LGMT 683: 4.2 Discussion Questions19 19 unread replies. 19 19 replies. Post your answer to one of the questions below. Begin your post with the question you are answering and then make your response.As noted in the text, supply chain network design decisions are not easy to change in the short term. Why? Give at least one example to illustrate your point.Briefly describe the implications of poor forecasting on a supply chain. In other words, what are some of the bad things that can happen as a result of inaccurate demand forecasts?Respond to at least two of your classmates, at least one response to a different topic than your original primary post.CLASSMATES POSTS: 1) JACOBAs noted in the text, supply chain network design decisions are not easy to change in the short term. Why? Give at least one example to illustrate your point.Supply chain network design decisions, tend to be strategic, long-term orientated, and have a significant impact on determining a company’s long-term sustainability and success. More often than not, these types of decisions are capital intensive, requiring a large investment and resource commitment. Supply chain decisions, typically begin “with procuring the materials or services needed to create the end product and continues until the finished goods are in the customer’s hands. This process typically involves a range of decisions and transactions between several distinct entities” (Po, 2012, para. 1). To generalize the aforementioned statement, major supply chain decisions, can be bucketed into three major categories, procurement, manufacturing and finished goods. Procurement decisions, revolve around solidifying supplier relationships, determining where they are located and finalizing what materials a company needs. Additional examples of long-term decision points companies must consider in this area, include whether to vertically integrate their supply-chain, the type of contract they will sign with suppliers (long-term versus short, fixed versus flexible ) and the specific components that will make-up their products. Manufacturing, revolves around where a company will manufacturer / assembly their products and the methodology behind how they will manufacture their goods (i.e. push versus pull system, lean manufacturing, just-in-time manufacturing, flexible manufacturing, etc.). Within this area, companies face strategic long-term decisions, like the impact of if moving production overseas, is more cost-effective than producing goods domestically. A specific example of this, is when a U.S. company for example, decides to cut production costs by opening up a facility in China, as China’s labor, operating, and facility costs, are much lower than the U.S.’s. This type of decision requires significant investment and should be taken with a long-term strategy in mind and companies must consider all known and unknown risk factors. Finished goods, revolves around determining the number of holding facilities and their location and capacity, as well as how the company will set up their logistical distribution network. In this area, companies again face similar investment decisions, as they must determine whether to outsource their distribution operations to a third-party logistical company or to do it themselves, how they will transport their goods, and even the make-up and physical infrastructure of their facilities.Each of the scenarios and examples described above, emphasize how impactful supply chain network decisions can be for a company. It is because of this, that companies must take a strategic approach to these decisions and recognize the importance of identifying both short and long-term risks, issues and opportunities associated to their decisions. A company must account for demand fluctuations, slow-downs, and potential operational barriers (political, legal, tariffs, societal, etc.). Chopra and Meindl (2013) suggest that when making supply chain network decisions under uncertainty, managers should combine strategic planning and financial planning during network design, use multiple metrics to evaluate supply chain networks, use financial analysis as an input to decision making (not as a solution), and to use estimates along with sensitivity analysis (pg. 178).Reference: Chopra, S., & Meindl, P. (2013). Supply chain management: Strategy, planning, and operation (5th ed.). Boston: Pearson.Po, V. (2012, December 11). Understanding the 3 Levels of Supply Chain Management. Retrieved November 9, 2015, from .procurementbulletin.com/understanding-the-3-levels-of-supply-chain-management/”>http: //www.procurementbulletin.com/understanding-the-3-levels-of-supply-chain-management/2) BRANDONBriefly describe the implications of poor forecasting on a supply chain. In other words, what are some of the bad things that can happen as a result of inaccurate demand forecasts?The importance of forecasting is to ensure your production will meet the demand for your product. If the firm’s forecast falls short of the product demand, they will create dissatisfaction for their customers because the company was unable to fulfill the order (Murray, n.d.). This could negatively impact sales of the product, as customers may find the need to seek out competitors to satisfy the purchase of a similar competing product. The worse impact this could have on a firm is future credibility and impact on future sales, as they fell short on the initial forecast, the firm may increase their forecast, but due to the damage done of not having product to fulfill the order, customers may choose to forgo the purchase, causing a