analyzing a company's supply chain
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View the file attached for charts.
Can you assist me with an explanation of the follow 3 questions based on the attached charts.
1. What is happening with these six supply chains? Are they bringing the best value to their customers? If they are not, why not?
2. From a supply chain perspective, how might you correct these problems?
3. Outside of this simulation (i.e. in real life), do you believe that these sorts of supply chain problems exist with similar negative consequences on supply chain performance? Would your solutions work to solve these real life problems as well?
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Solution Summary
analyzing various supply chains and their effectiveness
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1) Abbey: Serious problem with backlogs. Considering the nature of demand (cyclical), the supply chain should be anticipating the demand before demand becomes orders. So, inventory should be built up right before the next surge of demand hits. That would keep the purple line above 0 and cut total costs, because the largest component of total cost is the Backlog with a cost factor of 1 versus inventory with a cost factor of 0.5. Customers' orders are delayed, as their orders are put on back order. That is rarely a good thing. In addition, costs are higher for Abbey and so naturally these costs must be passed on to the customer.
Frambozen: Serious problem with not reacting and not anticipating the increase in demand. To make matters worse, the supply chain appear to be totally unable to increase orders and supply to turn the situation around. They are even worse than Abbey. Frambozen customers are just not getting their back orders supplied as well as costs are increasing because of the huge backlog forming.
Mothership Wit: They did not at all anticipate the temporary drop in demand. Should understand what happened there. Was it internally driven (bad quality batch, recalls, etc.) or was it externally driven (a competitor temporarily offered great below cost prices, but then went out of business, etc.)? Another possibility is that demand suddenly jumped and Mothership was just not prepared. Because ...
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