CASE WESTERN RESERVE UNIVERSITY Weatherhead School of Management
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1 Inventory Strategy Forecasting Inventory decisions Purchasing and supply scheduling decisions Storage fundamentals Storage decisions Transport Strategy Transport fundamentals Transport decisions Customer service goals The product Logistics service Ord. proc. & info. sys. Location Strategy Location decisions The network planning process PLANNING ORGANIZING CONTROLLING Interfunctional coordination SUPPLY CHAIN MANAGEMENT Activity and process administration Interorganizat i onal coordination CASE WESTERN RESERVE UNIVERSITY Weatherhead School of Management OPMT/MKMR 475 Supply Chain Logistics Prof. Ballou Thurs 6:30-9:00 p.m. Fall 2006 Text: Ronald H. Ballou, Business Logistics/Supply Chain Management, 5th ed. (Upper Saddle River, NJ: Prentice- Hall, Inc., 2004) Tentative schedule Session Date Topic Preparation 1 F- F* 8/31 Introduction -Definition, scope and importance of logistics/supply chain management -Mission -Relationship to operations and marketing -Cost to the firm -Process view of the supply chain -Key activities -Genesis of logistics thought Read: Chap. 1 & Future of SCM article Case study: Roscoe Corp. (Prepare for in-class discussion) 2 R** 9/07 Logistics Strategy and Planning -Corporate strategy -Logistics strategy -Strategic, tactical, & operational planning -Major planning areas -When to plan -Guidelines for strategy formulation -ROLA Read: Chap. 2; Contingency Planning article Prob. Set #1: 1-12; 2-2,7,9 (Submit 9/14) Handout: Learning by the case method *F-F = face-to-face, on-site session **R = remote, off-site session 1
2 Session Date Topic Preparation Block #1 Customer Service Goals 3 F-F 9/14 The Product, Customer Service, and Information Technology -Product characteristics and logistics system design -Logistics costs in pricing structures -Role of packaging in system design -Determining the sales-service function -Setting service levels -The product life cycle and the curve -Information systems in logistics Read: Chap. 3, 4, & 5 Prob. Set #2: 3-3,11,14; 4-6,8,10 (Submit 9/21) Presentation #1: United Grocery Co. case study Block #2 Transport Strategy 4 R 9/21 Transportation Fundamentals -Transport and service offerings -Performance characteristics -Legal status of transport regulation -Mode performance and relative costs -Transport rate profiles by volume and distance 5 F-F 9/28 Transportation Decisions -Overview of transport decisions -Transport service selection -Carrier routing -Logical methods for dispatching -Large-scale methods for vehicle scheduling 6 R 10/05 Transportation Decisions -Shipment consolidation -Order entry and inventory control -Order processing priorities and customer service Read: Chap. 6 Prob. Set #3: 6-9,10,16,21 (Submit 9/18) Read: Chap. 7 Case study: MetroHealth Medical Center (Read for in-class discussion) Prob. Set #4: 7-4,5,6 and Orion Foods (Submit 10/05) Presentation #2: Rossco, Inc. case study Read: Chap. 11, read for background 7 F-F 10/12 REVIEW & MIDTERM EXAMINATION 2
3 Session Date Topic Preparation Block #3 Inventory Strategy 8 R 10/19 Storage and Handling Decisions -Site selection -Sizing the facility -Facility configuration -Space layout -Product layout -Dock design -Setting productivity standards Read: Chap. 12 Prob. Set #5: 7-3,8; 12-9 (Submit 10/26) Inventory Management -Inventory-to-sales relationship -Distribution requirements planning -Turnover ratio -ABC classification by item and by location 9 F-F 10/26 Inventory Management -Push vs. pull concepts -Cycle stock and safety stock -General pull methods -Square-root law -Inventory-throughput curve Block #4 Location Strategy 10 R 11/02 Facility Location -Plant vs. warehouse location -Relevant costs and their nature -Center of gravity approach 11 F-F 11/09 Facility Location -Algorithmic approaches -Mixed integer programming -Simulation -Heuristic methods -Dynamic location analysis 12 R 11/16 Facility Location -Uniqueness of retail location problem -Weighted checklist -Modified gravity model -Regression analysis 13 F-F 11/23 Thanksgiving Holiday 14 R 11/30 The Network Planning Process -The network planning problem -Data for network planning -Tools for analysis -Conducting the analysis -Channel simulation Read: Chap 10, pp ; Chap 12, pp ; Estimating and Auditing Inventory article; Expressing Inventory Control Policy in a Turnover Curve article Read: Chap. 9, pp Prob. Set #6: 9-25 and American Lighting Products Presentation #3: Information Technology status report Read: Chap. 13, pp Prob. Set #7: 9-20, 27 (Submit 11/09) Read: Chap. 13, pp Prob. Set #8: 13-1, 2 and Ohio Auto & Driver's License Bureaus (Submit 11/16) Presentation #4: Polaroid case study Read: Chap. 13, pp ; Revenue article Prob. Set #9: 13-9,10,12 (Submit 11/30) Read: Chap. 14 Prob. Set #10: 14-5,6,9,11 (Submit 12/07) 3