swing back to the opposite end of the spectrum, over-forecasting.In the opposite side of the spectrum, a firm that over-forecasts for a product, will find they produce too much product, which will lead to over-capacity of product, leading to more product stuck on the shelf and will lead to decreased profits due to lack of sales or bargain bin pricing to move the stagnant product (Murray, n.d.).In either case, the implications of a missed forecast will lead to financial losses, either through missed sales or too much money tied up in production that is not recovered through revenues (Murray, n.d.),Companies must continually be re-evaluating and reassessing their forecasts, to ensure they can respond to any market fluctuations and account for errors in the forecasting (Murray, n.d.). Errors must be planned and accounted for based on the depth of the supply chain, meaning the longer that chain is and the more sub-suppliers that exist, the more misinformation and information delay that can be encountered and negatively impact the match of production to demand (Chopra & Meindl, 2013).One example of a strategic supply chain failure was of UPS during the 2013 holiday season. Prior to the season, UPS had expected a 8% increase in package volume (SCDigest Editorial Staff, 2014) and had planned for this surge by leasing 23 additional aircraft, hiring 55,000 additional seasonal workers, and short-term leasing an additional fleet of trucks (Banker, 2013). The demand was nearly 36% greater than the previous year and the company ended up failing to meet the promise to delivery of many packages before Christmas. Part of the failure was not only poor forecasting and an unexpected surge in package volume, but the long term capacity planning of its highly tuned automated sorting systems had no back-up plans when the system reached capacity and UP and the inability to react the forecast error with enough time to change its planning (SCDigest Editorial Staff, 2014). This tarnished the reputation of UPS for planning to meet demand, and could have caused customers to re-think the option to use of UPS when it came to high volume demand, such as the following Christmas, potentially reducing future revenues and costing money to re-build its reputation, which can arguably be be a contribution to the drop in net income between 2013 and 2014 (Yahoo Finance).References: Banker, S. (2013, December 30). UPS Holiday Season Fiasco: A Failure of Strategic Planning. Retrieved November 9, 2015, from Forbes: http: //www.forbes.com/sites/stevebanker/2013/12/30/ups-holiday-season-fiasco-a-failure-of-strategic-planning/Chopra, S., & Meindl, P. (2013). Supply Chain Management (5th ed.). Boston: Pearson.Murray, M. (n.d.). Forecasting In The Supply Chain. Retrieved November 9, 2015, from About Money: http: //logistics.about.com/od/strategicsupplychain/a/Forecasting.htmSCDigest Editorial Staff. (2014, January 6). Supply Chain News: The Factors Behind the UPS Failure to Deliver Christmas Goods. Retrieved November 9, 2015, from Supply Chain Digest: .scdigest.com/ONTARGET/14-01-06-2.PHP?cid=7717&ctype=content”>http: //www.scdigest.com/ONTARGET/14-01-06-2.PHP?cid=7717&ctype=content (Links to an external site.)United Parcel Service (UPS) (2014). Income Statement.Yahoo!Finance. Retrievedfrom .yahoo.com/q/is?s=UPS+Income+Statement&annual (Links to an external site.)”>https: //finance.yahoo.com/q/is?s=UPS+Income+Statement&annual (Links to an external site.)PLEASE RESPOND TO BOTH OF MY CLASSMATES POSTS AS YOU SPEAKING TO THEM DIRECTLY. THE RESPONSE CAN BE POSITIVE OR NEGATIVE.4.3? QUESTIONS AND ANSWERSCHAPTER 61) WHY IS IT IMPORTANT TO CONSIDER UNCERTAINTY WHEN EVALUATING SUPPLY CHAIN DESIGN DECISIONS?CHAPTER 7: 2) HOW COULD DELL USE COLLABORATIVE FORECASTING WITH ITS SUPPLIERS TO IMPROVE ITS SUPPLY CHAIN?4.4 ADDTIONAL EXERCISECHAPTER 72) WEEKLY DEMAND AT HOT PIZZA ARE AS FOLLOWS: WEEK ? DEMAND ($)1 ? 1082 ? 1163 ? 1184 ? 1245 ? 966 1197 968 102 ? 9 ? 11210 ? 10211 ? 9212 ? 91ESTIMATE DEMAND FOR THE NEXT FOUR WEEKS USING A FOUR-WEEK MOVING AVERAGE AS WELL AS SIMPLE EXPONENTIAL SMOOTHING WITH a (incursive)= 0.1. EVALUATE THE MAD, MAPE, MSE, BIAS AND TS IN EACH CASE. WHICH OF THE TWO METHODS DO YOU PREFER? WHY?CHAPTER 62) Unipart, a manufacturer of auto parts, is considering two different B2B marketplaces to purchase its MRO supplies. Both marketplaces offer a full line of supplies at very similar prices for products and shipping. Both provide very similar service levels and lead times. However, their fee structures are quite different. The first marketplace, Parts4u.com, sells all of its products with a 5 percent commission tacked on top of the price of the product (not including shipping). AllMRO.com’s pricing is based on a subscription fee of $10 million that must be paid up front for a two-year period and a commission of 1 percent on each transaction’s product price. Unipart spends about $150 million on MRO supplies each year, although this varies with their utilization. Next year will likely be a strong year, in which high utilization will keep MRO spending at $150 million. However, there is a 25 percent chance that spending will drop by 10 percent. The second year, there is a 50 percent chance that the spending level will stay ~here it was in the first year and a 50 percent chance that it will drop by another 10 percent. Unipart uses a discount rate of 20 percent. Assume all costs are incurred at the beginning of each year (so Year 1’s costs are incurred now and Year 2 costs are incurred in a year). Which B2B marketplace should Unipart buy its parts from?
