Download BA 557 - Global Logistics Management

BA 557 Global Logistics Management: Fundamentals and Strategy
(Proposed as new required graduate course for GO track in the MBA program)
Spring, 2015
Professor: Yusoon Kim, Ph.D.
Office: 412 Austin Hall
Office Phone: 541-737-6066
Email: [email protected]
Office Hours: (
)
Meeting Room/Time: TBD
Credit Hours: 3 – Meets once per week for 3 hours.
Prerequisites: (BA 551 and BA 552 and BA 561) with a B or better and Graduate standing.
COURSE DESCRIPTION
Logistics operations are responsible for the delivery of value-added goods and/or services in any
organization – public or private, profit or non-profit. Logistics costs in total typically can exceed
25% of the cost of doing business (or about 50% of marketing costs), and logistics-related assets
(including inventory) can represent as much as 50% of a company’s total assets.
At the graduate-level, this course will instruct and apply various and key concepts of logistics
management and apply these concepts, and decision-making tools and software to solve practical
logistics problems in the context of global supply chains. Students will learn core logistics-related
concepts including time-based inventory management, warehousing, transportation/distribution
systems design, facility location decision process, and adoption of information technology in
logistics operations as competitive advantages in service-based economy.
Understanding the logistics management is critical for global operations students working in both
private and public sectors. Logistics management offers the fundamental skills and concepts in the
management of large-scale business processes. Its application goes beyond traditional transportation
and warehouse management. For instance, healthcare system design, disaster relief management,
sustainable city planning and food-hub design all apply the essential tools and concepts of logistics
management.
COURSE OBJECTIVES
In this course, we will study the logistics management from the viewpoint of complex systems and
networks. Furthermore, logistics management is about managing the hand-offs in a supply chain hand-offs of either information or product. The design of a logistics system is critically linked to the
objectives of the supply chain. Our goal is to understand how logistical decisions impact the
performance of the firm as well as the entire supply chain. The key learning will be to understand
the link between supply chain strategies/structures and logistical capabilities of a firm or its supply
chain. At the end of the course, students are expected to be able to:
1
1. Develop working knowledge of key logistics management concepts
2. Analyze problems and decisions facing logistics managers and how these problems and
decisions relate to and affect other functions within the organization, as well as other
organizations in the same supply chain.
3. Understand the linkages between key supply chain members across inter-organizational
boundary and their coordination between logistics, IT, sourcing, inventory
4. Apply various quantitative techniques to provide initial solutions to the complex problems
facing logistics managers and supply chain managers.
5. Be able to use of some decision-making software and tools to solve logistics problems.
6. Demonstrate the ability to work in groups
7. Demonstrate the ability to make a professional presentation of business cases
The course is also to get you to use skills that employers have identified as important. Such skill
sets evolve overtime and this class will highlight current skills that companies are looking for.
COURSE READINGS
The class schedule (pp. 6-7) lists discussion topics, business cases, and required reading(s). The
lecture slides and some reading materials will be available on the OSU Blackboard at least a
week prior to the scheduled class. Business cases to be analysed and discussed in class should be
purchased individually (see the pages 7-8 of this syllabus for how to get them).
Note that all cases must be read before the class they are to be discussed in (whether a submission
is required or not). Chapters from the textbook and/or extra readings have been assigned as
background reading with the material being covered. It is strongly recommended that you read
them before each session. Additional materials such as white papers, newspaper articles, or
review questions may be assigned periodically before/during class to assist further in learning.
Required course materials:
1. Supply Chain Management: Strategy, Planning, and Operation (5th ed.) by S. Chopra &
P. Meindl (C&M). Prentice Hall.
2. The Goal. The Paperback Edition; 3rd Revised Edition (July, 2004). By E. M. Goldratt
and J. Cox. North River Press. (Any edition will work. There are old editions.)
