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A. Artale Supply Chain Management MBA247.1/EWMBA247.1

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HAAS School of Business

Supply Chain ManagementSyllabus

Professor: Angelo ArtaleTime: Thursdays, 6-9:30PM

Room: C110Office Hours: By appointmentE-mail: [email protected]

Phone: 916 296-0497

Course DescriptionSupply Chain Management is about the management of material and information flows in

multi-stage production-distribution networks. Driven by fierce global competition andenabled by advanced information technology, many companies have taken initiatives toreduce costs and at the same time increase responsiveness to changes in the marketplace.

This course will provide students with the knowledge and the tools necessary to develop,implement, and sustain strategies for managing supply chain issues.We will begin reviewing the basics of supply chain: Forecasting, Aggregate Planning,

Inventory Management, Efficient Consumer Response, Postponement, Transportationand Network Design. We will focus on the analytical decision support tools (both models

and applications) as well as on the organizational models that successfully allowcompanies to develop, implement and sustain supplier management and collaborativestrategies. Emphasis will be given to understanding change management implications

when executing supplier and collaborative strategies. Business case techniques for theadoption of tools for decision support, execution and implementation will be illustrated

and used throughout the class. We will then cover some international as well asoperational issues in supply chains. Particular relevance will be given on how tostrategically think about Outsourcing. The course will end with the discussion of case

studies on the competitive advantage of enterprises with an effective Collaborationprogram through Virtual Integration. Students will face real life situations during the

entire course and will be requested to develop solutions to current issues. Guest speakerswill share their experiences in supply chain management applications and consulting.This course will provide an excellent background to all consultants, general managers and

corporate finance generalists. Those interested in brand management or channelmanagement will find it complementary to their interests.

Course Material

Chopra and Meindl, Supply Chain Management: Strategy, Planning and

Operations

MBA247.1/EWMBA247.1 Course Reader (case studies and articles)

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Grading and Class Preparation

Case studies discussion and submission: 35% - group preparationThis is a case based class. This will account for 35 % of the grade. All cases must be

prepared prior to coming to the class. Not for all cases a written submission is required.

For those cases for which written submission is required, each case write-up is due ingroups. Please keep group size to a maximum of five. Please read the short note that willbe distributed prior to the discussion of the case and try to structure case reportsaccordingly.

Class participation and contribution: 15% - individual preparation

The entire class will benefit only if each of you contributes to the group discussion. Forthis reason, 15% of the grade will be for class participation and contribution on thenewsgroup [to be set-up in Catalyst].

Homework problems assignment: 10% - individual preparation

Exercises assignments will help you to become familiar with the more technical modelsand tools that we will learn during the course. 10% of the grade will be for the

homework problems.

Final exam: 15% - individual preparation

The final exam will consist of a series of short conceptual questions that each of you willanswer individually. The primary objective is for you to review all concepts taught in

class one last time. The exam is open text (i.e. you are allowed to use any course materialas well as your personal notes) and its weight is 15% of the grade.

Project presentations: 25% - group or individual preparation

Finally, 25% of the grade will be for a final project. Details of the project will be givenon the first day of class.

As most of the work is in groups, individual grades will take into account a peer reviewfrom each group member of other members in the group. It is extremely important andpart of the honor code that each member of a group contributes to the case analysis by the

group. If any individual has not contributed for a particular week, (s)he should notappend his/her name to the case report but submit a separate report on their own. It will

also be the groups responsibility to ensure that this happens. Only one written report willbe due per group. However, as I have stressed, each member must contribute to theanalysis leading to the report. Homework problem assignments that require individual

preparation may be discussed in groups for clarification purposes, but each of you has toindividually write and submit the solutions.

Missing a Class

If you know that you will miss a class, you are required to notify me by e-mail as soon asyou know it. There are no make-up classes. However students that miss a class for

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health reasons or important personal matters, may receive an opportunity to make up forthe points lost.

Use of computers and calculators

You are encouraged to take your computer with you to class. Some classes, as noticed in

the class schedule, require you to bring your computer in order to practice some of themodels that will be presented.

Course Outline and Schedule

Please refer to the Glossary for a definition ofRead, Prepare, Submission, Download,and Additional

INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

Objective: Introduction and overview of the course

Class 1 (August 29, 2002)

Course Overview

Read:o Supply Chain Basics (Chopra and Meindl, Supply Chain Management:

Strategy, Planning and Operations, Chapter 1-3)

Objective: Supply Chain Strategy Framework

Prepare:

o Kellogg case Seven Eleven Japan

Class 2 (September 5, 2002)

Submission:o Case Study: Halloran Metals HBSP # 683-062

PLANNING DEMAND AND SUPPLY IN A SUPPLY CHAIN

Objective: The goal of this session is to stress the importance of planning in a supply chain and providebasic tools that can be used when planning demand and supply.

