!!BA#244:#Supply#Chain#Management#

Reminders#

!  CASE STUDY: Nike

!  20 minutes + 10 minutes ONLY

!  Ask questions!

!  You will grade the group !  40% - Content and SCM Analysis !  30% - Visual Ease and Presentation Flow !  30% - Interaction with Audience

!  Don’t grade your own group

Differences#

Parameter' Q)Model' P)Model'

Order!Volume! Constant! Variable!

When!to!Order! When!we!reach!re6order!point,!R!

A;er!a!fixed!>me,!T!

Stock!Level!Upda>ng! Each!>me!product!is!drawn!from!or!replenished!in!the!inventory!

Only!during!stock!review!at!end!of!T!

Inventory!Size! Less!than!P6Model! Larger!than!Q6Model!

Effort!required! More!than!P6Model!due!to!constant!monitoring!

Less!than!Q6Model!

Category!Type! High!value!and!Cri>cal!Products!

Low!value,!rou>ne,!and!non6cri>cal!products!

Modified#P@Model:#Optional#Replenishment#System##

!  Check!inventory!a;er!every!fixed!period,!T!

!  Order!is!placed!only!if!the!level!is!below!a!set!amount!

Modified#P@Model:#One#Bin#System#

Modified#Q@Model:#Two#Bin#System#

!!

Other#Techniques#

Technique' Solu6on'Approach' Characteris6cs'Linear!Programming! Op>mizing! Computerized;!linear!

assump>ons!not!always!valid!

Spreadsheet! Heuris>c!(trial!and!error)!

Intui>vely!appealing,!easy!to!understand;!solu>on!not!necessarily!op>mal!

Simula>on! Heuris>c!(trial!and!error)!

Computerized!models!can!be!examined!under!a!variety!of!condi>ons!

Spreadsheet#&#Simulation#Models#

!  Computerized!models!that!can!be!tested!under!different!scenarios!to!iden>fy!acceptable!(although!not!always!op>mal)!solu>ons!to!problems!

!  In!majority!of!organiza>ons,!planning!is!done!on!the!basis!of!experience!along!with!trial6and6error!methods.!Why?'

Why?#

!  Level!of!mathema>cal!sophis>ca>on!discourages!greater!use!

!  Assump>ons!required!in!certain!models!appear!unrealis>c!

!  Models!may!be!too!narrow!in!scope!

Spreadsheet#&#Simulation#Models#

Spreadsheet#&#Simulation#Models#

Spreadsheet#&#Simulation#Models#

Obsolescence#

!  as!a!process!whereby!goods!or!services!no!longer!meet!the!needs!of!the!current!user!

!  Four!main!types:!!  Technical!or!func>onal!obsolescence!!  Planned!obsolescence!!  Style!obsolescence!!  Postponed!Obsolescence!

Technical#Obsolescence#

!  New!or!more!func>onal!product!or!technology!superseding!the!old!!

!  A!product!targeted!for!technical!obsolescence!will!typically!cost!more!to!repair!than!to!replace!

!  Product!or!service!may!even!be!withdrawn!from!service!

!  e.g.!Microso;!withdrawing!its!service!support!for!Windows!95!opera>ng!systems!in!2002!

!  e.g.!video!casse^es!to!digital!versa>le!disks!(DVDs)!

Planned#Obsolescence#

!  Deliberate!introduc>on!of!obsolescence!into!the!marke>ng!strategy.!Why?!

!  Results!in!the!consumer!reducing!the!period!between!purchases,!and!thereby!genera>ng!sales!for!the!organiza>on!

!  Incongruent!with!CSR!–!waste!of!resources!and!exploits!customers!

!  Necessary!enabler!of!innova>on!and!economic!growth!

!  e.g.!Japanese!electronics!manufacturer!Toshiba!and!Sony!are!in!discussions!over!the!format!of!the!next!change!in!technology!from!DVDs!to!Hi!Defini>on!(HD)!DVDs!

Brazilian#lawsuit#accuses#Apple#of#‘planned#obsolescence’#with#fourth@gen#iPad#(2013)#

!  66month!difference!

!  “Apple!could!have,!when!launching!iPad3,!implemented!all!of!the!technological!upgrades!introduced!in!iPad4”!

!  “Consumers!thought!they!were!buying!high6end!equipment,!not!knowing!it!was!already!an!obsolete!version”!

Style#Obsolescence#

!  refers!to!a!change!in!style!that!results!in!a!product!no!longer!being!required!as!a!result!of!market!changes!

!  Examples?!

!  e.g.!automo>ve!industry!with!styling!on!motor!vehicles!being!implemented!annually!

!  e.g.!clothing!industries!with!clothing!fashions!changing!seasonally!

Postponed#Obsolescence#

!  Where!technological!improvements!are!not!introduced!even!though!they!could!be!

!  e.g.!car!manufacturer!develops!a!new!feature!for!its!car!but!does!not!include!the!feature!in!the!cheaper!version!of!the!car!

!  e.g.!base!model!Camry!does!not!have!electric!windows!or!seats!but!the!capability!is!there!

Drivers#of#Obsolescence#

!  The!product!life!cycle!

!  Changes!in!the!market!

!  The!effect!of!compe>>on!

!  The!business!risks!of!inaccurate!forecas>ng!

!  Changes!in!produc>on!methods!

!  Legisla>ve!and!Poli>cal!Environment!

Legislative#and#Political#Environment#

!  Chlorofluorocarbon!(CFC)!/!Freon!!  In!refrigera>on,!air6

condi>oning,!and!aerosol!cans!

!  1987!!  In!response!to!a!drama>c!

seasonal!deple>on!of!the!ozone!layer!over!Antarc>ca!

!  Montreal!Protocol,!which!called!for!dras>c!reduc>ons!in!the!produc>on!of!CFCs!

!!End#