LGMT 683: 2.2 Discussion QuestionsPost your answer to only one of the topics below. Begin your post with the question you are answering and then make your response.What is the purpose of benchmarking and how can benchmarking be used to improve supply chain performance? Give at least one industry example to illustrate your point.The text states that the intercompany scope of strategic fit is essential today because the competitive playing field has shifted from company versus company to supply chain versus supply chain. Briefly describe at least one industry example to illustrate this important point.The text states that a company’s partners may determine the company’s success. Do you agree or disagree? Why?Reply to at least two of your classmates on different topics than your original post. CLASSMATE POSTS: 1) .instructure.com/courses/23387/users/66486″>Jacob JorgensenWhat is the purpose of benchmarking and how can benchmarking be used to improve supply chain performance? Give at least one industry example to illustrate your point.When assessing the health and efficiencies of one’s supply chain, many companies evaluate and monitor various aspects of their supply chain. Essentially, companies evaluate their “drivers of supply chain performance”, to help with identifying strengths, weaknesses, opportunities, and risks within their supply chain. Chopra and Meindl (2013), describe how that in-order for companies to understand their supply chain performance “in terms of responsiveness and efficiency, we must examine the logistical and cross-functional drivers of supply chain performance: facilities, inventory, transportation, information, sourcing, and pricing” (pg. 44). Each of these focus areas, has a large impact on determining the successes and failures of a company’s supply chain and are areas companies must continuously monitor and optimize.One tactic companies use to optimize these areas, is benchmarking. Benchmarking can be defined as “the process of studying industry or competitive practices, functions and products and finding ways to meet or improve upon them. Companies from all different industries use benchmarking to gauge their successes and pinpoint their shortcomings. The general process of benchmarking involves identifying problem areas, selecting top competitors who excel where a company falls short and making the necessary changes” (Suttle, n.d., para. 1). The process, tools and techniques, used by these “top companies” whom companies benchmark, have typically been adopted and created methods that are considered industry “best-practices”. These best-practices, over time become industry standards and are leading reasons many companies choose to model their business after them. Benefits of benchmarking, include: understanding your performance relative to your competitors, compare performance between product lines/business units in your own company, can help with holding people more responsible for their performance, enables the ability to drill down into performance gaps, can help with developing standard processes and metrics, enables a continuous improvement mindset, and can help companies better understand what makes a company successful (Roberts, 2014, para. 1). Manufacturing companies in particular, often benchmark industry leaders to help with streamlining their processes, decreasing their flow-time and to help with optimizing their overall supply-chain. Toyota, is an example of a company that is often benchmarked for their manufacturing practices. The company is considered an industry leader in the practice of Lean Manufacturing and has been a beacon that many companies have swarmed to over the decades.References: Chopra, S., & Meindl, P. (2013). Supply chain management: Strategy, planning, and operationRoberts, M. (2014, January 7). 7 Benefits of Benchmarking Your Manufacturing Performance [DATA]. Retrieved October 26, 2015, from http: //blog.lnsresearch.com/blog/bid/192183/7-Benefits-of-Benchmarking-Your-Manufacturing-Performance-DATASuttle, R. (n.d.). The Advantages of Benchmarking for an Organization. Retrieved October 26, 2015, from .chron.com/advantages-benchmarking-organization-30952.html”>http: //smallbusiness.chron.com/advantages-benchmarking-organization-30952.html 2) Steve LeeThe text states that a company’s partners may determine the company’s success. Do you agree or disagree? Why?I agree that a company’s partners may determine the company’s success because in a competitive environment, a company’s ability to harness and improve its relationship with other members of its supply chain will enable it to reduce cost, which leads to improved supply chain surplus. This is accomplished through the concept of intercompany scope which “two parties work together to reduce the amount of inventory required” (Chopra & Meindl, 2013) by communicating essential information from both parties which reduces the total cost. The reduced costs and increase in profits benefit all members of the supply chain since they are an interconnected network. Different companies in the supply chain have to realize that they do not need to compete with other companies on the supply chain but work together to make mutually beneficial decisions. Technology has allowed supply chains to become more fast-paced, resulting in companies of various sizes depending on just-in-time inventory to reduce their overhead costs by getting their product to the customer/market faster without excess inventories to maintain. On the opposite spectrum, if a company along the supply chain only acts in their own best interest, they hurt the supply chain surplus since costs will be higher for the final product and a decrease in competitive edge. The end result would be higher costs and risks which will affect the company’s success. ReferencesChopra, S., & Meindl, P. (2013). Supply chain management. Boston: Pearson. PS: PLEASE RESPOND TO MY CLASSMATES POSTS. YOUR RESPONSE CAN BE POSITIVE OR NEGATIVE, AND RESPOND AS YOU TALKING TO THEM DIRECTLY. 2.3) CHAP 2 // QUESTION 6: GIVE ARGUMENTS TO SUPPORT THE STATEMENT THAT WALMART HAS ACHIEVED GOOD STRATEGIC FIT BETWEEN ITS COOPERATIVE AND SUPPLY CHAIN STRTEGIES. WHAT CHALLENGES DOES IT FACE AS IT WORKS TO OPEN SMALLER FORMAT STORES IN URBAN ENVIRONMENTS?CHAP 3 // QUESTION 5: MOTOROLA HAS GONE FROM MANUFACTURING ALL ITS CELL PHONS IN-HOUSE TO ALMOST COMPLETELY OUTSOURCING THE MANUFACTURING. WHAT ARE THE PROS AND CONS OF THE TWO APPROACHES?CHAP 3 // QUESTION 7: WHAT ARE SOME INDUSTRIES IN WHICH PRODUCTS HAVE PROLIFERATED AND LIFE CYCLES HAVE SHORTENED? HOW HAVE THE SUPPLY CHAINS IN THESE INDUSTRIES ADAPTED?
