Zone of strategic fit in supply chain

Date

Task

1/22/2017

Readings, and started on HW

1/23/2017

Work on HW

1/24/2017

Met with group

1/25/2017

Work on HW

1. Amazon.com

· Define

· Study Amazon’s supply chain

· Plan

· SP 1: Determine Amazon’s supply chain

· SP 2: Determine Amazon’s competitive strategy

· SP 3: Determine Amazon’s responsiveness

· SP 4: Determine how can Amazon expand the scope of strategic fit across the entire supply chain

· Execute

A. What is Amazon.com’s supply chain?

Customer place order online

Amazon warehouse sorts order

Amazon packages and labels order

Delivery company process the package

B. How would you characterize the competitive strategy of Amazon.com? What are the key customer needs that Amazon aims to fill? Where would you place the demand faced by Amazon on the implied demand uncertainty spectrum? Why?

Cost effective

Differentiated

Focus

Amazon

Key customer needs:

-Fast delivery

-Package undamaged

-Privacy of order detail

-Variety of product

-Prime service

Implied demand uncertainty spectrum

Predictable

Somewhat predictable/unpredictable

Unpredictable

Amazon has a enormous customer base and very good understanding its customers needs and behaviors. And through years of operation, Amazon understands the market trends and the demand of its products.

C. What level of responsiveness would be most appropriate for Amazon’s supply chain? What should this supply chain be able to do particularly well? (Visit the amazon web-site and perform “experiments” when solving this problem.)

Supply chain responsiveness takes many forms, including the ability to respond to a wide range of quantities, meet short lead times, handle a large variety of products, build innovative products, meet a high service level, and handle supply uncertainty. Amazon’s supply chain must be highly responsive in the areas of handling orders, customer response, and service level.

D. How can Amazon expand the scope of strategic fit across the entire supply chain?

Responsiveness

Low

High

IDU

High

By adopting an intercompany interfunctional scope strategy, Amazon will maximize supply chain surplus. Rather than viewing the supply chain as a zero-sum game of inventory cost minimization and profit maximization, Amazon should recognize that spreading the wealth and occasionally taking on more inventory than is optimal for them will result in improved customer service.

· Check

I checked my work and made sure all my work makes sense.

· Learn

I learned a lot about Amazon’s supply chain. I realized that Amazon does not follow the normal trend as Amazon has both high responsiveness and low IDU.

2. Toyota: (can be done in collaboration with your project team; also for discussion in class on Tuesday 01/24/2017):

· Define

· Study Toyota’s supply chain

· Plan

· SP 1: Determine Toyota’s supply chain

· SP 2: Determine Toyota’s competitive strategy

· SP 3: Determine Toyota’s responsiveness

· SP 4: Determine how can Toyota expand the scope of strategic fit across the entire supply chain

· SP 5: Determine how can the full set of sex drivers be used to create strategic fit with Toyota’s competitive strategy.

· Execute

A. Answer the same questions posed above, in 1 A-D (above), for Toyota.

SP 1

Vendor:

Local parts/

Import parts

Production

manufacturing

Dealer

Customer

SP 2

Cost effective

Differentiated

Focus

Toyota

Key customer needs:

-Safety

-Fuel efficiency

-Reliability

-Functionality

-Appearance

Implied demand uncertainty spectrum

Predictable

Somewhat predictable/unpredictable

Unpredictable

Toyota

Toyota has been one of the major car manufacturer for a very long time. They have a very clear understanding of the market demand for their vehicle, thereby they have a low implied demand uncertainty.

SP 3

As a car manufacturer, Toyota’s responsiveness level only needs to be on a medium level. As Toyota is not responsible for most of the customer (end user) interaction but rather the dealership. Toyota is responsible dealing with the dealership.

SP 4

Responsiveness

Low

High

IDU

High

Toyota

To expand its strategic fit, Toyota can increase its responsiveness by start interacting with customers themselves. For example, Toyota can start taking custom orders for their car online and have the car built just for them. Toyota can also create a web platform where customers can communicate with the company via the web questions and concerns about their vehicle.

B. How can the full set of six drivers be used to create strategic fit with Toyota’s competitive strategy?

SP 5

The six drivers includes: facilities, inventory, transportation, information, sourcing, and pricing. In order to expand its strategic scope, Toyota can do the followings:

Facilities: Concentrate on product focus to increase responsiveness.

Inventory: Prepare for seasonal inventory as now model cars come out every year.

Transportation: Diversify the transportation method based on customer needs.

Information: Coordinating daily activities related to the functioning of other supply chain drivers.

Sourcing: Select the appropriate suppliers.

Pricing: Setting the right price for the targeting market.

Difficulties includes: increasing variety of products; decreasing product life cycles; increasingly demanding customers; fragmentation of supply chain ownership, and globalization.

· Check

I checked and made sure my work made sense.

· Learn

I learned a lot about Toyota’s supply chain management, and how is their competitive strategy is fitted.

3. Apple

· Define

Learn Apple’s supply chain management strategy

· Plan

· SP 1: Extract key lessons from the article.

· SP 2: Discuss how Apple achieves strategic fit.

· Execute

SP 1: Extract five (5) key lessons from this article, with respect to Apple’s SCM strategy.

· Apple’s development of the laser technology speaks to a massive competitive advantage for Apple.

· Apple has a closed ecosystem where it exerts control over nearly every piece of supply chain management, from design to retail store.

· Operations expertise is as big an asset for Apple as product innovation or marketing. And apple has taken operational excellence to a level never seen before.

· Spending exorbitantly wherever necessary, and reap the benefits from greater volume in the long run - is institutionalized throughout Apple’s supply chain, and begins at the design stage.

· The decision to focus on a few product lines, and to do little in the way of customization, is a huge advantage.

· Apple’s retail stores give it a final operational advantage. Once a product goes on sale, the company can track demand by the store and by the hour, and adjust production forecasts daily.

B. Use these lessons and discuss how Apple achieves strategic fit.

Apple’s biggest competitive advantage is its operation and Apple’s strategy works around its operation in order to achieves its strategic fit. With its closed ecosystem, Apple is able to control every aspects of its supply chain. Apple is willing to spend exorbitantly whatever necessary and reap the benefits from greater volume in the long run.

· Check

I checked that all my work made sense.

· Learn

I learned a lot about Apple’s supply chain management. And what lead them to become the company with the best supply chain.

4. Demand Forecasting for Tahoe Salt: Use Excel to work through the static forecasting for the Tahoe Salt problem (4th Edition, Chapter 7). Your results should match the given solution.

· Define

· Demand forecasting for Tahoe salt

· Plan

· Read 7.7 Forecasting demand at Tahoe Salt

· Follow the step and generate the demand forecasting.

· Execute

· Check

· Learn