3. Business Cases. (Some need to be purchased individually at http://hbr.org/)
4. Class Handouts as needed.
Other textbooks on the subject that may be of interest are as follows:
1. The Management of Business Logistics by J.J. Coyle, E.J. Bardi, and C.J. Langley.
2. Strategic Logistics Management by D.M. Lambert and J.R. Stock.
3. Logistical Management by D.J. Bowersox, D.J. Closs, and O.K., Helferich.
2
LEARNING ENVIRONMENT
To facilitate learning, students are encouraged to attend every class. Class time is reserved for
the delivery of course content materials via lectures and discussions and analyses of business
cases. Students should prepare for class by reading the assigned reading materials. Although
attendance is not mandatory, it is strongly encouraged; a strong correlation between attendance
and student performance has historically been observed. Furthermore, attendance provides an
avenue for students to engage in class participation.
ACADEMIC HONESTY
Oregon State University provides clear definitions and sanctions for academic dishonesty. I
follow these guidelines in defining and handling dishonest behaviour in this class. As a result,
academic dishonesty of any kind is not tolerated. Students caught cheating, plagiarizing, or
participating in any form of academic dishonesty will receive an “F” on the assignment or test
(and possibly an F in the course). A formal report to the associate deans of the College, to the
student’s Dean, and to the Student Conduct Program will be made. I reserve the right to readminister any test or assignment where I believe a person has gained an unfair and dishonest
advantage (e.g., looking at someone else’s answers, bringing in inappropriate material, or
otherwise obtaining information about the content of the exam). If you have any questions about
the extent and severity of sanctions that may result from dishonest behaviour, I suggest that you
take the time to read the OSU Student Handbook or access the OSU Student Conduct and
Community Standards website at: http://oregonstate.edu/studentconduct/offenses-0.
STUDENTS WITH DISABILITIES
Accommodations are collaborative efforts between students, faculty and Disability Access
Services (DAS). Students with accommodations approved through DAS are responsible for
contacting the faculty member in charge of the course prior to or during the first week of the
term to discuss accommodations. Students who believe they are eligible for accommodations but
who have not yet obtained approval through DAS should contact DAS immediately at 737-4098.
COURSE ASSESSMENT
Each student’s final course grade will be computed based on the following categories:
1.
2.
3.
4.
5.
6.
Strategic Case Analysis (Best 6 out of 9 - Team based)
Book Report (Individual)
Case Presentation (Team)
Midterm (Individual)
Final Exam (Individual)
Class Participation & Quizzes (Individual)
Total
Late Work
3
30%
5%
10%
20%
25%
10%
100%
no credit
1. Strategic Case Analysis & Presentation/Book Report (45% of Final Course Grade)
 There will be a total of nine case analyses and one book report due during the term.
 All analyses should be done strictly following the set framework (detailed later in this
syllabus) considering a set of study questions provided in advance.
 Every case analysis should include both quantitative and qualitative aspects, reflecting the
understanding and applications of the contents covered in the previous sessions.
 Each analysis write-up is due in groups and the book report is so individually, all at the end
of the scheduled session, during which we discuss the business case or book.
 Only one analysis write-up will be due per group for each case.
 The write-ups are intended to prepare students for class discussions and presentation.
 All write-ups must be neat and typed (preferred format: 1’’ margin on all sides and Times
New Roman with font size of 12, double-spaced).
 Additionally, each and every team is required to present the assigned case for an overview
(of the subject firm, context, industry etc.), major strategic issues helping to analyze each
case, and implications for/insights into Logistics/Supply Chain Management in general as
well as lead an in-class discussion.
 You need to turn in both a hard and soft copy of your case analysis. No late assignment will
be allowed. A soft (electronic) copy should be received prior to the scheduled session.
 Grading will be based on a five-point scale for both case analyses and a book report. I will
look for (1) completeness, (2) organization, and (3) thoughtfulness. Case presentation will
be graded based on presenters’ (i.e., team’s) being (1) organized and (2) articulate in their
presentation, and (3) effective in leading an in-class discussion.