4 15 F-F 12/07 Summary and Review -Work selected homework problems -Summarize course -Course evaluation Presentation #5: Collaborative Logistics status report Usemore Soap Co. exercise is due Report F-F 12/12 FINAL EXAMINATION Tuesday 12/12 or as arranged Objectives of the Course The course will attempt to achieve two objectives: (1) to develop your skills in solving specific types of logistics/supply chain problems, and (2) to improve your capabilities to deal with unstructured problems of the type encountered by intermediate and top managers. Skill development is accomplished through lecturers, case studies, homework, and examinations. These skills are valuable for addressing specific problems where given technology is useful in treating them. On the other hand, broader analytical skills are enhanced using case studies and class discussion, which allow problem solving to be placed in a larger context. Defining a framework for analysis, applying concepts and principles, and commenting on the analysis of others help to achieve the second objective. Of course, these objectives interplay throughout the course of study. Course Policies Fuve cases studies and status reports will be assigned throughout the course. Your group will present your analysis to the class for one of these cases or status reports. A write up of the analysis by your group is to be handed in for grading. Other groups not presenting will be expected to have also prepared and analyzed the case study, and may be called upon in class to challenge the analysis of the presenting group. However, these secondary case analyses will not be required to be handed in. For the status reports, the non-presenting class members will be expected to actively participate in the discussion. All study group reports are to not exceed 10 double-spaced typewritten pages in 12-point font, less appendix materials. Homework problems are to be submitted on the date indicated. They will be reviewed to see if you have tried to solve them. Since the problem answers will be handed out in class or posted on Blackboard at the time the problems are submitted, they will not be graded. You are to compare your answers with those provided. You should seek help if additional instruction is needed. The submitted homework will be scanned to see if a reasonable attempt has been made at analysis and a checkmark placed in the grade book for a good effort. The purpose of the homework is to provide extra practice in applying the concepts presented in the textbook and discussed in class, and will help to identify those areas needing additional explanation. You may work these problems with your study group or any others in the class. However, you are to submit your own answers As a general exercise on supply chain network design, the Usemore Soap Company case study (in textbook) is assigned to each study group. The case primarily will be graded based achieving the best balance of costs and customer service issues. A short report is to be prepared answering the questions posed in the case, but also attention should be given to an implementation strategy. Where study team designs are similar, the quality of the arguments favoring a particular solution will be determining. Re-grading of homework, case studies, status reports, and examinations will only be considered under exceptional circumstances such as the scores are added incorrectly, an oversight of an important fact, etc. Judgment calls, to some extent, are based on the relative ranking of the work within the class. Should any paper be resubmitted, it must be accompanied by a written statement of the issue to be reconsidered. Academic integrity All students in this course are expected to adhere to university standards of academic integrity. Cheating, plagiarism, and other forms of academic dishonesty will not be tolerated in this course. This includes, but is not limited to, consulting with another person during an exam, turning in written work that was prepared by someone other than you, and making minor modifications to the work of someone else and turning it in as your own. Ignorance will not be permitted as an excuse. If you are not sure whether something you plan to submit would be considered either cheating or plagiarism, it is your responsibility to ask for clarification. When your name appears 4
