Classification: JHAH: Non Business Use
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Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2 MGT322 (2nd Term 2023-2024)
Deadline: 30/03/2024 @ 23:59
Course Name: Logistics Management
Course Code: MGT322
Student’s Name:
Semester: 2nd
CRN:
Student’s ID Number:
Academic Year: 1445 H (2023-2024)2nd Term
For Instructor’s Use only
Instructor’s Name: Dr. Mohammed Arshad Khan
Students’ Grade: /10
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
•
•
This assignment is an individual assignment.
Due date for Assignment 2 is 30/03/2024
• The Assignment must be submitted only in WORD format via allocated folder.
• Assignments submitted through email will not be accepted.
• Students are advised to make their work clear and well presented, marks may be reduced
for poor presentation. This includes filling your information on the cover page.
• Students must mention question number clearly in their answer.
• Late submission will NOT be accepted.
• Avoid plagiarism, the work should be in your own words, copying from students or other
resources without proper referencing will result in ZERO marks. No exceptions.
• All answered must be typed using Times New Roman (size 12, double-spaced) font. No
pictures containing text will be accepted and will be considered plagiarism).
• Submissions without this cover page will NOT be accepted.
Classification: JHAH: Non Business Use
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?????? ????????
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Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Logistics Management
ASSIGNMENT -2
Submission Date by students: 30/3/2024
Place of Submission: Students Grade Centre
Weight:
10 Marks
Learning Outcome:
1. Demonstrate an understanding of how global competitive environments are changing supply chain
management and logistics practice.
2. Apply essential elements of core logistic and supply chain management principles.
3. Analyze and identify challenges and issues pertaining to logistical processes.
Assignment Workload:
This assignment is an individual assignment.
Critical Thinking
The global marketplace has witnessed an increased pressure from customers and competitors in
manufacturing as well as service sector (Basu, 2001; George, 2002). Due to the rapidly changing global
marketplace only those companies will be able to survive that will deliver products of good quality at
cheaper rate and to achieve their goal companies try to improve performance by focusing on cost cutting,
increasing productivity levels, quality and guaranteeing deliveries in order to satisfy customers (Raouf,
1994).
Increased global competition leads the industry to increasing efficiency by means of economies of scale
and internal specialization so as to meet market conditions in terms of flexibility, delivery performance
and quality (Yamashina, 1995). The changes in the present competitive business environment are
characterized by profound competition on the supply side and keen indecisive in customer requirements
on the demand side. These changes have left their distinctive marks on the different aspect of the
Classification: JHAH: Non Business Use
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
???????? ??????? ?????????
?????? ????????
???????? ???????? ????????????
College of Administrative and Financial Sciences
manufacturing organizations (Gomes et al., 2006). With this increasing global economy, cost effective
manufacturing has become a requirement to remain competitive.
To meet all the challenges organizations try to introduce different manufacturing and supply techniques.
Management of organizations devotes its efforts to reduce the manufacturing costs and to improve the
quality of product. To achieve this goal, different manufacturing and supply techniques have been
employed. The last quarter of the 20th century witnessed the adoption of world-class, lean and integrated
manufacturing strategies that have drastically changed the way manufacturing firm’s leads to
improvement of manufacturing performance (Fullerton and McWatters, 2002).
Read textbook chapter 7 or secondary data on the internet and answer the following questions.
Question:
1. Why big Manufacturing Companies adopted Lean Thinking and the JIT model? (3 Marks)
2. Discuss major types of Waste, and why overproduction is the biggest waste companies must keep
in mind during production. (3 Marks)
3. With the initiation of artificial intelligence. The agile supply chain is a perfect concept for future
SCM? Give reasons with examples. (3 Marks)
4. APA style Reference ((1.0 Marks)
Each answer should be within the limit of 300- 400 words.
The Answer must follow the outline points below:
•
Lean Thinking and JIT Concept
•
Agile Supply chain
•
Their Main functions
•
Reasons with suitable Examples
•
Reference
Ans 1:
Ans 2:
Ans 3:
Slide 6.1
Chapter 6:
Supply chain planning and control
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.2
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.3
• The focal firm ‘game plan’ comprises a set
of inter-linked modules ranging from ‘front
end’ (demand management, resource
planning, sales and operations planning
and master production scheduling) to
‘engine’ (materials and capacity planning)
to ‘back end’ (detailed planning and control
of source– make–deliver processes). All
are linked to the enterprise resource
planning (ERP) database.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.4
Figure 6.1 The focal firm ‘game plan’
(Source: From Manufacturing Planning and Control for Supply Chain Management, 5th Ed., McGraw-Hill (Vollman, T.E., Berry, W.L., Whybark, D.C. and Jacobs, F.R. 2005), reproduced with
permission of the McGraw-Hill Companies.)
