1) Question: Due to the fast growth of the business and lack of visibility of supply and demand, Clock Enterprises is facing significant customer service issues and the company is beginning to have frequent “out of stock” situations. Although Clock Enterprises model is “The Customer is King”, their current customer service as measured by case fill, is running at 85% compared to the best in class benchmark of 98.5%. What are your recommendations to resolve this issue?
Customer service score by itself may not sufficient to understand every aspect of the supply chain problems. Hence, I would recommend as the first step to significantly improve visibility into the entire supply chain process to understand key pain points. Greater visibility into a supply chain not only answers the basic questions of what is the current state, but it also helps answer questions such as why are we in this state? And what do we have to do to improve from here?
The SCOR model can be used to link business process, metrics, best practices and technology features into a unified structure to support communication among supply chain partners and to improve the effectiveness/efficiency of supply chain management and related improvement activities. The model analyzes the current state of the company, quantifies operational performance and provides a comparative view into benchmark data. Following SCOR metrics should be captured and analyzed in greater details as discussed in the class,
Deeper understanding of the above metrics will provide a list of improvement areas that the company should focus.
My second recommendation would be to setup an S&OP framework. Some of the key benefits include, * At planning level balances supply and demand
* Build bridge from customer value to supply chain efficiency * Links strategy and tactics
* Motivates continuous improvement
My next recommendation for Clock Enterprise would be to work closely with their supply chain partners to create a centralized demand information framework. Implemented successfully, a centralized demand information framework will help eliminate demand variability across stages in the supply chain. Clock Enterprises should also use some of the cutting edge forecasting techniques by leveraging historical data and seasonality of demand throughout the year. The company should try to procure and leverage best of the breed systems (ERP/APS) for better inventory management, forecasting, what-if capabilities etc. that can help improve their current situation. Lastly I would recommend Clock Enterprise to reach out to customers and make them aware of the improvements in meeting their on time delivery expectations so that the customer satisfaction and customer value scores improve in subsequent periods as well as help create positive customer perception in favor of the company. 2) Question: Below is a chart that was shown in your S&OP meeting. You are the Director-Supply Chain Management for the company and you are in charge of managing the process for S&OP meeting. You need to facilitate a discussion on what actions does the multi-functional S&OP team need to take to resolve the potential shortage 4th quarter of the year. What are the alternatives and who are the key departments that you need to gain alignment for each alternative? .
I will discuss the following alternatives with the multi-functional team including managers from Marketing & Sales, Finance/Accounting, Engineering/Manufacturing, Recruitment (HR) and Supply Chain (Procurement, inventory management, transportation etc.) as well as executive leadership representation. My analysis assumes that the above graph shows future demand and capacity curves. Option 1: Continue manufacturing at full capacity (100) from May to October even if the demand is lower than the capacity. This way, the accumulated inventory will help offset the sudden surge in demand from November onwards....
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