Prepare:

o Planning Demand and Supply in a Supply Chain (Chopra and Meindl,Supply Chain Management: Strategy, Planning and Operations, Chapter

4-6)

Additional:

o Case Study: Specialty Packaging Corporation (A) and (B), Chapter 4 andChapter 5


Submission:

COMPETITIVE ADVANTAGE IN SUPPLY CHAINS

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o Homework Problem: Mintendo Game Girl (Chopra and Meindl, SupplyChain Management: Strategy, Planning and Operations, Chapter 6)

MANAGING ECONOMY OF SCALE AND UNCERTAINTY IN SUPPLY CHAINS

Objective: We will discuss the effects of economies of scale, volume discounts and short term discounts

on order sizes and thus inventory and flow times in the supply chain. We will then discuss the impact ofuncertainty on inventory policies. We will continue with our discussion on Inventory Management to study

impact of supply and demand uncertainty. We will try to characterize products by demand characteristics

(highly uncertain to stable) and see how appropriate purchasing decisions can be made. In addition, we will

introduce the powerful concept of risk pooling in managing inventory.

Prepare:

o Inventory Management Risk Pooling (Readings Simchi-Levi, Kaminsky,Simchi-Levi,Designing and Managing the Supply Chain, Chapter 3,

Chopra and Meindl, Supply Chain Management: Strategy, Planning andOperations, Chapter 7)

o Safety Inventory (Chopra and Meindl, Supply Chain Management:

Strategy, Planning and Operations, Chapter 8)


Submission:o Homework Problem: Exercises 7.1, 7.2, 7.3

o Case Study: Managing Inventory at ALKO (Chapter 8)

RESPONSIVE SUPPLY CHAINS: MASS CUSTOMIZATION

Objective: Our ability to manage inventory effectively depends critically on uncertainty, supply leadtimes, and product life cycles. Long supply lead times and short product lifecycles characterize fashion

goods. Even in staple consumer goods, today's environment is characterized by explosion of variety. How

to manage inventory / procurement in such settings. This is the primary focus of the next 3 sessions. Wewill start with studying supply chain designs appropriate for Mass Customization.

Prepare:

o Mass Customization at Hewlett-Packard: The Power of Postponement,HBR, January 1997

o Teaching note: Postponement, Kellogg Graduate School ofManagement [This is not included in your reader]

o Case Study: Hewlett-Packard DeskJet Printer Supply Chain (A)

(Stanford Case)

Objective: We next consider fashions goods in the apparel industry and analyze appropriate sourcingstrategies in an international context. We will use the Sport Obermeyer case for introduction to some

fundamental decision making tools under uncertainty.


RESPONSIVE SUPPLY CHAINS: ACCURATE RESPONSE

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Prepare:

o Determining Optimal Level of Product Availability (Chopra andMeindl, Supply Chain Management: Strategy, Planning andOperations, Chapter 9)

Additional:

o Coordination: An Overview, HBSP 9-696-001 Submission:

o Project proposals

Class 6 (October 3, 2002)

Submission:

o Case Study: Sport Obermeyer, HBSP # 9-695-022

MANAGING TRANSPORTATION IN SUPPLY CHAIN

Objective: We will discuss the domestic transportation industry and consider the different modesavailable. We will correlate the link between transportation and inventory costs in the design of

transportation networks. We will also consider different issues that are relevant when making transportationdecisions. We will then consider some of the issues in facilities location in supply chain. Gianpaolo

Callioni will then provide an overview of some of most recent trends in Supply Chain Management at HP.

Prepare:

o Transportation in a Supply Chain (Chopra and Meindl, Supply ChainManagement: Strategy, Planning and Operations, Chapter 10)


Submission:o Case Study: Merloni Elettrodomestici SpA: The Transit Point

Experiment, HBSP # 9-690-003 Guest Speaker: Gianpaolo Callioni, Director, Strategic Planning and

Modeling, HP Corp.

NETWORK DESIGN IN SUPPLY CHAINS

Objective: We will now develop a framework for facility location decisions that allows for a multi-plant,multi-warehouse network to supply a large and diverse customer base. Our objective will be to optimally

structure the distribution network, taking into account cost and customer service factors. We will then cover

the basics of financial valuation of supply chain decisions. We will conclude the discussion on location

decisions within the supply chain with a case study exploring such decisions in an international setting. We

will develop some notions of the value of flexibility.

