...ALIGNING INCENTIVES IN SUPPLY CHAINS AGENDA OVERVIEW OF ARTICLE MODEL OF ANALASYS (CLASS DISCUSSION) CONCLUSION QUESTION / ANSWER PERIOD CISCO (Mad Monday April 16, 2001) The world’s largest network equipment maker shocked investors when it warned them they would soon be scrapping $2.5 billion of raw surplus (almost 50% of quarterly sales) - which is one of the largest inventory write-offs in US history. How could Cisco misread demand by $2.5 billion, almost half as much as its sales in the quarter? Many experts believed it was due to forecasting errors, or forecasting software problems, or even mismanagement from top executives But were they right in their assumptions? CISCO (What really happened) The truth is Cisco ended up with much more inventory (subassembly boards and semiconductors) then demand required due to supply chain partner’s behaviour in the 18 months leading up to Mad Monday Cisco did not have a manufacturing plant and subcontracted out to multiple third parties who mass produced the components because demand for Cisco products usually exceeded supply Cisco compounded the problem by offering incentives to suppliers who delivered quickly, which gave the suppliers incentives to build buffer stocks. The suppliers also boosted profits by buying in bulk from component suppliers. This turned out to be a win/win situation for the subcontractors and the component suppliers alike. Demand began to...
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...Q1. How has Solectron’s value to its customers evolved over time? Over the years, Solectron’s value to its customers has evolved drastically from a player in the Electronics Manufacturing Service industry to a Supply Chain integrator for major firms like IBM, HP, Sony, Ericsson, Cisco etc. Initially, Solectron manufactured a wide range of products for its customers in many business segments like Networking, Telecommunications, Computers, Computer peripherals, avionics, consumer electronics, GPS etc. As Solectron grew, it expanded its services so much so that by the end of 90s it had three strategic business units: * Technology Solutions, which provided technology building blocks which helped customers minimise time-to-market for new products * Global Manufacturing, which provided design, new product introduction, and manufacturing and distribution services * Global Services, which provided repair, upgrade, maintenance etc The company, with Mr. Chen concentrated on offering high quality, responsiveness, communication, service and technical support. The main objective was to achieve customer satisfaction by providing high quality. When Solectron offered contract manufacturing services to OEMs, its aim was to offer them services at reduced prices due to greater volume purchasing. Rather than outsourcing as a way to access relatively inexpensive skilled labour, it became a source of tactical advantage which they provided. Tactical turnkey assembly meant that OEMs...
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... Businesses are some of the biggest entities in the world. Some companies are even bigger than nations; 50 of the largest economies in the world are run by multinational companies; like General Electrics and British Petroleum which are bigger than UAE and Vietnam respectively[2]. The United States Government does provide 21 billion dollars in non-military aid to foreign countries, but this is nothing compared to the impact businesses can have. The textile industry in America alone generates 248 billion dollars in revenue and employs 75 million people globally. Businesses have the capability to empower workers and improve their mission while creating shared value[3]. What is shared value? CSV or Creating Shared Value is the process of aligning economic interests with societal interests to create value for stakeholders and shareholders. Corporations have taken on CSR or Corporate Social Responsibility, but this is a short term solution and is a response to external pressures, unlike CSV. Whereas CSV can improve a company’s profits and competitive position because it leverages its unique resources and expertise to create social and economic value[4]. Fair Wear, a clothing company (a project by the Fair Wear Foundation) created in response to the incident,...
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...Introduction Computer Sciences Corporation (CSC) is one of the leading information technology (IT) and professional services companies in the world. The company offers IT and business process outsourcing (BPO); and IT and professional services to clients in the commercial and government markets. It is one of the major federal government contractors serving various departments. CSC also licenses sophisticated software systems for the financial services and other industry-specific markets. The company's significant market position in the IT and professional services industry provides a base for its future growth, and also provides a competitive advantage. However, intense competition may lead to pricing pressures, thereby adversely affecting the operating margins and market share of the company. Best Practices for CSC for conducting market research The following are the five best practices in case of CSC in order to conduct market research- * Practice 1 CSC needs to conduct a primary research in order to understand the customer likings. The research process may be in the form of a questionnaire based survey which can be prepared by experts in the field and in consultation with the thought leaders in the event center industry. The main objectives of the primary research should be to know the demographics of its customer and their frequency in the availing the products/services. Moreover the company should also find out the ways (through this research) of attracting the...
