q10

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Midterm Formula Sheet