Class 8 (October 17, 2002) Prepare:

o Network Design (Chopra and Meindl, Supply Chain Management:

Strategy, Planning and Operations, Chapter 11)o Financial Evaluation of Supply Chain decisions (Chopra and Meindl,

Supply Chain Management: Strategy, Planning and Operations, Chapter

15)

Submission:

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o Case study: Applichem (A)


Submission:

o Homework Problem: Exercises 15.1 and 15.3

OPERATIONAL ISSUES IN SUPPLY CHAINS

Objective: After an introduction of framework on how strategically to think about outsourcing, you willbe asked to provide a recommendation for the selection of a hosting provider.

Read:o Article: Strategic Sourcing: To Make or not to Make, HBR, November-

December, 1992o Article: Turning negotiation into a corporate capability, HBR, 1999

Prepare:o Article: How to think strategically about outsourcing, HBSP, 2002o Exercise: Selecting a hosting provider, HBSP # 601-171

OPERATIONAL ISSUES IN SUPPLY CHAINS

Objective: We will review the reasons for a company to establish a global presence (other than the needto expand). We will answer why is beneficial for a company to have suppliers in multiple countries and

investigate the reasons for different organizational structures, such as centralized vs. decentralized. We

will then discuss the Levi-Strauss case and see how a company maintains its values when contractors

operating within diverse cultures and political systems perform essential manufacturing processes. During

the other half of this class, we will play the Beer Distribution Game to motivate the supply chain dynamics.


Prepare:

o International Issues in Supply Chain Management (Simchi-Levi,Kaminsky, Simchi-Levi,Designing and Managing the Supply Chain,Chapter 7)

o Case Study: Levi Strauss & Co.: Global Sourcing (A), HBSP # 395-127

Download:o The BeerNet Game, http://kaizen.kellogg.nwu.edu/BeerNet/

SUPPLY CHAIN COORDINATION

Objective: Bill Patrizio will speak about the recent successes yielded in Strategic Sourcing and Supply

Chain at The Walt Disney Company. We will then recap the key results of BeerNet and begin to discuss thekey concept of supply chain coordination. In the class, until now, we have developed the building blocks of

supply chain performance. Synchronization of supply chain performance is, however, critical to leverage

the drivers effectively. We will use the Barilla, SpA case to discuss dynamics in a more complex supply

chain and explore some coordination mechanisms. We will conclude this module with a session on how to

develop incentives for coordination.

Class 11 (November 7, 2002)

Guest Speaker: Bill Patrizio, SVP Strategic Sourcing, The Walt Disney Company

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Prepare:

o Coordinating a Supply Chain (Chopra and Meindl, Supply ChainManagement: Strategy, Planning and Operations, Chapter 13)

o Kellogg note on Vendor Managed Inventories

Submission:

o Case Study: Barilla, SpA (A) (HBS Case 9-694-046)

Objective: We will continue our discussion of supply chain coordination and focus on the role ofincentives.


Prepare:o Article: Aligning Incentives for Supply Chain Efficiency, HBSP # 600-

110

INFORMATION TECHNOLOGY AND E-BUSINESS IN SUPPLY CHAINSObjective: Introduction and Overview of the role that both IT and e-business play in supply chainmanagement. Pete Meindl will talk about how software is helping companies enhancing supply chain

performance.

Prepare:o Information Technology in Supply Chain (Chopra and Meindl, Supply

Chain Management: Strategy, Planning and Operations, Chapter 12)

Guest Speaker: Peter Meindl, Stanford University


Prepare:

o Case Study: i2 Technologies, Inc. (HBS 9-699-042)o E-business and the Supply Chain (Chopra and Meindl, Supply Chain

Management: Strategy, Planning and Operations, Chapter 14)

Additional:

o Kellogg note on Third Party Logisticso Article: Note on Logistics in the Information Ageo Article: Aligning Supply Chain Strategies with Product Uncertainties, Hau

Lee, CMR 230 [This is not included in your reader]

Video: Supply Chain Management in the Internet Age by Hau Lee of Stanford

University

VIRTUAL INTEGRATION IN SUPPLY CHAINS

Objective: We will study the Ford Motor Company case to see if the Dell structure is appropriate forFord and identify reasons why it may or may not be so.

Class 14 (December 5, 2002)

Prepare:

SUPPLY CHAIN COORDINATION: INCENTIVES

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o The Power of Virtual Integration, An Interview with Dell ComputersMichael Dell

Submission:o Case Study: Ford Motor Co.: Supply Chain Strategy HBSP # 699-198

WRAP UPObjective: Each team will present the findings of its project.

