class notes
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1-28-14- introductionTuesday, January 28, 2014 2:17 PM
Class notes Page 1
Supply chain can set you up for success/failure-
All parts of the supply chain are important-
Worldwide launch-
Easy to create supply chain?-
Unique product/ different from existing products-
Key learning on Croc Case
Better replacement system-
Competitive advantage-
Demand is more variable-
Crocs can be easily imitated/ need to launch globally-
Sell to small business-
Why does Crocs need a great supply chain?
Raw material ---> ○
Pellets
Raw material○
Croc Supply chain-
Evolution of the supply chain
Replenish products in the same season-
Introduce new products-
which avoided fees from large retailers○
Configure 24 packs
Customized boxes○
Worked with small retailers -
Avoid taxes and import duties-
Molds of crocs could be moved easily ○
Flexible production-
Examples of how Crocs supply chain is better?
Flexible supply chain-
Proprietary material (Croslite patent)-
Global capabilities-
Unique products-
Crocs core competencies
Doesn’t make sense to acquire them because the raw material isn't unique
Raw materials are commodities○
Acquire an existing shoe company ( bad idea)
Acquire complementary products ( good idea)
growth by acquisition ○
T shirts
Material - doormat, totes (beach bags), kneepads
Product expansion○
Vertical acquisition of raw material-
Explore core competencies
GM = selling price - COGS-
Products Selling Price COGS GM No inventory Over inventory
A 100 70 30 30 70
B 100 30 70 70 30
Consider 2 products-
If GM is high, excess production/ inventory is the better strategy -
If GM Is low, then less production/ inventory is better-
How does your gross margin influence inventory decision?1-30-14- Croc CaseThursday, January 30, 2014 2:10 PM
Class notes Page 2
How many facilities
Location
Inventory
Transportation
Sourcing /where materials come from
Planning○
Changes in demand
Changes in customer orders
Changes in raw materials availability
Response○
2 main purpose-
Why information is important in supply chain?
Reach out to new customers○
Seek out new suppliers○
Search-
Coordination /exchange information-
Performance monitoring-
Digitization /virtualization-
Integration-
What has changed in supply chains with the intranet?
Supplied based on actual customer orders○
Dell, online○
Personalized products○
Eliminate overhead ○
Unpredictable demand○
Pull-
Supplied based on demand forecast○
Retail stores○
Timeliness○
Mass manufacture○
Predictable demand○
Take decision to produce before demand is realized○
Push-
Pull vs push supply chain
e.g. share engineers, purchase managers○
Joint resource dedication-
Degree of responsibility for design-
Intellectual property (IP) agreements-
Conducting detailed audits-
Key steps in preparing your company for eDesign
Pull and push- when the process is started
2-4-14- informationTuesday, February 04, 2014 2:10 PM
Class notes Page 3
Better product-
Better service-
Two things a company needs to deliver value
Call center○
Generous shipping and return policy○
Customer service-
Online product information-
Company culture-
Fulfillment center/ warehouse-
Huge inventory-
What are Zappos core competencies
Static shelves-
Conveyer belts-
Robots-
Warehousing technologies
More time efficient-
Reduce labor cost-
Better quality control-
More productive-
Labor injuries-
Better organized warehouse-
Benefits of Siva robots in warehouse
2-6-14 Zappos caseThursday, February 06, 2014 2:12 PM
Class notes Page 4
Electronic marketplaces service as a platform that connect organizations and transact in areas with little distinctive power in relationships
-
Market place
Accept payments-
Shipping/logistics-
Account management-
Posting-
Comparison-
Customer service-
Functions of e-market
Location independence-
More variety (options)-
Customer reach/ low search cost-
Customized catalogs-
Collaborations-
Benefits of an e-market
Who owns the market-
Single industry
Vertical○
Across industry
Horizontal○
Direction of -
Raw materials○
Maintenance, repair and operations
MRO○
Types of products-
Classification of markets
Fragmentation
Buyer Seller B2B
Dominant Fragmented Buy side
Fragmented Dominant Sell side
Fragmented Fragmented Exchange
Dominant Dominant Consortium
Scenario- emarket is run by GM/Ford/Chrysler, where they own80% of market
Cuts out smaller car-
Improper exhange of information-
Standard setting-
Regulatory issues for emarkets
2-11-14 Market placeTuesday, February 11, 2014 2:07 PM
Class notes Page 5
Bullwhip effect
If consumer demand is variable, how does this variability change in the supply chain?
Supplier ---> factory ---> distributor --> retailer ---> consumer
More variability in demand at supplier than at retailer. Becomes more given towards consumer
Bullwhip effect - the variability of demand increases as you go away from the consumer
Excessive production at sometimes and idle capacity at other times-
High inventory / stock out-
Premium transportation-
Why is the bullwhip effect is a problem?
2-20-14 Bullwhip effectThursday, February 20, 2014 2:06 PM
Class notes Page 6
Class notes Page 7
RFID
Tied to product category; not to product-Wear and tear/ lost-
Base on line of sight, have to have reader in correct position in order to read barcode-
Read 1 code at a time-
Cannot be rewritten-
Bar code limitations
Radio frequency identification-
Credit cards○
EZ pass○
Car keys○
Security ○
Applications-
RFID tag○
RFID reader○
Host system and application○
Three components to use RFID-
Powered by incoming RF. Small, cheap and long life, no battery
5m range
Passive tags(retail stores)○
Battery powered. Read from 100ft away
More reliable reading
Active tags(EZ pass)○
Transmit using backscatter or readers RF power
Battery for logic
Range like passive. Reliability like active
Semi active tag○
Types of RFID-
Contains an ID○
Read only tag-
Contains an ID plus other information ○
Read /write tag-
Saves times○
Accurate/ reduce possibility of error○
Instant update○
Saves money/ less people○
Put things in correct location/ easily locate inventory○
Benefits of RFID in supply chain-
Assemble correct parts○
Asset tracking- rental cars, hospitals○
Prevent counterfeiting- pharmacy industry○
Sensitive environments ○
Benefits in manufacturing-
Supply chain- levels of tags-
RFID
2-27-14 RFIDThursday, February 27, 2014 2:11 PM
Class notes Page 8
Cheaper
Less control
Prone to loss
Pallet level tagging- 1 tag per pallet○
Case level tagging- 1 tag per case(4 tags per pallet)○
More expensive
Greater visibility of product
Product level tagging- 1 tag per product○
Supply chain- levels of tags-
Class notes Page 9
Improvement in supply chain with RFID○
Challenges in RFID implementation○
different levels of RFID tagging○
Key learning-
RFID case
Stock outs (20 - 25% of stock outs may be false)-
Shrink (total cost is around $26 billion)-
Incorrect materials are shipped, especially in mixed pallets-
Labor intensive-
Problems in retail supply chains
Stock outs-
Distribution in point of sale data-
Consequences of these problems
Aggressive promotions-
Case pack size-
Product variety, 45-50k SKU-
Reliance on employee judgment-
Employee workload-
What causes these problems
3-11-2014 RFID caseTuesday, March 11, 2014 2:14 PM
Class notes Page 10
3-14-14 Test ReviewThursday, March 13, 2014 2:45 PM
Class notes Page 11
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