 If anyone is interested in appealing the grade, a hard copy of the written appeal along with
the original report/write-up must be turned in within one-week of the receipt of the grade.
2. Midterm & Final Exam (45% of the Final Course Grade)
 The two exams offer students an opportunity to digest materials and/or integrate them
together into a coherent whole.
 It will cover relevant, required reading materials, lecture notes, case/book reports, and class
discussions.
 More detailed information about the Midterm and Final Exam will be offered during the 4th
and 10th weeks of class.
3. Class Participation & Quizzes (10% of the Final Course Grade)
 Class participation is an essential ingredient of learning. Learning retention is correlated
strongly with active participation. We will practice both “cold calls” and “warm calls.”
4

Also, during the term, a few quizzes may be administered as necessary. They intend to
check for students’ levels of understanding of class materials and help students stay on track
toward the desired learning.
4. Final Course Grade
 As most of the work is to be done in groups, individual grades will take into account a peer
evaluation from each group member of the other members in groups.
 It is extremely important & part of the honor code that each member of a group contributes
to the case analysis and case presentation. If any individual has not contributed for a
particular week, other members should not append his/her name to the case write-up but the
person must submit a separate report on his/her own. It will also be the group’s
responsibility to ensure that this happens.
There will be no curve. The final course grade will be assigned based on the following scale:
A
AB+
B
BC+
C
CD
F
93% and higher
90% and up to 93%
87% and up to 90%
83% and up to 87%
80% and up to 83%
77% and up to 80%
73% and up to 77%
70% and up to 73%
60% and up to 70%
less than 60%
Through the term, your progress will be posted through Blackboard in a timely manner based on
the points you will have earned up to the point by that time, allowing you to evaluate your status
and make plans accordingly.
5
TENTATIVE CLASS SCHEDULE**
S2015
Topic
 Readings for the Class Session
Assignment Due
Week 1
Introduction: What’s Logistics and SCM (L/SCM) and how to measure
L/SCM Performance?
 Chs.1-2: Chopra & Meindl (C&M), 5th Edition
 Reading#1: Cooper, M.C., Lambert, D.M., and Pagh, J.D., 1997.
“Supply Chain Management: More Than a New Name for Logistics.”
Group Formation
International Journal of Logistics Management (online)
due
 Reading#2: Cooper, M.C., and Ellram, L.M., 1990. “Characteristics of
Supply Chain Management and the Implications for Purchasing and
Logistics Strategy.” International Journal of Logistics Management
(online)
Week 2
L/SCM Drivers and Metrics
 Ch.3: C&M, 5th Edition
 Case I: Seven-Eleven Japan Co. (in C&M)
 Group Case Presentation
Quiz 1
Case Analysis I
due (in groups)
Week 3
Inventory Strategies
 Ch.6: Coyle, Bardi & Langley text (online)
 Reading#3: Fisher, M.L., Hammond, J., Obermeyer, W., Raman, A.,
1994. “Making Supply Meet Demand in an Uncertain World.”
