Post on 19-Jan-2023
Contents
Introduction.................................................1
Successes within the Simulation Game for Team 3..............1
Failures within the Simulation Game for Team 3...............2
Supply Chain Strategies......................................3
Lean Approach...............................................4
Agile Approach..............................................5
Leagility Approach..........................................5
Supply Chain Management Issues...............................6
Relationships...............................................6
Integration and Risk........................................7
Recommendations..............................................9
Conclusion..................................................10
Appendices..................................................11
References..................................................14
1
Introduction
The Supply Chain Simulation Game involved teams referred to as
‘small companies’ making simple paper-based greeting cards
based on orders from the market-place, represented by the
‘order board’. Orders were placed on the white boards and each
team had to select orders that they felt were manageable. The
cards had specific requirements in terms of quality, speed and
dependability and only cards that met the standard
requirements were purchased by the market.
Team 3 began with a ‘Plan of Action’, allocating each team
member with a specific role in 4 different functions:
sales/marketing, stock control, production control and
accounting. The group soon realised the work flow was so fast
and due to the pressure of time constraints, the team had to
re-consider their strategy to enable them to achieve success.
This report aims to analyse Team 3’s performance in relation
to Supply Chain Management issues and recommendations will
derive from the analysis.
Successes within the Simulation Game for Team 3
“Long term relationships between customers and suppliers are being built based on
cost, trust, innovation, quality, and flexibility, and teams are an excellent vehicle to
build these relationships.”
(Rooney, J, The Journal For Quality and Participation, 2002)
2
One of the main successes team three had achieved was
discovering if a process of production was slowly derailing,
team three quick action was taken to establish the executive
decision to cancel an order and incur a penalty. An important
method within organisation is communication and team three
were able to establish when they needed help. (Naylor, J,
1996)
Re-evaluating the stock situation, was left in the hands of
the stock control team, however team three was extremely vocal
and quick to help a team member out. Thus they alerted the
stock control team to place orders of new tools and equipment
and this allowed production success to increase and flourish.
At the beginning of the game the team ensured they had at
least 12 of each paper and continued to replenish stock, this
strategy changed towards the end.
Team three’s relationship with the supplier improved
throughout the day. At the start of the game the group were
required to wait at least ten minutes for supplies to be
ready. However, by three o’clock in the afternoon team three
was first to have their supplies ready and prompt. The group
was then able to react quickly to customer demand by quickly
ordering and receiving the paper required to make the chosen
order. Relationship marketing’s strongest driver is retaining
the loyal customer and supplier bond. (Blythe, J, 2009)
Having struggled within the first half of the game, team three
really began on a strong stride within the second half of the
game having a full order of cards accepted and incurring the
3
first sale. This was down to spreading the production of the
cards over four people instead of two. Thus the main successes
derived from having a break to re-strategize and work out how
team three could improve upon the original mistakes.
Failures within the Simulation Game for Team 3
Unfortunately, although team three came into their own in the
second half of the game there were costly errors and mistakes
made throughout the game that incurred penalties against them.
Team threes first mistake was reading the instructions of the
game incorrectly. The instructions stated that any order that
was late would not be accepted at all and would incur a 20%
penalty against the team’s profits. However, the team was
under the impression that they would only sustain the penalty
but still have their order accepted.
The second failure team three became aware was under thinking
the pressure within the lead times. A twenty minute lead time
with twelve cards to create, having only two people on
production, with limited tools was impossible. The verse on
the inside of the card was to be measured and placed within in
particular specifications, and team three skipped this step
completely. Thus many of the first attempts were rejected by
the control team as they did not meet requirements.
At this point team three seemed to all become rather stressed
having had no orders accepted, and the two members on
production began delegating out jobs to the rest of the team
to involve them in the card making process. At the start of
4
the simulation game, the decision was made that team three
would all take leadership of their own posts and not have one
particular project manager. Thus, important management
decisions took longer. Having many leaders rather than one
person in charge was a major downfall in the team’s
simulation. Common features of organisation include common
goals and shared skills; this was evident through team threes
approach but one of the main focal points, i.e. Hierarchy, was
forgotten about consequently causing problems along the line.
