Designing and Managing the Supply Chain
iDesigning and Managing the Supply Chain
David Simchi-Levi Philip Kaminsky Edith Simchi-Levi
Solutions for Discussion Questions1
Kerem B¨lb¨l u u
1
We would like to thank Shiming Deng for his valuable contributions to the preparation of this manual.
Chapter 1
Introduction to Supply Chain Management
Discussion Questions
Question 1
Pick any car model manufactured by a domestic auto maker. For example, consider the 2002 Ford Thunderbird. a. The supply chain for a car typically includes the following components: 1. Suppliers for raw materials 2. Suppliers for parts and subsystems 3. Automobile manufacturer (Ford, in this example). Within a company, there are also different departments, which constitute the internal supply chain: i. Purchasing and material handing ii. Manufacturing iii. Marketing, etc. 4. Transportation providers 5. Automobile dealers b. Many Þrms are involved in the supply chain. 1. Raw material suppliers. For instance, suppliers for steel, rubber, plastics, etc. 2. Parts suppliers. For instance, suppliers for engines, steering wheels, seats, and electronic components, etc. 3. Automobile manufacturer. For instance, Ford. 4. Transportation providers. For instance, shippers, trucking companies, railroads, etc. 5. Automobile dealers. For example, Hayward Ford. c. All companies involved in the supply chain want to maximize their respective proÞts by increasing revenue and decreasing cost. However, companies may employ different 2
strategies in order to achieve this goal. Some of them focus on customer satisfaction and quick delivery, while others may be more concerned about minimizing inventory holding costs. d. In general, different parts of the supply chain have objectives that are not aligned with each other. 1. Purchasing: Stable order quantities, ßexible delivery lead times and little variation in mix. 2. Manufacturing: Long production runs, high quality, high productivity and low production costs. 3. Warehousing: Low inventory,
David Simchi-Levi Philip Kaminsky Edith Simchi-Levi
Solutions for Discussion Questions1
Kerem B¨lb¨l u u
1
We would like to thank Shiming Deng for his valuable contributions to the preparation of this manual.
Chapter 1
Introduction to Supply Chain Management
Discussion Questions
Question 1
Pick any car model manufactured by a domestic auto maker. For example, consider the 2002 Ford Thunderbird. a. The supply chain for a car typically includes the following components: 1. Suppliers for raw materials 2. Suppliers for parts and subsystems 3. Automobile manufacturer (Ford, in this example). Within a company, there are also different departments, which constitute the internal supply chain: i. Purchasing and material handing ii. Manufacturing iii. Marketing, etc. 4. Transportation providers 5. Automobile dealers b. Many Þrms are involved in the supply chain. 1. Raw material suppliers. For instance, suppliers for steel, rubber, plastics, etc. 2. Parts suppliers. For instance, suppliers for engines, steering wheels, seats, and electronic components, etc. 3. Automobile manufacturer. For instance, Ford. 4. Transportation providers. For instance, shippers, trucking companies, railroads, etc. 5. Automobile dealers. For example, Hayward Ford. c. All companies involved in the supply chain want to maximize their respective proÞts by increasing revenue and decreasing cost. However, companies may employ different 2
strategies in order to achieve this goal. Some of them focus on customer satisfaction and quick delivery, while others may be more concerned about minimizing inventory holding costs. d. In general, different parts of the supply chain have objectives that are not aligned with each other. 1. Purchasing: Stable order quantities, ßexible delivery lead times and little variation in mix. 2. Manufacturing: Long production runs, high quality, high productivity and low production costs. 3. Warehousing: Low inventory,
Bibliography: Bramel, J. and Simchi-Levi, D. (1997). The logic of logistics : theory, algorithms, and applications for logistics management, chapter 1. Springer, New York. Mavi Jeans (2003). Mavi.com. http://www.mavi.com/story.asp?s=4. Nike (2003). Nike Biz::About::Company Overview:: The Facts. http://www.nike.com/nikebiz/nikebiz.jhtml?page=3&item=facts. TechnologyEvaluation.Com (2002). ERP Evaluation Center - Technology Evaluation.Com. http://www.erpevaluation.com/index.asp. The Boeing Company (2003). Quick Facts. http://www.boeing.com/companyoffices/aboutus/quickfacts.html. 41