Part One –Group Work (10%)
- a) Show the $ cost for each part of the supply chain and include the weekly record kept during the playing of the game. [5marks]
- b) Comment on what went wrong, and what went right for the whole supply chain represented in the game.[5 marks]
Firstly, the system we applied to the process was out of control, and we unknowingly slid into a push framework. Every part of the supply chain behaved independently and focused distinctly on immediate short term requirements rather than collaborating to comprehend the demand.The information flow from all fragments of the supply chain was not deliberated and put into a planning matrix but reacted to safekeeping.
As the customer demand is unpredictable, production and overstocking were not under control.In the event, the retailer reduces its order; all parts of the supply chain gets affected. The factory reacted immediately to reduce production.The after-effects of immediate reaction surfaced at a later stage of the supply chain, creating an imbalance in the system either over-accumulation of goods or shortage of supply.
Problems increased when the members of the team independently preempted the demand.
We observed two outcomes in the distribution centre,
1.The backlog which was higher than the customer demand.
2.The delays due to non-availability of stock when the demand increased.
At times, we realised the warehouse had stock out of proportion and running out of place.
We are leading to increasing in the cost of additional warehousing.Here we realised the importance of forecasting.Analysig the problems which surfaced, we tried to forecast the demand by observing the overload and the unavailability of goods pattern and tried to work on the goods available at the distribution centre to satisfy the demands, This helped to reduce the backlog and to reduce overstock to a certain extent
In the process, we observed that the production was trying to be safe to supply for the demand. Hence, we started producing and kept the inventory always high, leading to overproduction. In the process cycle, the chain was imbalanced due to at any point of time, one of the areas was under severe pressure due to non-availability of stock. These were the clear signs that the supply chain was not able to envisage the demand and transform into production.
Overall, we observed that information flow and forecasting is the key in the supply chain to strike a balance in all the areas of the cycle.It is important to understand consumer behaviour and demand highs and lows to translate into production.
Part Two–Group Report(30%)
- a) In the case of Coca Cola’s factory, discuss how it can overcome the large variation in weekly demand.[10marks]
-Coca Cola’s inventory network fundamentally has production and bottling capabilities across many countries with a capacity of approximately 742 Production facilities and 650 distribution centres. The thumb rule of coordinated interest and supply works on demand, operations and inventory planning. The market requirement data includes everyday cooperation and coordination of the central planning along with the marketing and sales, while the operation focus on efficiency to service the orders centring around monetary ramifications of resource optimisation. The planning team has detailed information about the inventory and controls the inventory.Information flow of the forecast and demand is upstream and downstream for transparency.
The supplies which are ready to dispatch is waiting for the trigger from the channels backed up with a strong logistics network.The trucks are custom made to coca cola specifications, network ability to adapt and flex for unexpected demands of the market. Coca-cola adopted technology to be highly sensitive to market needs.
The central office had designed the system for real-time response throughout the network including the truck and workload scheduling to the point of sale distribution.Primarily, Coca-cola supply concept is based on customer demand.In the event of an unexpected spike in demand, they are equipped with independently operated distribution centres to handle the situation.
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