LGMT 683: I) 1. 3 Discussion QuestionsPost your answer to only one of the topics below. Begin your post with the question you are answering and then make your response. Of the three macroprocesses in a firm, one process is the most important. Comment on the previous statement or comment if you think otherwise. Read the purpose of the Supply Chain Operations Reference (SCOR) Model and about its major processes. Read about the Council of Supply Chain Management Professional’s (CSCMP) Supply Chain Management Process Standards. Comment on the need of the above standards and present an example from industry which has benefitted from the standards and how. Reply to at least two of your classmates on different topics than your original post.
LGMT 683 8.2 Discussion Questions23 23 unread replies. 25 25 replies. Post your answer to only one of the questions below. Begin your post with the question you are answering and then make your response.Based on your own experience or research, briefly describe at least one example of a public or private enterprise that has outsourced the management of one or more of its supply chain related activities. Include in your answer the name of the firm, the name of the third party, and a brief statement regarding the benefits claimed. In your opinion, what are the downside risks?Based on your own experience or research, briefly describe at least one example of a public or private enterprise that has offshored the management of one or more of its supply chain related activities. Include in your answer the name of the firm, the name of the third party, and a brief statement regarding the benefits claimed. In your opinion, what are the downside risks?Supply chain-related electronic auctions have been increasing in sophistication and popularity over the years. Using the Internet, briefly describe at least one firm that offers electronic supply chain-related auctions and summarize the services they offer. Also, please share their Internet address with your classmates.Please describe at least one example of a firm that is using dynamic pricing to increase revenue. Be as specific as possible.Reply to at least two of your classmates on different topics than your original post.CLASSMATES POSTS: JACOB,Based on your own experience or research, briefly describe at least one example of a public or private enterprise that has outsourced the management of one or more of its supply chain related activities. Include in your answer the name of the firm, the name of the third party, and a brief statement regarding the benefits claimed. In your opinion, what are the downside risks?Over the last several decades, there has been an increasingly trend of companies outsourcing their products and services. There are many reasons contributing to this growing trend, which include how it increases a company’s flexibility, helps increase efficiency rates within companies, frees up internal resources, helps with risk management, can enable improved service levels, tax breaks, lower regulatory costs, allows companies to focus on their core competencies, and because often times, labor is much cheaper (“Top Ten Reasons to Outsource”, 2011, para. 1). An example of company who is outsourcing part of their business, is Apple. Apple outsources the majority of their production to Asian countries (Japan, China, Taiwan, etc.) for several reasons. Contrary to most beliefs, Apple does not outsource their production because of cheap labor, but because of countries like China and Taiwan, provide fast and efficient production methods (Kabin, 2013, para. 4). In outsourcing to companies like Taiwan Semiconductor, Apple is able to focus on the heart of their business, which includes their research and development, design, and marketing divisions. Additional benefits Apple experiences, is the cheap parts that are procured through their supplier, the tax breaks they receive, and the lower regulatory costs they experience. Although the company is experiencing an increase in their overall supply chain profitability, their image has been damaged over the last several years, as they are taking pressure from the American society to bring jobs back to the U.S. and how many believe they are engaged in unethical business practices overseas.References: Kabin, B. (2013, September 11). Apple’s iPhone: Designed in California But Manufactured Fast All Around the World (Infographic). Retrieved December 3, 2015, from .entrepreneur.com/article/228315″>http: //www.entrepreneur.com/article/228315 (Links to an external site.)Top 10 Reasons to Outsource. (2011, November 8). Retrieved December 3, 2015, from .supplychaindigital.com/supplychainmanagement/2329/Top-10-Reasons-to-Outsource”>http: //www.supplychaindigital.com/supplychainmanagement/2329/Top-10-Reasons-to-OutsourceBhushan, Please describe at least one example of a firm that is using dynamic pricing to increase revenue. Be as specific as possible.Dynamic pricing, which is also known as yield management or revenue management, is a set of pricing strategies aimed at increasing profits. The techniques are most useful when two product characteristics co-exist. First, the product expires at a point in time, like hotel rooms, airline flights, or time-dated (“sell before”) products. Second, capacity is fixed well in advance and can be augmented only at a relatively high marginal cost. These characteristics create the potential for very large swings in the opportunity cost of sale, because the opportunity cost of sale is a potential foregone subsequent sale.Airlines often use dynamic pricing to increase revenue. Almost every