...Date: | December 2, 2014 | To: | VP of Operations of Supply Chain Management, Jacobs Industries | From: | Supply Chain Game Group: frontrow | Subject: | Executive Summary for Jacobs Industries | Introduction Business Situation Jacobs Industries is faced with a difficult challenge in the development of an efficient and profitable supply chain strategy. Jacobs Industries produces an industrial chemical, more specifically a foam chemical, which can be used to produce very efficient thermal and acoustic insulators. Because of these insulator properties we have started to market to manufacturers of air conditioner retrofit kits, a highly variable demand market. In addition to the complexities associated with forecast and inventory planning, Jacob’s Industries is involved in a very competitive market. If Jacobs cannot meet certain orders or inventory levels to meet demand our potential customers can easily buy from competitors. To accommodate this competitive market Jacobs must develop a supply chain strategy that is efficient in production and delivery to reach this high level, seasonal and level demand. Many supply chain choices and assessments encompassed our key operational decisions. The first important supply chain decision involved the calculation of an appropriate reorder point (ROP) and Economic Order Quantity (EOQ) for all the regions including Calopeia, Sorange, Entworpe, Tyran, and Fardo. Secondly, our team needed to decide on which regions...
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...09th April, 2003 Budget for Porcelain Formers Size Supplier Price Qty Total 8 HT 16.35 180 2943 7 HT 16.35 120 1962 9 GBH 12.79 500 6395 Freight Charges 400 Total $ 11,700 Approved by:_________________ S. M. Salman GM Gloves Division 13th June, 2003 Budget for Aluminium Coated PTFE Formers Size Supplier Price Qty Total XL Hanyang USD88 36Pairs 3168 Freight Charges 400 Total $ 3,568 Approved by:_________________ S. M. Salman GM Gloves Division Noted: The last price of above formers in Aug-2002 was USD80/pair, we have kept 10% provision for increase in price. 22nd July, 2003 PVC Pigment Supplier Price Qty Total West USD88 36Pairs 3168 Freight Charges 400 Total $ 3,568 Approved by:_________________ S. M. Salman GM Gloves Division Noted: The last price of above formers in Aug-2002 was USD80/pair, we have kept 10% provision for increase in price. 27th June, 2003 Approval for Acrylic/ Wool Yarn as follows: Description Supplier Qty Price Amount (Kgs) (USD) 1/15 DMM 70/30 Acrylic/ Wool Yarn P.T. Kahatex 1400kgs...
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...Supply chain game – Lego game Supply chain game – Lego game XXXXXX Casper XXXXXX Casper Supply Chain Management Supply Chain Management Introduction First and foremost the game provided an understanding of the bullwhip effect and furthermore also insight to the challenges of distributing material and information within a supply chain. I have applied the cause-effect theory in order to obtain an understanding of the root causes, the reasons, to why the bullwhip effect, the result, occurred in the supply chain in the LEGO game (Slack, Chambers and Johnston, 2010). Hence the structure of this assignment will be based upon a cause-effect analysis which treats the experienced bullwhip effect as the result. Thus this assignment describe the causes of this effect identified through reflecting upon the LEGO supply chain game played September 25, 2015. Bullwhip effect The bullwhip effect is unexpected distortion of information observed in a supply chain and can be caused by demand fluctuations e.g. variability, which is processed and amplified through the companies in a supply chain. The demand fluctuations are amplified as they are processed upstream in the supply chain and hence the swings, the demand order variability, of the “bullwhip” can be expected to increase the farther upstream in the supply chain a company is located (Lee, Padmanabhan and Wheng, 1997). Reflections and learning outcome from the game I will divide this reflection and learning...
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...Simulation games in operations management: the importance of immediate post game analysis. Global Management Journal, 6(1): 61-64. 1. The aim of this paper focuses on 3 types of learning, pre-game, post game and most especially the discovery of post game analysis in context of the MIT Beer Game (Onoferei & Stephens, 2014). The paper explains that it is essential for research to be conducted reflecting on experiential learning practices utilised to enhance student interaction and understanding of supply chain with the support of simulation techniques(Case studies, site visits & games) (Onoferei & Stephens, 2014). 2. These activities prove that concepts and models create value when used in relation to real global problems in making decisions and finding solutions (Onoferei & Stephens, 2014).The difficulties were for educators to encourage learners to understand class activities from an organisational point of view. In acknowledging this, the paper contributes to the fact that instructors must help to make sense of thinking practices such as data interpretation and problem solving implications. The Beer Game description used in this paper comprises of the separate functions of the brewers, distributors, wholesalers and retailer. (Onoferei & Stephens, 2014). The outcome is to be able to meet consumer demand by bringing together the supply chain and reducing the total expenditure amongst its functions. This creates value across the supply chain as information...
