1-28-14- introduction

Tuesday, 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
Doesnt 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 Case
Thursday, 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- information
Tuesday, 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 case
Thursday, February 06, 2014 2:12 PM
Class notes Page 4
Electronic marketplaces service as a platformthat 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 own
80% of market
Cuts out smaller car -
Improper exhange of information -
Standard setting -
Regulatory issues for emarkets
2-11-14 Market place
Tuesday, 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 effect
Thursday, 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 RFID
Thursday, 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 case
Tuesday, March 11, 2014 2:14 PM
Class notes Page 10
3-14-14 Test Review
Thursday, March 13, 2014 2:45 PM
Class notes Page 11