Overview
Conduct a case study analysis on the different characteristics of the supply chain strategy of a company you choose from a list of possibilities, and provide that analysis in a Word document of approximately 800–1000 words.
All operational activities begin with an estimate of what customer demands will be. Production schedules, modes of transportation, warehouse space, and other supply chain activities are all dependent on the accuracy of the company’s demand forecasting. The information management system must provide thorough, accurate, and timely information so that supply chain managers can prepare and execute short and long-term plans. Satisfying the customer is the No. 1 challenge for all demand forecasters.
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
• Competency 1: Design a supply chain to support an organizational strategy.
o Describe an organization’s business model.
o Explain an organization’s supply chain strategy.
• Competency 2: Improve efficiency in the supply chain.
o Analyze the global challenges that an organization faces in its supply chain.
o Explain the importance of aggregate planning to an organization’s supply chain and its partners.
o Describe the role demand forecasting plays in an organization’s supply chain strategy.
o Explain how pricing promotions are used to change demand.
• Competency 4: Communicate in a professional manner that is consistent with the expectations for supply chain managers and participants.
o Exhibit proficiency in writing, critical thinking, and academic integrity by appropriately attributing sources.
Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.
• For the following questions, refer to Fujitsu Limited’s case study, “Sony Marketing (Japan) Inc. Customer Success,” listed in the Resources.
o What is the role that demand forecasting plays in Sony’s supply chain strategy?
o What factors make a demand forecasting strategy necessary, and how is Sony able to be more responsive to its customers due to this SCM strategy?
• For the following questions, refer to Hitachi Consulting’s article, “Six Key Trends Changing Supply Chain Management Today: Choosing the Optimal Strategy for Your Business,” listed in the Resources.
o From your perspective, what are the two most important trends from the list of six?
o Why do you feel it has the most impact on supply chain management today?
o What is a real-life example of a company that has been impacted by each of the two trends that you have selected?
Assessment Instructions
For this assessment, consider that you work for a company that develops and sells case studies and case study analyses. Your company’s primary customers are colleges and universities wanting to use them within their courses, but your company also has customers using them for management training and development. Your manager asked you to conduct research and develop a case study analysis. She’s specifically interested in you doing the analysis on one of the companies from this list:
• L. L. Bean.
• Amazon.com.
• Starbucks.
• Intel.
• Johnson and Johnson.
Research and write about the company that you have selected from the above list.
You and your manager discussed the high-level outline of your analysis and agreed you should address the following items. As the basis for your research, you can use any of the resources noted in this course, in the library, and on the Internet:
• Describe the organization’s business model (particularly related to their supply chain strategy) and provide a diagram or visual to explicitly describe that same business model.
• Compare and contrast the organization’s supply chain strategy with another organization’s strategy.
• Analyze the global challenges the organization faces in its supply chain and discuss strategies to minimize the challenges.
• Explain and validate the importance of aggregate planning to the organization’s supply chain and its partners.
• Analyze the role demand forecasting plays in the organization’s supply chain strategy.
• Analyze how pricing promotions are used to change demand.
Based on the intended audience, your report should be well organized and written in clear, succinct language. Target 800–1000 words. Attributing sources in your professional and academic work supports your analysis and conclusions and demonstrates ethical behavior and academic honesty. Following APA rules for attributing sources provides consistency and ensures that readers can locate original sources if desired.
Academic Integrity and APA Formatting
As a reminder related to using APA rules to ensure academic honesty:
1. When using a direct quote (using exact or nearly exact wording), you must enclose the quoted wording in quotation marks, immediately followed by an in-text citation. The source must then be listed in your references page.
2. When paraphrasing (using your own words to describe a non-original idea), the paraphrased idea must be immediately followed by an in-text citation and the source must be listed in your references page.
Suggested Resources:
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. You may use any scholarly source (3 sources min)
Library Resources
The following e-books or articles:
• Blanchard, D. (2010). Supply chain management best practices (2nd ed.). Hoboken, NJ: Wiley.
• Drake, M. (2011). Global supply chain management. New York, NY: Business Expert Press.
• Greeff, G., & Ghoshal, R. (2004). Practical e-manufacturing and supply chain management. Oxford, England: Newnes.
• Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume I. Mumbai, India: Himalaya Books Pvt.
• Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume II. Mumbai, India: Himalaya Books Pvt.
• Farooqui, S. U. (2010). Encyclopedia of supply chain management: Volume III. Mumbai, India: Himalaya Books Pvt.
Course Library Guide
You are encouraged to refer to the resources in the BUS-FP3022 – Fundamentals of Supply Chain Management library guide to help direct your research.
Internet Resources
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication.
• Fujitsu Limited. (2004). Sony marketing (Japan) inc. customer success. Fujitsu. Retrieved from http://www.fujitsu.com/downloads/PRMPWR/casestudy/casestudy-20051207.pdf
• Hitachi Consulting. (2009). Six key trends changing supply chain management today: Choosing the optimal strategy for your business. Hitachi Consulting Corporation. Retrieved from http://www.enterrasolutions.com/media/docs/2012/10/WP_SCMTrends.pdf
• Sustainable Supply Chain Foundation. (n.d.). Retrieved from http://www.sustainable-scf.org/
Bookstore Resources
The resources listed below are relevant to the topics and assessments in this course and are not required.
• Chopra, S. (2019). Supply chain management: Strategy, planning and operation (7th ed.). Boston, MA: Pearson.
SCM Case Study Analysis: Forecasting and Planning: Amazon
Estimating customer demands acts as the core aspect of business prosperity. Organizational business models must align their supply chains to meet customer demands. Organizations such as Amazon must evaluate their supply chains to identify opportunities and risks. However, they should emphasize the relationship between their business model and the supply chain, global supply chain challenges, aggregate planning, demand forecasting, and price promotions impact on the overall process.