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...entire system. System dynamics use feedback loops and stocks and flows to study complex and non-linear systems. Dynamics of the system contain quantities that vary over time. There are several laws of Fifth Discipline showing how system dynamic works. 1) For every action, there is a reaction. It is self-proofed in the beer game. Every order has to be fulfilled, either in the current week (if enough stock is available) or in one of the next weeks (items go on backorder). 2) Short-term improvements often lead to long term difficulties. In the beer game, it’s always a tradeoff between fulfilling demand and minimizing cost. Timely delivery calls for enough inventory, while cumulative inventory results in climbing inventory cost, due to more people to handle the beer and more storage space, and there is also a possibility that the beer will be left in your inventory when the total period is over or the redundant beer might go bad since it cannot be kept long. 3) Cause and effect are not necessary closely related, either in time or in space. Sometimes solutions implemented here and now will have impacts far away at a much later time. In the beer game, it is not possible for any one component of the system to be immediately aware of the actions and needs of all other organizational components. A change of strategy for ordering can lead to a better condition, though may not be real-time. 4) The entirety of an issue is often more than the simple aggregation of the components...
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...The Fresh Connection Game Strategic Supply Chain Management SHT 4001 University of HUDDERSFIELD Name: Zhen Lei (Ray) ID: U1069600 Course: Transport & Logistics management Module Leader: Jayne Hemmingham Executive Summary The main purpose of this report is to discuss and introduce the experience of playing the fresh connection game with answering three main questions, The first one is to consider the competitive strategy of the team and evaluate the scope of team’s supply chain strategy was marching with its competitive strategy. The second is to utilize the financial information to analysis the situation of the business in the last round. Examples need to be explained how our team’s supply chain strategy influenced the financial performance of our team. The last point is to explain how the information can be used in the business to achieve sustainable improvements. The participants not only need to introduce their experience of the game but also demonstrate relevant academic theory and concepts. Introduction This report concentrates on reflecting on the experience of playing the fresh connection game experience. The fresh connection is a website which is one the strength of supply chain management researching environment and is played by both students and professionals. It provides a learning experience of supply chain. The students will make strategic decisions in the supply chain of the fresh connection which is based on a substantial producer of...
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...Interpersonal Communication in the Supply Chain Rick London Muhlenberg College Communications Nancy Miller July 15, 2015 Abstract Effective communication is an essential part of any interaction between two or more parties. For tasks to be completed, a message must be sent so that it can be understood and acted upon by all the parties involved. In business, parties to a transaction may or may not personally know each other and oft times they may not be on the same continent or speak the same language. This paper examines several case studies to determine if the personal relationships and interpersonal communications between parties in supply chain management has a positive effect on the transaction. Interpersonal Communication in the Supply Chain Introduction Supply Chain Management (SCM) emerged as an employment field in the nineteen nineties; before that time, the study of communication in business practices has occurred since at least 1958 (Gligor & Autry, 2012, p. 24). This paper explores the necessity for effective interpersonal communication in the supply chain in the present. Communication is defined as the act or process of using words, sounds, signs, or behaviors to express or exchange information ("Definition of Communication," 2015, para.1). We are all familiar with communication in our daily lives and the importance it holds in conveying or receiving a message, but, when the operation of a business, or a supply chain in this instance, relies upon...
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...Strategies for Supply Chain Management for the Trading Agent In an effort to address the of increasingly sophisticated and advanced methods of supply chain management, a joint team of researchers from the e-Supply Chain Management Lab at Carnegie Mellon University, formed The Trading Agent Competition (TAC). This particular forum was designed to address the problem of trading agent competition within the global marketing structure. Within this writing, the problems inherent to trading agent competition will be addressed and certain formulas will determine the validity of such theorems. A definitive description of a supply chain can be described as “a process that transforms materials into products and delivers them to customers through specific activities” 1. An overall objective of supply chain management is to improve upon the timely delivery of goods to suppliers and customers alike, thus while keeping costs at a minimum. This includes all handling and storage costs involved within the supply chain management process. Key aspects of the stages involved are securing raw materials, manufacturing, storing, negotiating, the receipt of customer orders, and delivering the products, paired with using standards adopted from long withstanding relationships between major trading firms. 1 P.B. Schary, T. Skjott-Larsen, Managing the Global Supply Chain, second ed., Copenhagen Business School Press, 2001. The pretense of the...