5 on a group product for a class, you are responsible for the integrity of the work, even if you did not personally write the offending material. Either ask me about it or consult credible sources of information on the subject. Two useful internet sites are and Please remember that you have agreed to Standards Regarding Academic Integrity (a copy of which can be found at which outlines your responsibility in greater detail. Grading Your course grade will be determined from the following weights. Attendance, homework, and class 10% participation Case study or status report 20 Usemore exercise 20 Midterm exam 25 Final exam % Blackboard-Posted Materials Checklist 1. Learning by the case method 2. Roscoe Corp. 3. United Grocery Co. 4. Rossco, Inc. 5. Polaroid Corporation 6. Future of SCM article 7. Inventory article Instructor Availability My office is PBLB 332, where I am available before class and by appointment. Since many questions can be answered by telephone or by , I may be reached at (216) (office) or (440) (home). E- mail: Ronald.Ballou@CASE.edu. Guideline Study Questions for the Case Studies and Status Reports These are guideline questions and you are not bound by them. 1. Roscoe Corp. a. What questions should Smith pose to his Staff Assistant to provide further information on which to base a decision? b. As Smith's Staff Assistant, based on information presented in the case, would you recommend the use of the new rate? Why? 2. United Grocery Co. Consider the questions at the end of case. 3. Rossco, Inc. 5
6 a. Is Rossco's strategy sound? b. Is Rossco a sound business? c. What should Dan Rose do about the price war? d. If this threat is surmounted, what avenues of expansion look most promising for Rossco? 4. Polaroid Corporation: European Distribution System a. How do Polaroid s distribution needs vary by subsidiary in Europe? What are the implications of these differences? b. Should Polaroid implement a direct distribution strategy in Europe? If not, what alternative do you recommend? c. How should your recommendation be implemented? What implementation challenges do you foresee? How would you address those challenges? d. What other changes do you recommend Polaroid make to its European logistics system? 5. Information Technology to Facilitate Logistics/Supply Chain Decision Making and Operation Information technology has exploded and is affecting many aspects of the way logistics and the supply chain are managed and will be managed. Information technology is changing the way logistics operations are conducted as well as the way logistics systems are planned. In this report, you may want to consider RFID, TMS (Transport Management Systems), WMS (Warehouse Management Systems), OMS (Order Management Systems) as the type of information technology that is impacting logistics planning and operations. Is information technology a key to collaborative planning? To what extent is available information technology being used by companies? Where is it having the greatest impact in logistics? Is it positioned at the operations level or at the strategic planning level? Where specifically and with what types of problems? What areas are likely to benefit most from developing information technology and what information technology needs to be developed to better serve logistics/supply chain managers? 6. Collaborative Logistics with Customers This report is to explore the issues surrounding the emerging opportunities in logistics associated with managing the supply chain across functional boundaries. Collaboration among supply channel members is at the heart of this new type of management. The focus should be on collaboration with customers rather than with suppliers. Critical questions to address include: What current levels of collaboration are taking place among participants (customers) in today s supply chains? What are the benefits financial, operational, customer service, and others that can be achieved with collaboration that are not now being realized? What factors must be in place to form true collaboration with supply chain partners? What are the common problems that impede the achievement of supply chain collaboration? What steps can a company take to achieve supply chain collaboration? What metrics are needed? Focus the report on collaboration among multiple and independent enterprise members of a supply channel, especially customers. Note: Status reports should survey at least 20 articles/reports from the academic, trade press, and reports available on web sites and other venues. 6
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