Harvard Business Review. May-June. (online)
 Case II: Crocs: Revolutionizing an Industry’s Supply Chain Model for
Competitive Advantage†
 Group Case Presentation
Case Analysis II
due (in groups)
Week 4
Sourcing Decision Processes
 Chs.6 & 15: C&M, 5th Edition
 In-class discussion on the book, “The Goal”
 Case III: Lego Group: An Outsourcing Journey†
 Group Case Presentation
Week 5
Book Report (The
Goal)
Case Analysis III
due (in groups)
MID-TERM EXAM (in class)
Week 6
Guest Speaker (from [company name])
Transportation/Distribution Strategies
 Ch.14: C&M, 5th Edition
 Case IV: The Sourcing Decision at Forever Young (in C&M)
Case Analysis IV
due (in groups)
Week 7
Transportation/Distribution Strategies
 Ch.14: C&M, 5th Edition
 Case V: Exel plc-Supply Chain Management at Haus Mart†
 Group Case Presentation
Quiz 2
Case Analysis V
due (in groups)
6
Week 8
Logistics/Distribution Network Design
 Chs.4 & 5: C&M, 5th Edition
 Case VI: Synnex International: Transforming Distribution of HighTech Products†
 Group Case Presentation
Case Analysis VI
due (in groups)
Logistics/Distribution Network Design
Case Analysis VII

Case
VII:
Managing
Growth
at
SportStuff.com
(in
C&M)
Week 9
& VIII due (in
 Case VIII: BioPharma, Inc. (in C&M)
groups)
 Group Case Presentation (Case VII)
Logistics Coordination in SC
 Ch.10: C&M, 5th Edition
Case Analysis IX
Week 10  Case IX: Michael Dell - Winning on the Demand Side of the
due (in groups)
Information Revolution†
 Group Case Presentation
Finals
FINAL EXAM (Date, Time, Location)
Week
* This reading can be found on the course Blackboard site (online).
Note: The above schedule is subject to changes at Professor’s discretion. Changes, if any, will be
announced in class or via the announcements tool in Blackboard. It is student’s responsibility to
be aware of changes and take actions accordingly.
† These business cases need to be purchased individually at http://hbr.org/ ($6.95/each). The
detailed information on each case product is provided below:
Crocs: Revolutionizing an Industry’s Supply Chain Model for Competitive Advantage
Authors: Michael Marks, Chuck Holloway, Hau Lee, David W. Hoyt, Amanda Silverman
Product number: GS57-PDF-ENG
Source: Stanford Graduate School of Business
Publication Date: Jun 18, 2007
Revision Date: Mar 07, 2011
Lego Group: An Outsourcing Journey
Authors: Marcus Moller Larsen, Torben Pedersen, Dmitrij Slepniov
Product number: 910M94-PDF-ENG
Source: Richard Ivey School of Business Foundation
Publication Date: Nov 12, 2010
Exel plc--Supply Chain Management at Haus Mart
Authors: Zeynep Ton, Steven C. Wheelwright
Product number: 605080-PDF-ENG
Source: HBS Premier Case Collection
Publication Date: Apr 20, 2005
Revision Date: May 16, 2005
7
Synnex International: Transforming Distribution of High-Tech Products
Authors: Shih-Fen Chen, Lien-Ti Bei
Product number: 908A19-PDF-ENG
Publication Date: Dec 01, 2008
Revision Date: Mar 11, 2010
Michael Dell: Winning on the Demand Side of the Information Revolution
Author: Nancy F. Koehn
Product number: 801363-PDF-ENG
Source: Harvard Business School
Revision Date: Jan 28, 2004
Publication Date: Feb 12, 2001
FRAMEWORK FOR STRATEGIC CASE ANALYSIS
In developing a Strategic Business Case Analysis for each case, all teams are required to follow
the analysis framework depicted below.
a. Cover page (report title, team name & member names, date, whom to submit)
b. Table of Contents
a. Executive Summary (a brief overview of the case – a half to one page at the max.)
b. Introduction
c. Business Situation
i. External environment
ii. Internal environment
d. Logistics/Distribution System Design
i. Assumptions, factors and uncertainties
ii. Logistics/supply Chain performance dimensions
e. Logistics/Supply Chain System Assessment / Analysis
i. Logistics/supply chain model or framework
ii. Logistics/supply chain planning
f. Logistics/Supply Chain Operations Strategy
i. Strategy development
ii. Key performance indicators
iii. Strategy implementation (to meet the objectives/goals)
iv. Contingencies
v. Mitigation strategies
g. Conclusion
h. Works Cited
8
The above is a suggested structure of the case analysis write-up, and therefore the deliverable
may vary to a certain degree depending on the case under discussion and analysis. Below I also
list some study questions for each case, which teams are encouraged to consider when
developing their strategic case analysis.