(Naylor, J, 1996)
The quality of the cards fell quite dramatically towards the
end of the game. This is reflected in the timeline below:
15:16 - 6 out of 8 accepted
15:45 – 5 out of 8 accepted
15:56 – 7 out of 12 accepted
16:13 – 12 out of 12 accepted
16:36 – 3 out of 12 accepted
16:55 – 3 out of 12 accepted
The last failure team three incurred was essentially ruining
their leftover inventory. All the leftover paper the team had
not used was folded in preparation and the rubber was tore in
half so more than one person could be using it and any given
time. Therefore, attempting to help the team further along the
line, team three shot themselves in the foot as they received
no money back for the surplus of inventory. Inventory
management is vital to any organisation as it affects the
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customer and the business at the end of the day. (Greasley, A,
2009)
Supply Chain Strategies
Managing supply chains effectively is a challenging task due
to the current business trends of expanding productivity and
short product life cycles. A company’s strategy is therefore
of critical importance as it involves planning and configuring
the organisation for the future. (Mangan, 2012) Although the
field of business strategy is very broad, this section will
focus on Lean and Agile supply chain strategies and evaluate
which approach Team 3 adopted.
Lean Approach
The lean approach focuses on eliminating waste and improving
the flow of information and material. ‘Waste’ can take many
forms, (Womack and Jones, 1996) identified the seven deadliest
waste as: overproduction, waiting, transportation, processing,
inventory, motion and defects. The idea in creating a flow in
lean is to deliver products and services in the right amounts,
at the right quality levels at the right time. (Cudney &
Elrod, 2011) Companies that operate in Lean have many
advantages over traditional supply chain management,
including:
Supply more tightly linked with demand
Lower inventory risk
6
Processes that focus specifically on activities that add
value for the customer
A greater focus on mistake-proof processes (Hatton,
2013)
Applying this to Team 3’s performance, as stated in the
previous section, resources were not used to their full
potential in the first half of the game. However, in
recognising this error, the 2nd half of the game proved to be
more productive. All team members realised that if they wanted
to achieve results then ‘Lean Thinking’ had to be adopted by
the entire group by doing only the things that add customer
value and eliminated the activities that don’t. In practise,
at the beginning of the simulation game, each team member
specifically focused on their individual role which left only
two members producing the cards. This resulted in ‘waiting’,
‘processing’ and ‘motion’, problems as previously described.
The team soon adopted a ‘Lean’ mind-set by purchasing only the
materials they needed to allow all team members productive so
there was a continuous flow to the customer, which refers to
(Cudney & Elrod, 2011) idea’s. The team planned and executed
there strategy throughout the day, sometimes not always
succeeding as previously mentioned. However, adopting the
‘lean way of thinking’ proved to be successful as the team
managed to get their first order delivered on time and
accepted by the market and they continued to work this way as
it was clear it had positive results.
Agile Approach
7
“The aim of an Agile Strategy is to give a high customer service by responding
quickly to different or changing circumstances” (Waters, 2003)
Companies that adopt an agile supply chain pursue the
flexibility to meet customer demands, focus on customer
satisfaction with a quick reaction time (Waters, 2003). The
fundamental principle of an agile supply chain is primarily
concerned with responsiveness and the ability to match supply
and demand (Mangan, 2012).
Relating this to Team 3’s performance, throughout the entire
game the team were heavily focused on providing a fast
response rate and meeting the market demands. At times the
team tried to be too flexible by taking on more than one order
at a time, but soon realised that this was not manageable with
the materials and resources they had, if they wanted to meet
the standard requirements successfully.
