21511 Global Operations and Supply Chain Management - Spring 2022
21511 Global Operations and Supply Chain Management - Spring 2022
Assessment Task 2 Project Report (Group)
GROUP REPORT COVER PAGE
UTS: MANAGEMENT DISCIPLINE GROUP
SUBJECT NUMBER: 21511 SUBJECT NAME: Global Operations and Supply Chain Management
Tutorial Number: 7 Group Number: 6
Contact Person:
Group Leader (Or contact person) Name: Bradley Arcidiacono
Email: 13900269@student.uts.edu.au
Note: Legitimate cooperation between students on assignments is encouraged, since it can be a real aid to understanding. It is legitimate for students to discuss assignment questions at a general level, provided everybody involved makes some contribution. However, students must produce their own individual written solutions. Copying someone elses work is plagiarism and is unacceptable. If you sign the declaration below and it is found that the work submitted is not your own work the University may impose penalties.
Declaration: We declare that this assignment is our group work. We have not copied from any other students work or from any other source except where due acknowledgment is made explicitly in the text, nor has any part been written for me by another person.
If this assignment is submitted after the due date, I understand that it will incur a penalty for lateness (@10% per day late) unless we have previously had an extension of time approved and have attached the written confirmation of this extension.
Signature of Students Date
Bradley Arcidiacono 3/10/22
Kye Jones 3/10/22
Xiabao Huang 3/10/22
Louis Gerasimou 3/10/22
Ronnie Wilson 3/10/22
Part A: Overview of the HBR Simulation Game (617 words)
The task at hand revolved around a simulation over four years, at a phone company. The simulation modules allowed us as individuals to assess and implement any strategy we felt was correct for the business at that moment In time. The concept of the game was designed to highlight how a few key decisions throughout the operations of a business can improve the ability of a company to accurately predict and fulfil demand. The simulation begins by introducing you to the team of six members and is followed by the product options for your product. This is the first of many important decisions we were forced to make. It allowed us to implement certain options to add on to our phone and gave us a breakdown of cost and revenue models associated with our choices along with a detailed estimated monthly impact and forecast. While helpful it still allowed for you to make educated guesses on what would work for you and how consumers would react to your choices.
We then moved to the forecasting room, in this section we were given estimates from model A and B. This was an important section as our estimates would be used against us at the end of the year when the board handed down their decision of if we had a good year or not. If you were too far off the estimates and didnt adjust it throughout the year, it would often lead to lower stars when being evaluated. The third stage of the game revolved around the outsourcing of manufacturing and was where you ran the simulation. It was at this stage that you were to delegate resources for module A and B, while also having to pick which supplier you were to use. This was a big decision as the unit cost, lead time, capacity and setup costs all varied, and are instrumental in the overall success or failure of the year. This stage of the task forced us as a group to maintain flexibility throughout the months and years, as consumer demand for products varied as well as external forces outside of our control. The amount we produced throughout the months was in our opinion the hardest to judge and overall was the biggest indicator of how successful we would be at the end of the year.
The final part of the simulation gave us insight into our revenues for the year, showing margins and overall input costs. This section was where we received feedback from the board and as a group, we found this to be some of the most insightful information throughout the whole task. It helped us formulate our strategy going forward and attempt to make the necessary changes, allowing for us to look at what the board desired and if we were making the right decisions throughout the task.
The group appreciated the level of insight into the world of global operations and supply chain management that the simulation delivered. It provided the ability to experiment with new tactics without the risk involved. Thus, it gave us a clear understanding of how different decisions have a diverse impact, whether positive or negative. The progressive stages from the design room to production helped our team to experience and understand the entire supply chain system holistically. Conclusively, comprehending how suppliers hold advantages over another is critical to the success of any operation. The different years encouraged us to progress and attempt to balance supplier choice and production most efficiently. One of the most valuable lessons identified was the need to remain flexible regarding the supply chain. This flexibility is paramount to accommodate the fluctuations in demand and match supply as closely as possible.
Part B: Critical Reflection and Analysis (820 words)
The simulation created an environment where students were able to study forecasting, determining what worked and what did not while also seeing the pros and cons of changing production orders as a strategy.
