2. Homework 3: Prepare detailed written responses to the following: n What are s

Question

2. Homework 3: Prepare detailed written responses to the following: n What are some of the problems that may result from some forecasting methods (as demonstrated by NIKE's 2) Compare and contrast the characteristics of a traditional 3) Explain and give examples of the conflicting objectives 4) Explain what is meant by visibility, efforts that can be s) List three lean tools that apply to warehousing and disaster in 2000)? supply chain vs. a lean supply chain. among supply chain participants. taken to improve it, and the impact it has on suppl;y chain explain how these would be used for improvement efforts.

Explanation / Answer

(1) Cannot be answered without the NIKE's disaster case provided.

(2) Traditional Supply Chain focusses on satisfying customer demand without focussing much on the cost. In a traditional supply chain, entities or group of entities try to maximise their own value while passing down the costs to the next member of the supply chain, without taking into account the costs of the supply chain as a whole.
Lean Supply Chain focusses on producing high volumes at low cost. It tries to increase the supply chain value by reducing overhead costs and reduce "waste' (in Lean terms), where "waste" is any extra cost shouldn't be occuring within the supply chain or can be reduced by using alternate methods like aggregation of goods for last-mile delivery, trying to ship Full Truck Loads vs. Half or Semi Truck Loads, etc.

(3) There can be lots of conflicting objectives within a supply chain. It means that different entities try to maximise their own value, rather than looking at maximising the value of the supply chain as a whole. For example, production department may want to produce quantities which are based on the capacities of machines with fixed lot sizes or large lot sizes. However, distribution department may not be able to store/transport/sell that much of produce. It may have to store a lot of it. So, when production department is trying to lower its costs, it may lead to increased inventory costs. This is one type of conflict. There can be several such conflicts, e.g., cost vs. response time, short order lead time vs. high ATP (Available To Promise), Low variety of products vs. low cost per unit of each product, etc.

(4) Supply Chain visibility means the ability to track and trace Finished Goods, Raw Materials, WIP from their production source to their destination. It also means various supply chain entities like Procurement, Production, Distribution and Customer being able to share information with each other so that each if able to take decisions where the value of the whole supply chain gets maximised. Typical examples of visibility include sharing of information between manufacturer and supplier/vendor (VMI is a very good example), sharing of information on the inventory levels of the customer/retailer up the supply chain so that the replenishment decisions take into account when to order and how much to order.

(5) Three Lean tools that can be applied to warehousing are:

a. Standardization (Standard Work, 5S are great examples) - It can be used to create a standard work which can be easily followed by people. It would have reduce overhead costs and improve TurnAround Time (TAT)

b. Kanban (Continuous Improvement) - It helps identify and eliminate waste in the warehouse, e.g., extra time spent in picking, packing, receiving, stowage, etc.

c. Flow - It focusses on mapping and inbound and outbound activities so that the warehouse operates on a Pull model, rather than Push. It helps level the demand over the available working time.

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