airline has its Revenue management department. Airline pricing in the United States is opaque. It is not uncommon for one-way fares to exceed round-trip prices. The difference in price between refundable and non-refundable tickets is often a factor of four or five. Prices change frequently, with low fares on a particular flight being available, then not, and then available again. Average prices for round-trips between Phoenix and Los Angeles differ depending on whether they originate in Los Angeles or in Phoenix. This is particularly mysterious in that the same airlines fly these round-trips with the same set of offerings.American Airlines was the first to introduce dynamic pricing. Different prices are charged for different customers for the same seat. Prices depend on customer’s maximum willingness to pay. Customers who book way early are very price sensitive and usually pay less whereas those who book just few days before departure pay more as they are insensitive to price. Higher price is charged for peak hour flying like Monday mornings and Friday evenings and lower prices for non-peak hours like Tuesday afternoons when demand is low.ReferencesChopra, S. & Meindl, P. (5th Edition). Supply Chain Management. Understanding the Supply Chain Preston McAfee & Vera Velde, Dynamic Pricing in the Airline IndustryRetrieved from: .mcafee.cc/PDF/DynamicPriceDiscrimination.pdf”>http: //vita.mcafee.cc/PDF/DynamicPriceDiscrimination.pdf (Links to an external site.)Lisa Magloff, Dynamic Pricing StrategiesRetrieved from: .chron.com/dynamic-pricing-strategy-5117.html (Links to an external site.)”>http: //smallbusiness.chron.com/dynamic-pricing-strategy-5117.html (Links to an external site.)ONCE YOU ANSWER THE QUESTION, PLEASE RESPOND TO MY CLASSMATES POSTS INDIVIDUALLY, WHICH CAN BE POSITIVE AND NEGATIVE.CHAPTER 155) For a manufacturer that sells to many retailers, why does a quantity flexibility contract result in less information distortion than a buyback contract?8) Why do you think assembly in the consumer electronics industry is performed by third parties, whereas assembly in the auto industry is almost never outsourced?CHAPTER !65) Explain the use of outlet stores by retailers such as Saks Fifth Avenue in the contest of revenue management. How does the presence of outlet stores help Saks, How does it help its more valuable customer, who is willing to pay full price?CHAPTER 172) What are some advantages of the software as a service (SaaS) model? Why has it been successful in the CRM space?4) Identify a few examples of when the availability of real-time information has been used to improve supply chain performance.8.4 AADITIONAL HOMEWORK EXERCISEChapter 15: Sourcing Decisions in a Supply Chain1. After reviewing the last three lines of Table 15-4 in your text, as the buy-back price for each disc increases from $0 to $6 while the wholesale price is held constant at $7, what happens to profits for the music store (the retailer) and the supplier (the manufacturer)? What about overall supply chain profitability? What is the lesson to be learned from this exercise?The information presented in Table 15-4 assumes that there are no costs associated with returning the “buy-back” products to the supplier. As the transportation costs to return the goods being bought back increases, what happens to the profitability of the supply chain?Chapter 16: Pricing and Revenue Management in a Supply Chain2. Right click and download the .xls” href=”https: //erau.instructure.com/courses/23387/files/3070800/download?wrap=1″>Pricing to Multiple Segments data.instructure.com/courses/23387/files/3070800/download?wrap=1″>.instructure.com/images/preview.png”>.instructure.com/courses/23387/files/3070800/download?wrap=1″>.instructure.com/images/popout.png”> to your hard drive. What happens to prices and profitability when the sensitivity for customers that are willing to wait (i.e., segment 2) increases from 40p1 to 80p1? What did you learn from this exercise?Note: Use the “Solver” capability under the ”Tools” menu (but you must set sensitivity in cell C6 to desired level before you run “Solver”).3. Right click and download the .xls” href=”https: //erau.instructure.com/courses/23387/files/3070802/download?wrap=1″>Dynamic Pricing Data.instructure.com/courses/23387/files/3070802/download?wrap=1″>.instructure.com/images/preview.png”>.instructure.com/courses/23387/files/3070802/download?wrap=1″>.instructure.com/images/popout.png”> to your hard drive. What happens to the quantity purchased and profitability if the price sensitivity increases to from 1.8p3 to 1.9p3 in the third period? What did you learn from this exercise?Note: Use the “Solver” capability under the ”Tools” menu (but you must set sensitivity in cell C8 to desired level before you run “Solver”).*Note on using the “Solver” Add-In: The Solver Add-in is an Excel add-in program that is available when you install Microsoft Office or Excel. To use it in Excel, however, you need to load it first. You should have completed doing so in Module 3.TABLE 15-4 AND BOTH DATAS ARE ALL ATTACHED..instructure.com/courses/23387/discussion_topics/194433/submit#”>.instructure.com/courses/23387/discussion_topics/194433/submit#”>