Business Model
Amazon’s supply chain business model requires suppliers to observe two critical models to engage with the company successfully. The supply chain divides into two separate components, including Fulfilment by Amazon (FBA) and the sell using your fulfillment (FBM) (Johnson, 2019). Amazon’s suppliers usually use the FBA supply chain strategy. The chain focuses on four main aspects: warehousing, delivery, technology, and manufacturing (Johnson, 2019). The four elements determine the supply cycle and define Amazon’s interaction with suppliers using the FBA model. The FBA model divides into six necessary steps, and each step must succeed before the chain moves to the next. According to Johnson (2019), the six basic FBA steps include sending inventory, receiving and storing, customer product ordering, picking, packing and shipping, customer service, and customer returns. The sending inventory process entails quantity guidance, partnered carriers, materials preparation for storage, and premium placement, while receiving and storing covers inventory placement, service preparation, and label services. Customer product ordering includes offer eligibility consideration and free shipping. Picking, packing, and shipping focus on fulfillment resources while customer service covers inquiry services. The last stage, customer returns, deals with return inquiries and processing fee issues for chosen products.
Figure 1: Amazon’s Supply Chain Strategy
Supply Chain Strategy Comparison
Starbucks uses a supply chain that slightly differs from Amazon and other entities. As noted above, Amazon’s supply chain focuses on six steps: send inventory, receive and store, customer product ordering, pick, pack, ship, customer service, and customer returns. On its part, Starbucks’ supply chain seeks to improve its operations through reorganization, improving processes, and looking into the future (Shrum, 2018). Through this focus, Starbuck’s supply chain constitutes four basic processes. According to Shrum (2018), Starbuck’s supply chain incorporates sourcing, supplier relationship management, manufacturing and distribution, and delivery and sale. Sourcing covers Starbucks’ coffee beans source. Supplier relationship management certifies that the coffee beans meet Amazon standards while manufacturing and distribution prepare and process coffee beans for distribution. Delivery and sale engage modern technology to guarantee deliveries. Both Amazon and Starbucks understand the significance of reception and storage, shipping, and product processing. However, the two giant organizations differ as Starbucks involves supplier relationship management in its strategy while Amazon emphasizes customer relations, inquiries, and shipping packages.
Supply Chain Global Challenges
Amazon, just as all organizations involved in the supply chain processes, face global challenges that hinder process effectiveness. Global supply chain processes face conflicting business objectives with supplier companies. Supplier companies’ business models may differ from demand organizations through their manufacturing preferences and product price demands (Roy, 2017). As Amazon receives goods from various manufacturers, issues may often arise with suppliers, and it can minimize this challenge by practicing purchase flexibility. Another supply chain challenge relates to market unpredictability. Supply chain unpredictability may include raw material shortages and raw product price variance (Roy, 2017). Amazon can handle this challenge by ensuring that alternative suppliers take over the supply process when the primary source stagnates.
Aggregate Planning Significance to Supply Chain and Minimization Strategies
Aggregate planning enables organizations to determine capacity, inventory, subcontracting, stock-outs, and production. Through aggregate planning, organizations positively impact their supply chains by building demand-satisfying plans and profit maximization strategies (Chopra et al., 2019). However, organizations must impact all supply chain stages. According to Chopra et al. (2019), aggregate planning influences upstream and downstream processes to determine customer supply hindrances. For instance, Amazon must practice aggregate planning to identify collaborative forecast impacting its supply chain and partners. Amazon must also focus on aggregate planning to solve supply chain challenges to maximize profit.
Demand Forecasting Role in Supply Chain Strategy
Demand forecasting entails “pull” and “push” processes responding to customer demands. According to Chopra et al. (2019), demand forecasting push processes identify activity level while pull processes determine available activity and inventory. Both push and pull processes address customer demands by establishing the mismatch between supply and demand. As demand forecasting identifies the mismatch, it works out a collaborative forecasting formula impacting production capacity and decisions (Chopra et al., 2019). In Amazon’s case, the company must forecast customer demands for various products and collaborate with manufacturers to produce enough products to meet projected customer demands.
Price Promotions Impact on Demand Changes
Price promotions enable demand changes to control supply while maximizing profitability. Organizations use price promotions to shift demand peaks and spread them between seasons (Chopra et al., 2019). As the demand peak weakens, supply chain processes find it easier to spread supply between seasons while keeping profits high. Amazon can use pricing promotions to guarantee product demands throughout the year. With this spread, the company will sell products throughout, and suppliers will face fewer to none production peak demands that may result in production and supply shortages.
Conclusion
Amazon’s supply chain strategy suits the global description of supply chain effectiveness as it tackles issues and opportunities aligned to the chain. Supply chains failing to conform to required strategies and approaches face dire issues related to production shortage and unmet customer demands. However, Amazon has mainly retained its position as a global retail giant through its polished supply chain process.
References
Chopra, S., Meindl, P., & Kalra, D. V. (2019). Supply chain management: Strategy, planning
and operation (7th ed.). Boston, MA: Pearson.
Johnson, T. (2020, February 19). How the Amazon supply chain strategy works. Tinuiti.
https://tinuiti.com/blog/amazon/amazon-supply-chain/.
Roy, E. (2017, March 31). What are the biggest challenges of managing global supply chains?
Trade Ready. https://www.tradeready.ca/2017/topics/supply-chain-management/biggest-challenges-managing-global-supply-chains/.
Shrum, R. (2018, July 3). A look inside Starbuck’s seamless supply chain. Dynamic Inventory.
https://www.dynamicinventory.net/starbucks-supply-chain-management/.
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