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...agribusiness solutions for the farmers as well as customers by having fertilizer division. The analysis demonstrates the importance of trade-offs, innovation, product development, line of fit and Information Technology systems in the operations strategy, while showing decentralization structure and effect of it on global companies. Introduction Bunge limited is a successful example for transformation of companies to globalization as Bunge CEO Weisser goal to become the best company in the world in agribusiness and food. Performance objectives indicating market requirements from quality, speed, dependability, flexibility and cost for companies to position themselves in the market while decisions areas for operations strategy as capacity, supply network, process technology, and development and organization for companies to set their operation resources capabilities achieving the performance required in the market to reach and maintain the intended market position as a vital part of...
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...ASSESSING METHANOL PRODUCTION IN CHINA FOR METHANEX by Gabriel Wong Bachelor in Business Administration, Simon Fraser University, 2000 PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION In the Faculty of Business Administration © Gabriel Wong, 2010 SIMON FRASER UNIVERSITY Summer 2010 All rights reserved. This work may not be reproduced in whole or in part, by photocopy or other means, without permission of the author. APPROVAL Name: Gabriel Wong Degree: Master of Business Administration Title of Project: Assessing Methanol Production in China for Methanex Supervisory Committee: __________________________________________ Dr. Pek-Hooi Soh Senior Supervisor Assistant Professor __________________________________________ Dr. Aidan Vining Second Reader CNABS Professor of Business and Government Relations Date Approved: __________________________________________ i ABSTRACT Methanex is the world leader in methanol production and marketing. China is an important market; by 2014 it is forecasted to account for 50% of global demand. The purpose of this project is to determine whether Methanex should invest in methanol production in China. The project approach uses a multi-goal analysis focusing on three goals: (1) Consistent with Corporate Vision, (2) Sustainment of Existing Competitive Advantages, and (3) Profitability. Based on the analysis, the...
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...Supply Chain Management Certificate This “practical” interactive certificate series is designed to provide participants with a detailed look at global supply chain management with a focus on Purchasing, Inventory, and Warehousing. This certificate addresses issues in terms of today’s global supply chain and its supply chain streams and flow process, so practitioners can know how to make the most of this powerful tool. You will have the opportunity to explore a variety of global supply chain management areas in depth, extrapolate their logistics meanings, and apply the techniques needed to make it all work for your organization. Mastering the supply chain’s dynamics is no longer extraneous to survival in today's global environment—it's essential. Because logistics affects 30% or more of the value added to your product, it offers abundant areas of opportunity and exciting possibilities for lowering the bottom line. Where you may not be able to control the outside influences, ambiguities, and contradictions of the global economy at large, you can have a profound influence on controlling those internal logistics factors that substantially affect your profitability or cost containment efforts. Course Schedule Global Supply Chain Basics and Technology (Day 1) Global Logistics Basics and Functionality (Day 2) Essential Aspects of Purchasing (Day 3) Inventory ManagementPractices (Day 4) Mastering Warehouse Mechanics (Day 5) WHO SHOULD ATTEND • Logistics, supply chain, procurement...
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...Assignment 2 SCMT 200 OP55: Introduction to Global Supply Chain Management (Due 11pm SUN MAR 15, 2015) Required: 1. (8 marks) Assume that you are at the end of May 2015. Suppose among the headlines in Edmonton Journal at the end of May 2015 are:’ * “Crude oil prices increased by 25% in the month of May 2015” * “Costs are Flying High – Fear of Inflation Looming” * “Another Real Estate Frenzy – It’s HOT in Edmonton and Calgary” (6) Individual impacts of the three events respectively on inventory management 1) If oil prices rise 25%, the cost of production and manufacturing will go up. The cost of transportation will be rising, so ordering larger quantities of inventory less frequently will decrease transportation costs. The 25% increase will also create more work, which will lead to an increase in spending. This increase in spending will make up for the extra inventory that retail stores are holding. 2) If costs rising and a fear of inflation, spending will go down, manufacturing costs will rise and inventories will be lower for retailers to reduce a possibility for write-offs. Interest rates will also rise therefore reducing overall spending. 3) People are making large purchases in the real estate sector, spending is high so retailers will be stocking up more frequently and have more on hand inventory. Buffer stock will be higher to keep up with...