LGMT 6837. 2 Discussion Questions21 21 unread replies. 21 21 replies. Post your answer to only one of the following questions. Begin your post with the question you are answering and then make your response. Briefly describe at least one example of how a public or private enterprise can use the postponement of product differentiation to increase profits. Select a company or industry and describe what metrics you would use to evaluate the effectiveness and efficiency of your transportation strategy? Briefly explain your choice of metrics. Reply to at least two of your classmates on different topics than your original post. Their responses are below. CLASSMATES POSTS SARA, Briefly describe at least one example of how a public or private enterprise can use the postponement of product differentiation to increase profits. Postponement is the capability of a supply chain to delay its product customization until closer to when a product is sold and demand is known/more certain. There are certain products in which customers like customization, however it’s costly for a company to provide a line of highly customized products when it is unknown if each of those customized products will sell well or not. It’s more cost effective if a company can produce a base model with modular design/common interface components that can be customized as close as possible to the actual customer order so that the demand for each customization is more certain. Hewlett-Packard is one manufacturer that uses and profits from postponement of product differentiation. HP took a modular design in customizing its printers between the Asian and European markets. They manufactured base models and send those base models to local distribution centers where they could be customized according to each order. Each local distribution center could outfit the base printer with a country-specific external power supply/plugs. “The distribution center not only customizes the product but also purchases the materials that differentiate it (the power supplies, packaging, and manuals). As a result of this redesign, manufacturing costs are slightly higher than when the factories customized the printers, but the total manufacturing, shipping, and inventory costs dropped by 25%. ” In this case, 90% of an HP printer sold in Germany is the same as one sold in Japan. The components that are different, such as plugs, manuals, etc, are delayed in “customizing” the base product until the base printer arrives in its intended location of sale. Standardization is also a key design consideration with postponement, because if the base model components for printers marketed to two different regions are different they cannot be customized between regions or have delayed customization between regions. HP sells LaserJet printers in both Europe and North America. However, prior to implementing the postponed differentiation, each LaserJet printer was set to be fitted with either a dedicated power supply of 110 volts (used in America) or 220 volts (used in Europe). That would mean that the portion of the printers made with 110 volts could only be sold in America and the 220 volts could only be ever sold in Europe. If Europe had a sudden spike in printer demand, HP would not be able to back fill its European printer demand with printers configured with 110 volt power supply base model printers. With an improvement of design, a universal power supply is now built into their laserjet printers and HP can now ship printers between continents without the limitations of before. “As a result of standardizing the LaserJet, HP was able to reduce the total costs of manufacturing, stocking, and delivering the finished product to the customer by 5%per year. ”Sourcehttps://hbr. org/1997/01/mass-customization-at-hewlett-packard-the-power-of-postponementChopra, S. , & Meindl, P. (2013). Supply Chain Management: Strategy, Planning, and Operation (5th ed. ). Upper Saddle River, New Jersey: Pearson Prentice Hall. JACOB,Select a company or industry and describe what metrics you would use to evaluate the effectiveness and efficiency of your transportation strategy? Briefly explain your choice of metrics. More and more companies, believe that by using reports and metrics to consistently monitoring and evaluating various aspects of their supply chain, they are better ensuring their supply chain sustainability and profitability. Chopra and Meindl (2013), suggest that companies should use metrics, to evaluate their major logistical drivers, which include facilities, inventory, transportation, information, sourcing, and pricing (pg. 47). Within these categories, there are several industry defined standard metrics, which companies have at their disposal to help with evaluating the effectiveness and efficiency of their supply chain. One company that has done a great job with managing and optimizing their supply chain efficiencies is Amazon. Two areas the company has excelled at, include their optimization of both their facilities and inventory. For evaluating the effectiveness and efficiency of Amazon’s facilities, I would use metrics to measure their capacity and utilization rates, their flow-time efficiencies, their processing setup/idle time, and their production service levels. These measurements would better enable me to identify the strengths and weaknesses of the company’s internal operations and highlight potential bottlenecks and process gaps. For evaluating the company’s inventory, some of the metrics I would use to evaluate the company, include their fill rate, average inventory, inventory turns, and fraction of out of time stock. Part of Amazon’s success with both their inventory and facilities, has come from their implementation of fulfillment centers. Wulfraat (2014), describes these fulfillment centers as “massive distribution centers that are loaded up with a massive variety of products, high-speed conveyor systems, and hundreds of people focused on moving product out the door as fast as humanly possible” (para. 10). Reference:Chopra, S. , & Meindl, P. (2013). Supply chain management: Strategy, planning, and operation (5th ed. ). Boston: Pearson. Wulfraat, M. (2013, July 23). Amazon is Building a New Distribution Network – Quickly and Quietly! Retrieved November 23, 2015, from . scdigest. com/experts/Wulfraat_14-07-23. php?cid=8309 (Links to an external site. )”>http://www. scdigest. com/experts/Wulfraat_14-07-23. php?cid=8309 (Links to an external site. ) PLEASE RESPOND TO BOTH OF MY CLASSMATES POSTS: YOU RESPONSE CAN BE POSITIVE OR NEGATIVE. 