CASE STUDY QUESTIONS
CASE I: Seven-Eleven Japan Co.
1. A convenience store chain attempts to be responsive and provide customers what they
need, when they need it, where they need it. What are some different ways that a
convenience store supply chain can be responsive? What are some risks in each case?
2. Seven-Eleven’s supply chain strategy in Japan can be described as attempting to micromatch supply and demand using rapid replenishment. What are some risks associated
with this choice?
3. What has Seven-Eleven done in its choice of facility location, inventory management,
transportation, and information infrastructure to develop capabilities that support its
supply chain strategy in Japan?
4. Seven-Eleven does not allow direct store delivery in Japan but has all products flow
through its distribution center. What benefit does Seven-Eleven derive from this policy?
When is direct store delivery more appropriate?
5. What do you think about the 7dream concept for Seven-Eleven in Japan? From a supply
chain perspective, is it likely to be more successful in Japan or the United States? Why?
6. Seven-Eleven is attempting to duplicate the supply chain structure that has succeeded in
Japan and the United States with the introduction of CDCs. What are the pros and cons of
this approach? Keep in mind that stores are also replenished by wholesalers and DSD by
manufacturers.
7. The United States has food service distributors that also replenish convenience stores.
What are the pros and cons to having a distributor replenish convenience stores versus a
company like Seven-Eleven managing its own distribution function?
CASE II: Crocs: Revolutionizing an Industry’s Supply Chain Model for Competitive
Advantage
1. What are Croc’s core competencies?
2. How does the company exploit these competencies in the future? Consider the following
alternatives:
a. Further vertical integration into materials (i.e., producing necessary materials
itself more in-house)
b. Growth by acquisition
c. Growth by product extension
9
3. To what degree, does each of the alternatives in Question 2 fit the company’s core
competencies, and to what degree do they defocus the company away from its core
competencies?
4. How should Crocs plan its production and inventory? How do the company’s gross
margins affect this decision? What can go wrong?
CASE III: Lego Group: An Outsourcing Journey
1. What were LEGO’s main expectations and learning from the relationship with
Flextronics?
2. What are the key challenges in maintaining a relationship like the one between LEGO
and Flextronics?
3. How can LEGO handle the supply chain complexity to improve knowledge sharing,
flexibility, and coordination?
4. Discuss the key considerations when outsourcing or offshoring production.
5. Describe the competitive environment of the industry and how it relates to LEGO’s
strategic choices.
CASE IV: The Sourcing Decision at Forever Young (Purely Quantitative Analysis)
1. Draw a decision tree reflecting the uncertainty over the next two periods. Identify each
node in terms of demand and exchange rate and the transition probabilities.
2. If management at Forever Young is to pick only one of the two suppliers, which one
would you recommend? What is the NPV of expected profit over the next two periods for
each of the two choices? Assume a discount factor of k = 0.1 per period.
3. What do you think about the hybrid approach? Is it worth paying the local supplier extra
to use her as part of a hybrid strategy? For the hybrid approach, assume that management
will order a base load of 900 units from the Chinese supplier for each of the two periods,
making up any shortfall in each period at the local supplier. Evaluate the NPV of
expected profits for the hybrid option assuming a discount factor of k = 0.1 per period.
CASE V: Exel plc-Supply Chain Management at Haus Mart
1. How is value added in supply chain management through better planning versus better
execution?
2. Why do companies outsource freight management and contract logistics to third-party
logistics providers (3PLs)? Why do 3PLs perform these activities better?
3. How would a deep understanding of supply chain execution and stronger capabilities in
execution allow companies to make better supply chain planning decisions? Please be
10
specific. For example, how would a better understanding of execution lead to better
inventory-management decisions?
4. Should Exel move into joint planning with Haus Mart?
CASE VI: Synnex International: Transforming Distribution of High-Tech Products
1. Why do foreign manufacturers of electronic products use external distributions in Taiwan
rather than establishing their own internal sales office?
