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c16.doc

Chapter 16 – Service Supply Chains

In-class exercises and discussion points

Critically consider the transition to service economies. How does this affect the manufacturing sector?

In developed and some developing countries, manufacturing is in sharp decline. Students can refer to various scholarly articles and government reports that critique and chart this shift. Considering their studies in logistics and supply chain management, they should familiarise themselves with this significant global shift. It will affect their careers. Students should also reference the potential for servitisation (p307) among manufacturing companies.

As consumers of services, have the students consider a particular service they are familiar with (e.g. a mobile/cell phone contract) and think through its service chain. Then have them contrast this with a manufacturing supply chain.

This exercise should draw out clear contrasts between manufacturing and service supply chains (following figure 16.1, page 313). For example, they might consider the different operational inputs and outputs, and/or the global reach of the supply chains.

Answers to end of Chapter Questions

· With the global transition of developed and developing countries to service economies, consider the implications for manufacturing supply chains. How will the world look 100 years from now if this trend continues?

Students should consider the overall effects of globalisation to answer this. Organisations are likely to continue to seek cheaper and cheaper locations to manufacture. This will create growth in regions such as South America and Africa, but what of economies such as China and Thailand? Will they follow manufacturing trends in Western nations, where manufacturing in minimal and to some extent uncompetitive? These are the sorts of big questions students should consider at this pivotal time in history.

· Consider how many services you have encountered today (e.g. your mail being delivered, the café where you bought your morning coffee, the lunch queue at the university cafeteria, the shop where you bought groceries, the call centre you called to query your mobile phone bill). List them, reflect on how the service provider performed and score them out of 10 for speed, quality and cost. Evaluate their scores and suggest how they might improve.

This is a simple exercise on the face of it. It should however encourage reflection and contextualisation. In completing this exercise students should be able to identify, using theory discussed elsewhere in this book, how service operations perform and how they can improve. It should help them to begin to see opportunities for improvement whenever they encounter a service, which will stand them in good stead for a career in logistics and supply chain management.

· Consider the role technology plays in both of this chapter’s caselets. How do you think advances in technology (e.g. mobile communications, cloud computing, social media) will influence the service sector? Consider potential technology-based service innovations.

Students should consider the rapid communications technology advances in recent years. They are affecting the cost, speed and quality of service delivery. Frameworks and theory from elsewhere in this book could be used to frame their answers.

· Referring to Figures 16.2(a) and (b), list five single-level bi-directional service supply chain examples and five two-level bi-directional service supply chain examples. Compare and contrast these examples. What are the factors that distinguish a single-level bi-directional service supply chain from a two-level one?

This question aims to clarify figure 16.2 for the students. The complementary discussion on page 314 and the original source (Samson, 2000) can be used to support their answers.

Extra essay style question

· Third-party logistics service innovation – refer students to the caselet on pages 315 to 316. That exercise can form the basis of an extended essay based on their research of the major 3PLs.

The major 3PLs are innovating and evolving constantly in this increasing critical and competitive market. Acquisition is a key activity, with the major players buying up smaller businesses and talent in order to target specific local markets or to gain new knowledge or technologies. Some innovations have the potential to advance their industry (e.g. RFID), while others significantly reduce costs and/or delivery leadtimes (e.g. automated storage systems). This exercise/essay should enable students to investigate and identify significant shifts in how global logistics services are changing.

More questions

· What is Service Science, and why is it an increasingly important area of research and learning?

· What are the four attributes of a service and what are their related impacts on purchasing?

· Service provision professionals require different expertise to supply chain professionals. Discuss.

c17.doc

Chapter 17 – Management Science Applications

Note – see also the excel file with the solver solution for the optimisation problem on p323-325 (The Alpha Limited).

Solutions to end of chapter questions

· Distinguish stochastic models from deterministic models

Stochastic – at least one random input variable; deterministic – no random input variables.

· Describe the different types of SC complexity and explain the difficulties they give rise to in our ability to analyse SCs.

As per the list on P320. An analysis of a logistics or SC problem needs to ensure that it is cognisant of the complex nature of the system being analysed – otherwise the results and insights will be neither reliable nor valid.

· Identify the different approaches to forecasting – which in your view is the best approach?

Detailed in first para p327, distinguish quant and qual approaches, and the advantages and disadvantages of the various techniques. The ‘best’ technique will depend upon a number of considerations such as resources available (time, cost and data availability) and the required forecast outputs. Good answers too would point to using predictive analytics.