7. 3 QUESTIONS CHAPTER 134) How can postponement of product differentiation be used to improve supply chain profitability? 7) When can tailored sourcing be used to improve supply chain profits? What are some challenges with implementing tailored souring? CHAPTER 14 3) Wal-Mart designs its networks so that DC supports several large retail stores. Explain how the company can use such a network to reduce transportation costs while replenishing inventories frequently. 4) Compare the transportation costs for an airline business such as Amazon and a retailer such as Home Depot when selling home-improvement materials. 7. 4 EXERCISE Chapter 13: Determining the Optimum Level of Product AvailabilityUsing the . xls” href=”https://erau. instructure. com/courses/23387/files/3070804/download?wrap=1″>Sportmart Demo. instructure. com/courses/23387/files/3070804/download?wrap=1″>. instructure. com/images/preview. png”>. instructure. com/courses/23387/files/3070804/download?wrap=1″>. instructure. com/images/popout. png”>, the manager decided to conduct market research and, based on the additional information she obtained from the research, she believes that the standard deviation of demand can be reduced to 50 instead of 100. What is the impact of profitability? What happens to profitability if the standard deviation of demand increases to 150? What did you learn from this exercise?Note: This is not a “Solver” problem. Just change the Standard Deviation directly in Excel from 100 to 50 and then 150 to see the impact on profitability. PS: SPORTMART DEMO ATTACHED. instructure. com/courses/23387/discussion_topics/194435/submit#”>
LGMT 683 ASSIGNMENTS:6. 4 Discussion Questions28 28 unread replies. 28 28 replies. Post your answer to only one of the following topics. Begin your post with the question you are answering and then make your response. Select and briefly describe one managerial lever (or strategy) for reducing lot size and cycle inventory in the supply chain, without increasing costs. Discuss bull whip effect and how a retailer can hurt supply chain profits by making lot-sizing decisions to minimize its own costs. Reply to at least two of your classmates on different topics than your original post. CLASSMATES POSTS:Ignatius,Discuss bull whip effect and how a retailer can hurt supply chain profits by making lot-sizing decisions to minimize its own costs. Lot size–based quantity discounts increase the lot size of orders placed within the supply chain because lower prices are offered for larger lots. When a firm places orders in lot sizes that are much larger than those in which demand arises, variability of orders is magnified up the supply chain. Firms may order in large lots because a significant fixed cost is associated with placing, receiving, or trans-porting an order (Chopra & Meindl, 2013). Large lots may also occur if the supplier offers quantity discounts based on lot size. The resulting large lots magnify the bullwhip effect within the supply chain. The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as move further up the supply chain. The bullwhip effect is commonly caused by overreaction to backlogs, neglecting to order in an attempt to reduce inventory, poor communication the supply chain, poor coordination, poor timeliness for information, forecast inaccuracies and poor return policies. The described effect can lead to either inefficient production or excessive inventory, as each producer needs to fulfill the demand of its customers in the supply chain. This also leads to a low utilization of the distribution channel. There is also the hazard of stock-outs which result in poor customer service and lost sales. Lot size discounts are based on the quantity purchased per lot, not the rate of purchase. Lot size-based discounts tend to raise cycle inventory in the supply chain by encouraging retailers to increase the size of each lot. Lot size-based discounts make sense only when the manufacturer incurs a very high fixed cost per order. For commodity products for which price is set by the market, manufacturers with large fixed costs per lot can use lot size-based quantity discounts to maximize total supply chain profits. (Chopra & Meindl, 2013)QuickMBA. com (2010) “The Bullwhip Effect” Retrieved 12 November, 2015 from: . quickmba. com/ops/bullwhip-effect/”>http://www. quickmba. com/ops/bullwhip-effect/Chopra, S. , & Meindl, P. (2013). Supply chain management: Strategy, planning, and operation (5th ed. ). Boston: Pearson. Kirkpatrick,2. Discuss bull whip effect and how a retailer can hurt supply chain profits by making lot-sizing decisions to minimize its own costs. The bull whip effect (BWE) results from a lack of supply chain coordination and prevents the supply chain from reach its full potential. The bullwhip effect distorts demand within a supply chain and the effects start relatively small and increase up the supply chain, much like a bullwhip. (Chopra & Meindl, 2010, p. 251) Despite advances in information technology, it has been stated that the bullwhip effect is experienced by two-thirds of