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...SOSTACTM (Situation analysis, Objective Setting, Strategy, Tactics, Actions and Control) framework developed by Paul Smith to summarize the Supply Chain Management (SCM) strategy. Situation Analysis Microsoft did not have a presence in the gaming console market and was up against strong competitors which already had established markets such as Sony (Playstation) and Nintendo (GameCube). This competitive landscape put them in a position wherein the company needed to develop a product which offered features that were comparable to existing products in the market place and priced perfectly so that they can establish the Xbox in the market. Moreover, it was critical to launch in time for the 2001 holiday season to allow Xbox to have a presence in the marketplace before it became up against the “next-generation product”. Thus, Microsoft’s early challenges came at a price of high production ramp up costs because it needed to produce 100,000 consoles in a week in order to launch the new Xbox in time for Christmas. Objective For Microsoft, the original Xbox was primarily aimed at entering the gaming console market, learning from the experience and paving the way for the next generation of products. Strategy Microsoft adopted a push supply chain strategy using an extended supply chain. It developed its products based on existing game consoles with added features, most of which were built to compete against Sony PS2. In addition to having features similar to other gaming...
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...Ertek, G., Eryılmaz, E. (2008) “The bullwhip effect in supply chain: Reflections after a decade” . CELS 2008, Jönköping, Sweeden. (presented by EmreEryılmaz). Note: This is the final draft version of this paper. Please cite this paper (or this final draft) as above. You can download this final draft from http://research.sabanciuniv.edu. THE BULLWHIP EFFECT IN SUPPLY CHAIN Reflections after a Decade Gürdal Ertek, Emre Eryılmaz Sabancı University, Orhanlı, Tuzla, 34956, Turkey Abstract A decade has passed since the publication of the two seminal papers by Lee, Padmanabhan and Whang (1997) that describes the “bullwhip effect” in supply chains and characterizes its underlying causes. The bullwhip phenomenon is observed in supply chains where the decisions at the subsequent stages of the supply chain are made greedily based on local information, rather than through coordination based on global information on the state of the whole chain. The first consequence of this information distortion is higher variance in purchasing 1 quantities compared to sales quantities at a particular supply chain stage. The second consequence is increasingly higher variance in order quantities and inventory levels in the upstream stages compared to their downstream stages (buyers). In this paper, we survey a decade of literature on the bullwhip effect and present the key insights reported by researchers and practitioners. We also present our reflections and share our vision of possible future...
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...With the video game industry being the fastest growing sector of the growing entertainment industry, the industry's revenue has now reached $26 billion in annual revenue and there is currently no indication of decline in the industry. So, in order to identify how the revenue is distributed, it's essential to look at the supply chain of the entire PS3 business. As seen in the supply chain, there are opportunities in many aspects of the console business, coming from the actual console sales as well as extras such as games. The customers, as identified by our segmentation analysis table, are at the end of the supply chain, and their consuming of video games are distributes across several actors. Additionally, the most known among the actors are of course the hardware manufacturers, which include Sony, Nintendo and Microsoft. Except for the revenue coming from the console sales, they also get about 20% of the market price for the games, which are mostly sold in the growth level of the product life-cycle. The additional revenue in the supply chain is split among the other actors. Looking more closely at the publishers and developers, we realize that the publishers are likely to take a large portion of the revenue. Those are the large international companies that have sufficient funds to build a distribution network and employ developers to pull off new best-selling games for the consoles. Hardware manufacturers usually try to pull off deals with these companies when they identify...