The forecasting room was not always able to determine the demand for the mobile phone models. Due to the monthly estimates not always being exact, changing production orders was very common within the company. Changing production orders is effective for a company as they are able to see the current demands and change their approach in order to adhere to these demands and improve sales. The negative aspect of this is that it is expensive to change production orders, although it can be a long term investment if done correctly e.g. following the current popular demand and changing production accordingly in order to gain the best results. If done incorrectly, this could be a significant loss for the business as an initial $2 million will be lost changing the production order while further millions could be lost if there is a poor reception for the current product being produced. This would also increase left-over stock, therefore, creating less room in the businesss inventory and ultimately wasted production. This shows how the companies who are the most successful are able to determine the demand of their products before production.
Choosing the correct suppliers was extremely difficult. There were a lot of factors in determining which supplier would be best for your business. These included the time it would take to manufacture the products, how long it would take to ship these products (overseas vs local) and how much inventory capacity there was for each supplier. Another aspect which made determining which supplier was best for your business difficult was that your choice did not always adhere to the board members demands. For example, creating flexible production was not always straightforward, as towards the end of the year there was always stock left over which was not desirable for the business. This demonstrates why choosing a supplier who manages to produce just enough stock is desirable for a business as this leads to less left over stock and production not being wasted. The speed at which products were being created and how long this would take to ship is important for a business, therefore it was important to have a supplier who could create products fast and ship efficiently as that would significantly improve the process when changing production orders.
The simulation has provided a practical outlook on the global supply chain management processes and activities that would be important in relating and giving links to the theories learned in the modules, versus what is happening in the real world. Given that this is just a simulation, we still felt that it was a realistic scenario of what we could be experiencing professionally. As a supply chain manager in the simulation, the most challenging situation here is on how to make a collective decision to anticipate the demand needed to guarantee continuous margins and profit for the company. As can be seen in the decision history, the gross margin started at 24.74%, but continuously fluctuated from 19.83-22.65% from Year 2 to 4. In year 1, the production orders were fixed at 56k and 28k for Model A and Model B, respectively. We felt that this was a good estimate and will still yield profitable results, and it was proven later by the results shown, garnering a gross margin of $44,413,800. In the design room, the three major changes included communication upgrade, stylish, and storage capacity. However, this resulted in an overall negative result by year 2, but mostly affecting Model B. This was not according to plan because the decisions made was to really meet the demand of both the models. Therefore, the decisions made were calibrated to be more intensive for Model B and less intensive for Model A with forecasting of 54k and 33k for Model A and Model B, respectively.
Through years 3 and 4, some of the strategies made for the design room seemed ineffective for Model B, but upon reflection, when we added more quality features to the products, such as its super-slim feature and camera quality, there was a huge increase in the demand and sales. However, the downside of this is that we did not anticipate such an increase in the demand that we only forecasted 21k for Model B, maintaining the same level of forecasts for Model A throughout the years. This means that we need better planning as to when we would likely have a greater demand for a specific year, given the changes that we will be doing from the pricing to the designs, and considering the boardroom member discussions and votes we will encounter. This ensures that our forecasting will be closer to what we will anticipate the next round or year.
Part C: Discussion and Conclusion (169 words)
The simulation software provides immense insight into a business's operations and how critical decisions can positively or negatively impact the business' success over time. Understanding your suppliers' key strengths and weaknesses provides a greater opportunity to strategically plan a company's operations and SCM. In a generalised workplace setting, the learnings from this activity underpin the key fundamentals of decision-making, no matter what the scenario. By conducting simulations for one's individual organisation, you will be able to forecast estimated demands for the product or service you are providing and more accurately determine the production levels you need to meet such demand. However, much importance should be signified to drawing comparisons between predicted forecasts and actual performance. Without doing so, a company is not learning from its past failures or successes. Therefore, the business cannot pass this knowledge and experience on to future projects. Conclusively, outweighing each decision opportunity is critical to the success of one's operations, as it needs to meet your business's needs and be aligned with its values.
Appendices
Appendix 1: Screenshots of students performance in simulation
Xiabao Huang
Bradley Arcidiacono
Kye Jones
Louis Gerasimou
Ronnie Wilson
