class notes

1-28-14- introductionTuesday, January 28, 2014 2:17 PM

Class notes

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

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

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

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

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

Class notes

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

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

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

3-14-14 Test ReviewThursday, March 13, 2014 2:45 PM

Class notes

class notes

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