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...advantage of 3PLs ? a) Cost Reduction b) Cost Control c) Minimizing Revenues d) Employee conflict 4. Which one of the following is not a supply chain strategy framework ? a) Collaboration Strategy b) Supply Flow Strategy c) Customer Service Strategy d) Technology Integration Strategy 5. Which of the following is not an area of responsibility for a logistics manager? a) Purchasing b) Warehousing c)Information systems d) Marketing 6.The companies manage their supply chains through online transaction by means of a) Information b)Transportation modes c) Competitors d)The Internet 7. Using which of the following companies manage their supply chains ? a) Internet b) Competitors c) Information d) Transportation Mode 8. According to Professor Mentzer and colleagues, the supply chain concept originated in what discipline? a) Logistics b)Marketing c) Operation d) Production 9. Which one of the following is not a part of supply chain ? a) Employees. b) Services. c) Information. d) Materials. 10. The use of Web technologies to manage warehousing and transportation processes is called a) e-logistics b) e-replenishment c )Downstream processing d)Collaborative planning 11. The E-SCM process that includes integrated production and distribution processes is a) e-procurement b)Supply chain replenishment . c)Collaborative planning. d) e-logistics. 12. Which one of the following is a factor that hinders growth of 3PLs ? a) Cost Reduction...
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...Research Publication Date: 12 November 2010 ID Number: G00208603 Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. The company designed its supply chains based on a mix of cost optimization, delivery speed and product choices that customers value, while aligning internally across all functions to execute against this vision. Key Findings Dell's market and business strategies changed, requiring the company to move from a single supply chain to a customer segmentation supply chain approach. A unified, cross-functional business strategy with collaborative, decision-making processes across sales, marketing, product design, finance and supply chain is essential for segmentation. Segmentation is enabled by a cost-to-serve (CTS) methodology to dynamically allocate costs to business decisions, highlight net profitability and drive the right actions for each supply chain. Supply chain segmentation is a multiyear journey enabled by the development and alignment of organizational skills to the needs of the journey's different phases. Recommendations Start with segmentation of your company's customers and channels to understand the different demand rhythms and cycles. Focus on decreasing...
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...H&M had become the global leader in the ‘fast-fashion’ segment with a distinctive business approach that challenged most competitors. The business model, commonly referred to as ‘cheap-and-chic’, emphasised high fashion at prices significantly below those of competitors, with the fundamental principle being ‘Fashion and quality at the best price’. ,H&M已经成为全球领先的“快速时尚”段与独特的业务方法,大多数竞争对手的挑战。商业模式,通常被称为“cheap-and-chic”,强调高级时装的价格明显低于竞争对手,基本原则是“时尚以最好的价格和质量”。 ‘In 2010 we stepped up our investments in order to strengthen the brand further and secure future expansion.’ “在2010年,我们加强了我们的投资是为了进一步加强品牌和安全的未来扩张。” However, Zara, the prime retail brand of Spain’s Inditex, opened 120 new outlets in China during that same year and later during the year Inditex overtook H&M to become the world’s biggest fashion retailer by market capitalisation. For the first time H&M was seriously challenged by Zara’s rapid expansion, not least because of its fast growth in emerging markets. The increased competition and the fact that margins had started to erode due to increased cotton prices and rising production costs in Asia put the H&M high-fashion/low-price formula and aggressive expansion under scrutiny. Investors had come to trust H&M’s model that relied on a set of unique resources and capabilities, but Zara’s success questioned the sustainability of the formula. 然而,Zara,西班牙的Inditex的主要零售品牌,在中国开设了120家新店在今年晚些时候在同年和Inditex取代H&M成为世界上市值最大的时装零售商。H&M首次被Zara的快速扩张严重挑战,不仅是因为其在新兴市场的快速增长。竞争加剧...