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...Root Beer Game Simulation John Doe TUI University ITM 436 Operations Mgmt and Operations Sys. John Doe, Ph.D. What I learn about supply chain management during this tutorial? Successful supply chain management is significant to the survival of today’s business. To review supply chain strategies and evaluate proposed changes that impact the business as a hole, supply chain managers should be able to assertively predict their network’s performance under a range of conditions. This apparently impossible task has urged a search for better software to help decision makers analyze the design and operation of their supply chain. Computer simulations have become the tool of choice. Since simulation capture real world system variability, a simulation program helps managers to better understand the supply chain as it presently exists. Most significantly, a simulation gives planners a realistic view of what will happen in their supply chain under conditions that do not currently exist, but might take place. The tutorial presented a distribution network for a root beer beverage. The simulation starts in week 16 of the inventory with 170,000 cases of root beer on backlog. Having product cases on inventory or backlog will add additional expenses to the company (inventory $.50/bottle and Backlog costs $1/bottle). The business objectives include reducing inventory and backlog cost. The simulation project provides managers a tool for supporting strategic supply chain decisions....
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...when the demand is amplified in the supply chain as they move up in the channels of the supply chain of a firm. Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies. Companies can effectively counteract the bullwhip effect by thoroughly understanding its underlying causes. Procter & Gamble (P&G) introduce this term. Logistics executives at Procter & Gamble (P&G) examined the order patterns for one of their best-selling products, Pampers. Its sales at retail stores were fluctuating, but the variabilities were certainly not excessive. However, as they examined the distributors' orders, the executives were surprised by the degree of variability. When they looked at P&G's orders of materials to their suppliers, they discovered that the swings were even greater. At first glance, the variability did not make sense. While the consumers, in this case, the babies, consumed diapers at a steady rate, the demand order variability in the supply chain were amplified as they moved up the supply chain. P&G called this phenomenon the "bullwhip" effect. (In some industries, it is known as the "whiplash" or the "whipsaw" effect.) Causes of the Bullwhip Effect Researchers found out that the factors which cause the bullwhip effect are the demand forecasting and amplification of oeders to the upper level of the supply chain. The best illustration of the bullwhip effect is the well known "beer game." In the game, participants (students, managers,...
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...The Beer Distribution Game (Channel Coordination Simulation) This exercise was developed by Forrester at MIT to study industry dynamics during the 1960s. The exercise is now being played in most major business schools as supply chain management has become an important strategic issue for business to stay competitive. The exercise allows you to experience first hand the flow of materials through a supply chain, see its mechanics, and appreciate some important phenomena associated with a supply chain. Students are divided into teams and compete with each other. Each team comprises of four members and each member will work independently to minimize the total inventory carrying costs and stock-out costs of the whole distribution network over the course of many time periods. Collusion (i.e. talking) among team members is strictly prohibited during the game. The four members of each team will play the roles of the Retailer, Wholesaler, Distributor and Manufacturer in a supply chain. Each member is responsible for making his/her own ordering decision. The system will keep tab of inventory and ordering information as the game progresses. Obviously, your ordering decision will affect your inventory and stockout costs, and therefore the overall performance of your team. Assume that this is a new product, so you don’t any reliable historic record to forecast your demand at the start of the game. The cost parameters are as follows. Any unmet orders at all four players...
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...Introduction 1 2. The Bullwhip Effect as a Supply Chain Phenomenon 1 2.1. Managing the Supply Chain 1 2.2. The Bullwhip Effect as Supply Chain Dynamics 2 2.3. The Bullwhip Effect as an Inevitable Consequence of Supply Relations—The Beer Game 3 2.4. The Reasons for the Bullwhip Effect 3 2.5. Studying the Bullwhip Effect in Data 5 3. Formal Analysis of the Bullwhip Effect 7 3.1. Models Based on Serially Correlated Demand 7 3.2. Measuring the Effect of Transparency 8 4. Mitigating the Bullwhip Effect 8 4.1. Information Policy 8 4.2. Reducing Lead Time 8 4.3. Collaboration of Retailers 9 5. Summary 9 References 10 Appendix 12 List of Figures Figure 1: Order fluctuations in the beer supply chain 12 1. Introduction The US-American telecommunications company CISCO depreciated 2.25 million US dollars in the third quarter of 2001 due to excess stock (Beer, 2014, p. 1). According to Beer (2014, p. 3.) the bullwhip effect is the probably most important reason for this depreciation. The bullwhip effect affects production and leads to a shortage of stocks or excess stocks, drops in sales, increases inventory costs and instability of planning (Beer, 2014, p. 3). Productivity losses due to the bullwhip effect are between 10 and 30%, according to Beer (2014, p. 3). Thus, eliminating the bullwhip effect is one of the most important goals of supply chain management. Since the length of production chains has increased over the last decades, due to the...
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