Class 15 (December 12, 2002)

Submission:o Project Presentations

Final Exam (December 19, 2002)

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Below, I have listed the required readings and the submission of the homework exercisesand of the case study write-ups. Please refer to the Glossary below for a definition of

Read, Prepare, and Submission.

Class Date Read/Prepare Submission

1 Aug. 29

Read: Chapters 1 3 in C&M Prepare: Seven Eleven Japan

2 Sep. 5 Prepare: Chapter 4 - 6 in C&M Halloran Metals

3 Sep. 12 Prepare: Chapter 7, 8 in C&M (Computer

Required in class)

Mintendo Game Girl

4 Sep. 19 Prepare: Mass Customization at HP

Prepare: Teaching note: Postponement

Prepare:HP DeskJet Printer Supply Chain

ALKO Incorporated

Exercises: 7.1-7.3

5 Sep. 26 Prepare: Chapter 9 in C&M (Computer Required

in class)

Project proposals

6 Oct. 3 Prepare: Chapter 10 in C&M (Computer

Required in class)

Sport Obermeyer

7 Oct. 10

Prepare: Merloni Elettrodomestici (ComputerRequired in class) Merloni Elettrodomestici

8 Oct. 17 Prepare: Chapter 11, 15 in C&M (Computer

Required in class)

Applichem (A)

9 Oct. 24 Read: Strategic Sourcing: To make or not to

make

Read: Turning negotiation into a corporate

capability

Prepare: How to think strategically about

outsourcing

Prepare:Exercise: Selecting a hosting provider

Exercises: 15.1, 15.3

10 Oct. 31 Prepare: International Issues in Supply Chain

Management

Prepare: Levi Strauss: Global Sourcing

11 Nov. 7 Prepare: Chapter 13 in C&M (Computer

Required in class)

Prepare: Teaching Note: VMI

Bari lla

12 Nov. 14 Prepare: Aligning incentives for supply chain

efficiency

Prepare: Chapter 12 in C&M

13 Nov. 21 Prepare: Chapter 14 in C&M

Prepare:I2 Technologies

14 Dec. 5 Prepare: The power of virtual integration Ford Motor

15 Dec. 12 Project Presentations Project Report

16 Dec. 19 FINAL EXAM

Abbreviations:

C&M: Chopra and Meindl, Supply Chain Management: Strategy, Planning and

Operations

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Guest Speakers (To be completed)

Gianpaolo Callioni is the Director of Strategic Planning and Modeling (SPaM) at

Hewlett-Packard. His organization improves the quality of HPs strategic decisionmaking through the use of quantitative modeling and analysis in areas including supply

chain management, forecasting, planning, risk management, warranty and product design.

The team has proven its value over time, catalyzing significant savings and breakthroughsin business processes and methodologies over the last decade. He holds a B.S. in

Business Administration and Economics from Bocconi University, Milan, Italy.

Gianpaolo will discuss some of the most recent trends in supply chain management at

HP.

Bill Patrizio is Senior Vice-President of Strategic Sourcing and Procurement at The Walt

Disney Company. Bill has worldwide responsibility for strategic sourcing, procurementand supply management across the Company. He leads the Company in establishing and

executing procurement and supply strategies that maximize value through association

with high quality, low cost supply partners and by leveraging the Companys position inthe marketplace. He leads and supports the Company-wide efforts to improve supply

chain performance, visibility and total cost. His team will develop procurementtechnology solutions that improve productivity and generate efficiencies and will take a

leadership role in evaluating outsourcing opportunities across the company. Prior tojoining The Walt Disney Company, Bill was senior vice president and general managerof Chromium Graphics, Inc., and vice president, reengineering and change management,

at Universal Studios. Prior to joining Universal Studios, Bill was an executive withJoseph Seagrams & Sons in New York where he held a variety of marketing and sales

management positions, including vice president of marketing and vice president of sales.He also participated in Seagrams worldwide reengineering effort. He began his career

with the Kellogg Company in sales and account management. Bill received an M.B.A.and a B.B.A. from Iona College in New Rochelle, New York.

Bill will talk about the Supply Chain and Procurement challenges faced by Entertainment

businesses at The Walt Disney Company focusing in particular on the Theme and Parksas well as on the Studios segment.