firms and the BWE is one of the most widely studied issues facing supply chains. (Domingueza & Cannellaa, 2015, p. 3) The BWE increases cost in every area of the supply chain because it introduces inefficiencies that require the supply chain managers to off-set. (Chopra & Meindl, 2010, p. 252) Inventory cost, for example, are increased because the BWE unnecessarily increases variability, in response safety stock is increased to prevent stock out. Most BWE factors are enabled because each entity struggles to interpret data that it receives because there is a lack of communication. Volatile demand markets, such as impulse end customer products, are especially effected by the BWE. In volatile demand markets the number of entities (retailers, suppliers, manufactures) involved increasingly affects the degree to which demand is distorted. (Domingueza & Cannellaa, 2015, p. 13) In these markets it is beneficial for a supply chain to reduce complexity. When ordering decisions are made to satisfy the goals of one stage or entity the BWE is increased. (Chopra & Meindl, 2010, p. 255) For example, the BWE is increased when a retail manager decides to order lot-size quantity in order to reduce cost. This data can be misinterpreted to suggest that actually end customer demand has risen. The reality is that the retailer has many periods worth of product and will not reorder product for some time. To avoid this situation decisions should always be made in the interest of supply chain profitability rather than local profitability, also end customer demand should be used by the entire supply chain in forecasting when possible as this data is the most complete data available. ReferencesChopra, S. , & Meindl, P. (2010). Supply Chain Management. Upper Saddle River, New Jersey: Pearson. Domingueza, R. , & Cannellaa, S. (2015). The impact of the supply chain structure on bullwhip effect. Applied Mathematical Modeling. PS: PLEASE RESPOND TO MY CLASSMATES AS YOU SPEAKING TO THEM DIRECTLY. THE RESPONSE CAN BE NEGATIVE OR POSITIVE. 6. 5 TEXBOOK QUESTIONS Chapter 11 – WHAT IS THE DIFFERENCE BETWEEN LOT SIZE-BASED AND VOLUME BASED QUANTITY DISCOUNTS?Chapter 12- 1) WHAT IS THE ROLE OF SAFETY INVENTORY IN THE SUPPLY CHAIN?3) WHAT ARE THE PROS AND CONS OF THE VARIOUS MEASURES OF PRODUCT AVAILABILITY?5) WHAT IS THE IMPACT? OF SUPPLY UNCERTAINTY ON SAFETY INVENTORY? 6. 6 EXERCISES 1) Harley-Davidson has its engine assembly plant in Milwaukee and its motorcycle assembly plant in Pennsylvania. Engines are transported between the two plants using trucks, with each trip costing $1,000. The motorcycle plant assembles and sells 300 motorcycles each day. Each engine costs $500, and Harley incurs a holding cost of 20 percent per year. a. How many engines should Harley load onto each truck?b. What is the cycle inventory of engines at Harley? 2) As part of its initiative to implement just-in-time (JIT) manufacturing at the motorcycle assembly plant Exercise 1. Harley has reduced the number of engines loaded on each truck to 100. If each truck trip still cost $1,000, how does the decision impact annual inventory costs at Harley? What should the cost of each truck be if a load of 100 engines is to be optimal for Harley? 6. 7 EXERCISESChapter 12: Managing Uncertainty in a Supply Chain: Safety Inventory1. Using the . xls” href=”https://erau. instructure. com/courses/23387/files/3070806/download?wrap=1″>Wal-Mart Demo for Example 4. instructure. com/courses/23387/files/3070806/download?wrap=1″>. instructure. com/images/preview. png”>. instructure. com/courses/23387/files/3070806/download?wrap=1″>. instructure. com/images/popout. png”>, what happens to the Required Safety Stock inventory when the Desired Customer Service level is increased to 95%? What happens to the Required Safety Stock inventory when the Desired Customer Service level is decreased to 80%? What about 70%? What did you learn from this exercise?Note: This is not a “Solver” problem. Just change the service level directly in Excel from . 90 to . 80 and . 70 to see the impact on safety inventory. 2. Using the . xls” href=”https://erau. instructure. com/courses/23387/files/3070808/download?wrap=1″>Wal-Mart Demo. instructure. com/courses/23387/files/3070808/download?wrap=1″>. instructure. com/images/preview. png”>. instructure. com/courses/23387/files/3070808/download?wrap=1″>. instructure. com/images/popout. png”>, what happens to the Required Safety Stock inventory when the periodic review interval is changed to quarterly, i. e. , 12 weeks versus 4 weeks? What happens when it is changed to weekly, i. e. , 1 week versus 4 weeks? What did you learn from this exercise?Note: This is not a “Solver” problem. Just change the Review Interval directly in Excel from 4 weeks to 12 weeks to 1 week, respectively. 6. 2 OPTIONALI have a midterm as well this week. Please advise if you’re interested in taking it.
I) 1.3 Discussion Questions
Post your answer to only one of the topics below. Begin your post with the question you are answering and then make your response.
Of the three macroprocesses in a firm, one process is the most important. Comment on the previous statement or comment if you think otherwise.
Read the purpose of the Supply Chain Operations Reference (SCOR) Model and about its major processes. Read about the Council of Supply Chain Management Professional’s (CSCMP) Supply Chain Management Process Standards. Comment on the need of the above standards and present an example from industry which has benefitted from the standards and how.
Reply to at least two of your classmates on different topics than your original post.