2. How do you make sense of the three conventional practices (i.e. catering to big clients,
pushing for volume sales and reimbursing price drops for unsold stock) observed in
electronic products distribution in Taiwan?
3. Why did Synnex break away from these traditional practices? What is the company’s
economic rationale for adopting its unconventional practices?
4. Can the operational model of Synnex be extended to foreign markets? Or, if it works only
in Taiwan, what modifications must be made in foreign countries?
5. Can the operation model be extended to cover other products? If yes, which products can
be most easily uploaded to this logistic system?
6. How each or difficult will it be for Synnex to get into Internet marketing? Can it become
“the Amazon of high-tech industries”?
CASE VII: Managing Growth at SportStuff.com (Purely Quantitative Analysis)
1. What is the cost SportStuff.com incurs if all warehouses leased are in St. Louis?
2. What supply chain network configuration do you recommend for SportStuff.com” Why?
3. How would your recommendation change if transportation costs were twice those shown
in Table 5-17?
CASE VIII: BioPharma, Inc. (Purely Quantitative Analysis)
1. How should BioPharma have used its production network in 2009? Should any of the
plants have been idled? What is the annual cost of your proposal, including import
duties?
2. How should Landgraf structure his global production network? Assume that the past is a
reasonable indicator of the future in terms of exchange rates.
3. Is there any plant for which it may be worth adding a million kilograms of additional
capacity at a fixed cost of $3 million per year?
4. How are your recommendations affected by the reduction of duties?
11
5. The analysis has assumed that each plant has a 100 percent yield (percent output of
acceptable quality). How would you modify your analysis to account for yield differences
across plants?
6. What other factors should be accounted for when making your recommendations?
CASE IX: Michael Dell - Winning on the Demand Side of the Information Revolution
1. It is 1983, and you are a first-year MBA student at Harvard Business School. Your
strategy professor asks you to analyze the PC industry. How do you reply? Be sure to
include leading players, terms of competition, profitability trends, and potential sources
of competitive advantage.
2. How did Michael Dell, age 18 in 1983, view the PC market? What made him believe that
he could succeed in this young, fast changing industry?
3. In 1984, Dell took a yearlong leave from the University of Texas in order to expand his
PC business. If you were an angel investor in Austin at the time, how would you evaluate
Dell’s prospects? Would you invest in his venture? Why or why not?
4. Between 1984 and 1993, what were the most important milestones in the evolution of
Dell’s strategy? What role did the entrepreneur’s original vision play in the company’s
development?
5. How important a role did branding play in the development of Dell Computer? How did
the company’s founder and his colleagues build the brand? With which other Information
Revolution companies would you compare Dell’s demand-side initiatives?
BOOK: The Goal
Questions to Consider When Reading the Goal (Not part of the case write-up)
1.
What signs indicated that the Bearington plant was in trouble?
2.
Why did Rogo believe that the robots were a success?
3.
What would be the “normal” way for management to solve Bearington’s problems?
4.
What did Jonah suspect when he heard about the robots?
5.
What were the three measures Jonah suggested should be used to evaluate a
manufacturing system’s performance?
6.
What happens when system capacity is reduced to match market demand?
7.
Explain what Rogo learned from his hike with Herbie and the Boy Scouts.
8.
What did the experiment with the die and matches indicate? How did the attempt to
expedite a late order prove the same thing on the factory floor?
9.
How did Jonah define bottleneck and non-bottleneck resources?
10.
What is the value of time on a bottleneck?
11.
What did Rogo and his staff do about their bottlenecks?
12.
What caused the bottleneck spread problem?
12
13.
14.
15.
16.
17.
What solved the bottleneck spread problem? Should we be concerned about the
increased idle time at the non-bottleneck stations?
Why was it decided to cut batch sizes? What happened?
What happens to part cost when set-ups are increased on non-bottleneck resources in
order to allow small batch sizes?
What is the Goal?
Do you think it would be so easy in real life? If not, why not?
13