Leagility Approach
According to (Mangan, 2012), there is no one generic supply
chain typology that works in all situations. A combined
approach of lean and agile strategies is known as the
‘Leagile’ approach (sometimes referred to as the ‘hybrid
strategy’), where both agility and leanness demand high levels
of productivity. (Mason-Jones, Naylor &Towill, 2000)
“The leagile supply chain enables the upstream part of the chain to be cost effective
and the downstream part to achieve high levels of service in a volatile marketplace”
(Mason-Jones, Naylor &Towill, 2000)
8
The diagram below describes the concept of the ‘decoupling
point’ where, in a leagile supply chain lean principles apply
upstream to the decoupling point and agile principles apply
downstream beyond the decoupling point.
After analysing both lean and agile supply chain strategies,
it is can be said that overall, Team 3 adopted a ‘leagilty
approach’. In practise: the group were lean in their upstream
activities by adding value to their operations with the use
all of their resources and material to eliminate waste as well
as making sure there was a continuous flow to the customer,
meeting market demands with the right quality, right time and
right place. In Team 3’s downstream activities, in the demand
side, stock control made sure they collaboratively planned
with all functions of the company and co-managed inventory to
meet with the market demands. Team 3 also emphasised the
importance of getting the cards in on time (responsiveness)
again, reflects the characteristics of having an agile supply
chain at the demand side. Applying such Supply Chain
management practises provides companies with a competitive
advantage (Thatte, 2007), thus the leagile approach had a
positive impact on the company as the team scored 2nd out of
Adopted from (Mangan, 2012)
9
the 4 teams. A good result - improvements could have been made
which are referred to in ‘Recommendations’. However, a
combination of a ‘lean’ and ‘agile’ approach is definitely a
winning combination in Supply Chain Management, evident in
Team 3’s performance, especially in the 2nd half of their
operations.
Supply Chain Management Issues
Relationships
It is clear that strong internal and external relationships
were a key factor in team 3’s success. Good relationships
within the group allowed us to avoid conflict and work
together as a team to make the correct decisions such as
identifying when more materials were required to allow the
group to accept orders.
As the game progressed, the group was also able to build
strong relationships with our supplier which resulted in
increased flexibility as we were able to order more material
at short notice. According to Harland, management of buyer-
supplier relationships is central to the success of the supply
chain management in firms (Harold, 1996, in Ambrose et el.,
2010). Lead times for the material were also reduced as a
result of having a strong relationship with our supplier.
These strong relationships meant that our team high levels of
integration across different functions in the group such as
accounts, production, sales and procurement.
10
Integration and Risk
Integration is an important part of Supply Chain Management as
stated by Chen (2009) and refers to “linking major business
functions and business processes within and across companies
into a cohesive and high performance business model” (Chen,
2009, p27). Wisner also states that in order to create value
for the services and products provided to customers, a company
needs to integrate their internal process activities (Wisner,
2012). Moreover, the higher the level of integration with
suppliers and customers in supply chain the greater the
benefit, as present in the Arcs of Integration (See the
appendix 1)
In the game, Team 3 could not move further upstream or
downstream so external integration was not possible. However,
as discussed, by improving the relationship between our group
and the supplier in the second half of the game, our team
benefited from increased flexibility when ordering material,
which gave us a competitive advantage. This helped to improve
efficiency by reducing the process time. “Along with benefits,
integration activities also involve costs” (SCHOENHERR, T., &
SWINK, M., 2012, p100). In the first half of the game, the
team lost potential sales when a contract was rejected due
topoor communication between team members which resulted in
errors.The team was also unable to complete orders on time due
to a lack of organisation, although this did improve as the
game progressed and integration improved.During the first part
of the game, Team 3 operation failed in the supply chain
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integration dimension: “information integration” which is
shown in the 4 dimension in the appendix 2.
Supply chain risk comes from 5 sources: supply risk, demand
risk, process risk, control risk, and environmental risk. See
the appendix 3. During the game, Team 3 realised that
additional tools were required. Thus the team took a risk and
bought more material such as stencils, rulers, pens, and
pencil. However due to the lack of understanding of the
processes at first, our group were unable to identify the
bottlenecks. Also, the team did not make use of all resources
in the first half of the game. Overall, the lack of understand
and manage the risk profile is directly and indirectly
influenced the strategy and result of the team.