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...Research Publication Date: 12 November 2010 ID Number: G00208603 Case Study for Supply Chain Leaders: Dell's Transformative Journey Through Supply Chain Segmentation Matthew Davis Faced with ever-changing customer needs, product commoditization, unique global requirements and new, low-cost competitors, Dell embarked on a three-year journey to segment its supply chain response capabilities. The company designed its supply chains based on a mix of cost optimization, delivery speed and product choices that customers value, while aligning internally across all functions to execute against this vision. Key Findings Dell's market and business strategies changed, requiring the company to move from a single supply chain to a customer segmentation supply chain approach. A unified, cross-functional business strategy with collaborative, decision-making processes across sales, marketing, product design, finance and supply chain is essential for segmentation. Segmentation is enabled by a cost-to-serve (CTS) methodology to dynamically allocate costs to business decisions, highlight net profitability and drive the right actions for each supply chain. Supply chain segmentation is a multiyear journey enabled by the development and alignment of organizational skills to the needs of the journey's different phases. Recommendations Start with segmentation of your company's customers and channels to understand the different demand rhythms and cycles. Focus on decreasing the time required...
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...Supply Chain Strategy The Importance of Aligning Your Strategies UPS Supply Chain SolutionsSM Copyright © 2005 United Parcel Service of America, Inc. All Rights Reserved. No part of this publication may be reproduced without the prior written permission of UPS Supply Chain Solutions. Our Insight. A UPS Supply Chain Solutions White Paper Introduction Chances are you’ve heard the term supply chain strategy. Used informally, it is often confused with supply chain management, where supply chain operations are controlled to reduce costs. There’s some truth to this definition, but supply chain strategy really is broader; it defines how the supply chain should operate in order to compete. Supply chain strategy is an iterative process that evaluates the costbenefit trade-offs of operational components. A well executed supply chain strategy results in value creation for the organization. Business strategy involves leveraging the core competencies of the organization to achieve a defined high-level goal or objective. It also includes the analytic and decision-making process surrounding what to offer (e.g., products and services), when to offer (timing, business cycles, etc), and where to offer (e.g., markets and segments) as a competitive plan. While the business strategy constitutes the overall direction that an organization wishes to go, the supply chain strategy constitutes the actual operations of that organization and the extended supply chain to...
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...Supplier chain strategies are one of the most important aspects of supply chain management. The key to success of an organization is the supply chain strategy. The supply chain makes up 55-85% to total costs for a business, so it is understandable why so many people are searching for newer and better strategies. (Bruce O. Bartschenfeld) A Keiretsu Network: Keiretsu network is a network composed of manufactures, supply chain partners, distributors and financiers who remain financially independent but work closely together to ensure each other’s success. The formation of a keiretsu allows a manufacturer to establish stable, long-term partnerships, which in turn helps them to stay lean and focus on core business requirements. (Whatis.com) Virtual Company: Virtual companies rely on a variety of supplier relationship to provide services on demand. In this strategy, a company forms a network with other companies. All companies are dependent upon one another. Each member of the network performs essential functions to the project. (Bruce O. Bartchenfeld) Vertical Integration: A vertical integration refers to a firm’s ownership of vertically related activities. The greater a firm’s ownership extends over successive states of the value chain for its product, the greater its degree of vertical integration. The extent of vertical integration is indicated by the ratio of a firm’s value added to its sales revenue: the more a firm makes rather than buys, the lower are its bought-in...
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...Int. J. Production Economics 133 (2011) 25–34 Contents lists available at ScienceDirect Int. J. Production Economics journal homepage: www.elsevier.com/locate/ijpe Identifying risk issues and research advancements in supply chain risk management Ou Tang a,c, S. Nurmaya Musa a,b,n a Department of Management and Engineering, Link¨ping University, SE-581 83 Link¨ping, Sweden o o Department of Engineering Design and Manufacture, University of Malaya, 50603 Kuala Lumpur, Malaysia c School of Economics & Management, Tongji University, Shanghai 200092, PR China b a r t i c l e in fo Available online 3 July 2010 Keywords: Supply chain Risk management Citation/co-citation analysis abstract The purpose of this paper is to investigate the research development in supply chain risk management (SCRM), which has shown an increasing global attention in recent years. Literature survey and citation/ co-citation analysis are used to fulfil the research task. Literature survey has undertaken a thorough search of articles on selected journals relevant to supply chain operations management. Meanwhile, citation/co-citation analysis uses Web of Sciences database to disclose SCRM development between 1995 and 2009. Both the approaches show similar trends of rising publications over the past 15 years. This review has piloted us to identify and classify the potential risk associated with different flows, namely material, cash and information flows. Consequently, we identify some research...
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