Peter Meindl focuses on supply chain management and the enterprise software industry.He is currently pursuing his Ph.D. in Operations, Information, and Technology at

Stanford University. Previously, he was Director of Corporate Strategy for i2Technologies, a supply chain software company, and spent 5 years as a strategy

consultant with the Boston Consulting Group and Mercer Management Consulting. He isthe co-author with Sunil Chopra of the book Supply Chain Management: Strategy,Planning, and Operation. Peter holds an MBA from the Kellogg School at Northwestern

University and an MS in Operations Research, a BS in Industrial Engineering, and a BAin Political Science from Stanford University.

Peter will talk about the most recent trends in supply chain software and e-business.

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Project Guidelines

This is a project that can be done individually or in groups (It would be best to use thesame groups that you are using for class assignments. However this is not a requirement).

There are three possible outcomes from a project report, as follows:

The analysis of an existing logistics process and the suggestion for any

improvements that need to be made. Examples include a study of the distributionsystem and store deliveries at Home Depot, design of a logistics system for a

manufacturer of DVDs, and an analysis of intermodal movement for a railroad.

The study of logistics practices in industry from the point of describing risks, benefits,

best practices along with industry examples of each.

The identification of a business opportunity (for example selling furniture on line)

involving a product and build a business plan with a focus on supply chain issues. Thegoal is to identify the business opportunity and design the ideal supply chain for it. Theproject should include implementation details.

My expected outline for the three types of projects are discussed below:

The analysis of an existing logistics process and suggestions for improvementshould not be a detailed description of everything you have done but a specific set

of observations and recommendations. It should begin with an executivesummary no longer than 250 words. All details are to be put in an appendix in theform of exhibits, tables, etc. The general guidelines for the project are as follows:

1. Executive summary.

2. Define the process and the context (business unit) in which it operates.3. What is the strategy / market of the business unit?

4. What does this imply in terms of the logistics process you are studying?What must this process be able to do particularly well in terms of cost, time,quality, and flexibility? The headings mentioned here are broad. You are

expected to identify specific dimensions along which the process is expectedto do particularly well.

5. Describe the current process structure in terms of information, inventory,

transportation, and location.6. Discuss the process capabilities, given the current structure, in terms of the

specific dimensions identified by you in 4.7. Discuss existing problems and weaknesses in the current process. What

additional capabilities does the process need to develop?

8. How should the process be restructured to develop these capabilities?Discuss why the changes suggested by you will have the desired effect along

the key dimensions identified by you.9. Discuss how the suggested changes should be implemented with a time line.

Explain any resistance you may face in implementing the changes.

Please note that these are general guidelines. I am not looking for a project report

with nine points in the sequence listed above. I have listed the points that I feel are

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important in most reports. Please feel free to add to or alter the above list as best fitsyour project.

The study of logistics practices in industry. The objective here is to study

logistics practices in industry such as:

E-commerce and its impact on logistics and supply chain in an industry orcompany

EDI Systems including other supporting systems that it makes possible, e.g.

CAO (computer assisted ordering systems) etc. Coding and Scanning Technologies (Bar coding, SCM, etc.)

Third party logistics Warehouse management systems Warehouse design and management

Please do not restrict yourself to the above list. It is meant simply as a starting

point. In each report I expect the following:

1. A description of the logistical practice including its key elements and its role

in the overall supply chain.2. Major benefits of the practice.

3. Major risks/cost of the practice.4. Key issues in designing and implementing the practice.5. Which companies is this practice ideally suited for? Which companies may

this not be suitable for?6. Examples of companies that are successfully using the practice, including best

practices.

7. Examples of companies that have been unsuccessful in their implementationof the practice and possible reasons.

Once again, please do not feel bound by the above structure. It is simply meant to

help you get started.

The identification of a business opportunity requires building a business plan

with a focus on product. The objective of this report is to identify a businessopportunity involving products where supply chain issues are significant. This

could be done for a particular company or an industry in general. The businessplan should detail the supply chain opportunity and how it will help the businessposition itself strategically. The report should also detail implementation issues.

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Glossary

Read: Means the readings /chapters are required reading for the course.

However, you are not required to read them before class.

Prepare: You are expected to read the material listed under this heading (case /

readings) and come prepared to class for discussion. If it is a case, then read the

case and prepare the questions for discussion. If it is a reading / book chapters,etc., then material in them will be used for class discussion. Furthermore, you maybe asked to post your thoughts on specific questions on the group discussionboard.

Submission: You are expected to prepare the material for submission. Pleasebring your write-up and submit it at the beginning of class.

Download: Download any software (spreadsheets, etc.) to prepare for class /submissions.

Additional: This includes interesting articles, cases or links to relevant web sites,and software for downloads. This material is optional and is not required to

complete this course. However, they do enhance your understanding of the

material in class.

Documents

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