Our group worked as a team to identify that we needed to adapt
and change our strategy. As discussed, by focussing on our
production line and adding more human resource, the group was
able to increase output. We were able to recognise that some
roles within the team, such as accounting, were important
however did not require as much effort as planned. By
identifying this waste in terms of human resource and applying
it to these bottlenecks, the group was able to increase the
quality and speed of production line. In applying this lean
philosophy, there were less defects in production which
resulted in increased efficiency and profitability.
Quality and speed are key factors which contribute to the
overall success of supply chain management and therefore
12
competitive advantage. Mellat-Parast states that
“understanding quality issues at the supply chain is critical
to the success of the firm and supply chain performance,”
(Mellat-Parast, 2012). As previously discussed earlier in the
report, in adding more quality checks to our production line
such as employing team members to measure the card markings,
we were able to increase the quality of our products which
resulted in a higher percentage of orders being accepted.
In applying key Supply Chain Management theories such as
recognising the importance of relationships, quality control
and integration & risk, team 3 created a competitive advantage
by improving efficiencies which resulted in the team coming
2ndin the game with a total profit of £3,839.
Recommendations
A typical downfall in business is to presume that we know
exactly what the customer wants. Whereas, in truth attention
is easily diverted from the reality of the marketplace when
the management is busy with the daily running of a business.
(Christopher, 2005).
It is crucial to establish an understanding of what the
customer wants through detailed research (Christopher, 2005).
Relating to Team 3, they should have made sure instructions
were studied in detail and ensured every team member knew of
specific requirements such as card measurements, no late
orders accepted. For next time, this would ensure a much
stronger position as less time would be wasted.
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In organisations, many crucial decisions are made in product-
planning activities. Production planners discuss and decide
what resources organisations will need to produce their
outputs (Kanet and Sridharan, 1998). Poor methods of
production that are too loose and result in too tight or
unnecessarily large lead times which have consequences of
failure to meet the delivery time (Tenhiälä, 2011). This time
limit affects all operations (Waters, 2003).
The capacity of an operation is its maximum output in a
specified time. The team struggled to meet demand and incurred
penalties for the unfulfilled orders. Not all parts of the
supply chain have the same capacity (Waters, 2003). The bottle
neck in the teams supply chain was production. Production to
start with was limited as there were only 2 people
manufacturing. In order to get more people on production the
team decided to purchase more stock such as pens, pencils,
stencils and rulers, thus substantially increasing output as
it enabled more of team to manufacturer. Capacity planning is
a major area for improvement for Team 3 as it determines how
many cards they can deliver to the customer in a given time
(Water, 2003).
However, even if the team had the resources and capacity to
make the cards there would still be an issue of quality to
deal with. The customer’s quality standards were very high
therefore a lot of the team’s orders were partially or
completely rejected. Only 39.1% of Team 3’s orders were
accepted. With short lead times this is to be expected.
However, upon completion of the simulation Team 3 came to know
14
that the winning team – Team 1- had adopted a clever strategy.
They’re strategy was to look up an order from the board which
they liked but not officially take on the order, they would
then start producing and a while into production would take
the order from the board and get it approved. This innovative
strategy allowed the team extra time to make the cards and
check them over. Therefore, reducing the amount of rejected
orders.
Lastly, appointing an official Project Manager would be a
beneficial decision if the game were to re-run. This person
would be able to oversee the whole operation and would be able
to identify which areas needed to be addressed, therefore
eliminating weaknesses in the team.
Conclusion
In Conclusion, the growing complexity of products and the
globalisation of business has made the Supply Chain Management
process in organisations more complex than ever before.
Informations overload, rising quality levels and complexity
being at the fore front in driving change. Good relationships
both Internal and External need be established as well as
applying a strategy to reduce risks and increase the overall
company performance.Analysis of these Supply Chain Management
Issues in relation to Team 3’s performance has demonstrated
the need to manage supply chains carefully in order to respond
to today’s dynamic markets and increasing customer
requirements.
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21
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