· Distinguish validity from reliability.

Straightforward question – as per p318/319.

· Why is it not always possible or feasible to select the ‘best’ route for a shipment?

This is the trade-off between satisficing and maximising and the checklist at the bottom of p326.

More questions

· What is systems thinking?

· What are optimisation techniques?

· Detail some of the MS applications in transport, logistics and SCM.

Good websites and video clips

Amazon’s supply chain optimisation technologies: https://www.youtube.com/watch?v=ncwsr1Of6Cw

Logistics simulation software: https://www.arenasimulation.com/industry-solutions/logistics-simulation-software

c17_TheAlphaLimited.xlsx

Sheet1

The Alpha Limited
Shipping Cost	Doncaster	Newcastle
Birmingham	£25	£35
Manchester	£15	£20
Glasgow	£40	£30
Total	Factory
shipped	capacity
Units Shipped	Doncaster	Newcastle
Birmingham	300	0	300	=	300
Manchester	100	100	200	=	200
Glasgow	0	150	150	=	150
Total to DC	400	250
Total Cost
Order Size	400	250	$15,500

Sheet2

Sheet3

c18.doc

Chapter 18 – Emerging Supply Chain Designs

In-class exercises and discussion points

Advertisements for Logistics and Supply Chain Managers

One way to understand the ever changing context within which logistics and supply chain managers work is to review the requirements that are detailed in typical advertisements in newspapers, websites, and so forth (see also the text box on page 337). Ask students to collect a sample of such advertisements which could then be considered in class. The advertisements could, for example, be content analysed to ascertain common job requirements etc.

Solutions to end of chapter questions

· The common Logistics / SC strategies and practices box earlier in this chapter listed many logistics / supply chain strategies and practices. In your view, are all of these undertaken regularly by all organisations, or are some of them specific to certain types of organisations?

Refer to the bullet point list on pages 330/331. The key points to get across are that there are many such strategies and practices (which illustrate the diversity and complexity of logistics and SCM) and that adoption of individual strategies and practices will obviously depend upon the context within which the organisation operates, available and skilled managers, and the wider strategic capabilities of the focal organisation and its supply chain partners.

· Why is it important to synchronise product design and supply chain design? What are the implications of this from an environmental perspective?

Because this can lead to a more efficient supply chain, for example building in postponement into design can allow for less work-in-progress inventory in the supply chain, while designing a product that is easy to repair can be advantageous during the products life in terms of stock-holding of spare parts etc. There are considerable environmental implications: students could note that some estimate that over 80% of carbon savings are only achievable at the supply chain design stage (cf chapter 14) – for example deciding what modes of transport to use and where to locate distribution centres are key decisions made at the supply chain design stage which can have very considerable implications in terms of the environmental impact of the products that move through that supply chain.

· To what extent do you believe a supply chain can be redesigned to compensate for poor product design or poor product quality?

In essence this goes back to the point made in preceding chapters that it is in effect supply chains that compete more so than individual firms and products. Thus without a supply chain, no matter how good the product is it will fail if it doesn’t have a supply chain to support it. Conversely, a good supply chain can in a sense compensate for a relatively poorer product (for example by allowing greater availability, lower cost, and so forth), although obviously this will only apply to a point.

· How can you use a supply chain to innovate?

A broad question which draws upon a student’s understanding of concepts and material right across the book – so what we need to see is how can a supply chain be designed so as to deliver product differently and / or enable the production of new products / services. Areas to mention then include reduced environmental impact (DSCE), mass customisation, additive manufacturing, servitisation, etc. Good to cite company / product examples too.

· Why do you think logistics and supply chain managers require a ‘T-shaped’ skills profile?

Because of the wideranging nature of the logistics manager’s job and the necessary skills required. Obviously one would expect students to describe the structure and logic of the T model: in-depth expertise in one discipline (vertical of the T) combined with enough breadth (horizontal of the T) to allow them operate effectively with other disciplines.

· Review some of the companies form the list of the top 25 supply chains. What makes these supply chains so good?

Obviously answers here would depend upon students’ knowledge of these companies and any further research they can do on their SCs.

Extra essay style question

· What are the key issues that should be considered in designing a supply chain?

This question takes in issues of supply chain strategy (Chapter 4: lean, agile and leagile strategies), sustainability (Chapter 14: what will be the environmental impact of the supply chain), and the various strategies and practices outlined in the current chapter.