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.5
Managing inventory in the
supply chain
• Planning and controlling factory output is but part of the
challenge of managing material flow in the supply chain.
• Upstream processes such as distribution and retail for
both finished products and spare parts are subject to
independent, random demand. Such demand is
independent in that it is not affected by the actions of the
focal firm .
• Dependent demand, on the other hand, is fixed by the
actions of the firm – such as order acceptance and
determining forecasts.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.6
• ‘Economic’ batch sizes and order sizes
• The question of how many parts to make at a time has
traditionally been answered by reference to a
longstanding concept called the ‘economic’ batch
quantity (EBQ) formula.
• Similar principles are used to determine how many parts
at a time to order from suppliers in ‘economic’ order
quantities (EOQs).
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.7
• Both EBQ and EOQ assume that parts are
used at a uniform rate (i.e. that demand is
stable), and that another batch of parts
should be made or ordered when stock
falls below the re-order point.
• (Figure 6.3)
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.8
Periodic order quantity and
target stock levels
• Various methods have been adopted to overcome some
of the deficiencies of EOQ models, which mean that a
set order size is placed on a supplier whenever the
inventory level falls below the re-order level. The effect
upon suppliers is that although a regular amount is
ordered
• An EOQ system finds it very difficult to cope if demand
goes up or down rapidly.
•
If demand goes up rapidly, then an EOQ system would
tend to make replenishments that lag the demand trend.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.9
Planning and control in
retailing
• Retailing is faced with planning and control
challenges which are quite distinct from
manufacturing:
. A retailer cannot generate sales without stock, and stock
that is bought for sales that do not happen ‘constitutes a
retailer’s nightmare’ (Varley, 2006).
• Several stages of the internal supply chain must be
coordinated – depots, back of store and front of store.
• Retail profit margins in grocery are tighter (2–4 per cent)
than for large, branded manufacturers (8–10 per cent).
•
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.10
continued
• Demand can be affected by changes that are difficult to
forecast,
• ‘Best before’ and ‘use by’ dates for fresh produce
increase obsolescence pressuresand inventory turns.
• Reverse logistics is more complicated because product
is being reversed from one point (the store) to a
multitude of supply chains
• (suppliers).
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.11
Implications of poor
coordination
• One consequence of poor coordination
within a supply network is amplification of
changes in demand upstream.
Amplification of demand changes has
been called the bullwhip effect.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.12
four major causes of the bullwhip effect:
? updating of demand forecasts: resulting in changes to
safety stock and stock in the pipeline;
? order batching: while retail customers may buy mostly on
Saturdays, MPC (Manufacturing planning control) systems
may batch orders according to different timing rules;
? price fluctuations: promotions most often result in
lumping of demand into peaks and troughs, when the
ongoing pattern is stable;
? rationing and shortage gaming: when the latest games
console is in short supply, retailers are rationed by
manufacturers.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.13
Overcoming poor
coordination in retail supply
chains
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.14
• Efficient consumer response (ECR)
• ECR is designed to integrate and rationalize product
assortment, promotion, new product development and
replenishment across the supply chain.
• It aims to fulfil the changing demands and requirements
of the end-customer through effective collaboration
across all supply chain members, in order to enhance
the effectiveness of merchandising efforts, inventory flow
and supply chain administration (PE International, 1997).
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.15
• The main areas addressed under ECR
initiatives are category management,
product replenishment and enabling
technologies. These can be broken down
into 14 areas where individual as well as
well-integrated improvements can be
made in order to enhance efficiency (see
Figure 6.8).
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.16
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.17
Category management
• With an objective of preventing stockout situations and
improving
supplier
retailer
relations,
category
management aims to balance retailers’ product volume
and variety objectives.
• Among activities included in the category management
process are the capture and utilization of knowledge of
the drivers behind consumer attitudes and choices.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.18
Collaborative planning, forecasting and
replenishment (CPFR)
•
Collaborative planning, forecasting and replenishment (CPFR) is
aimed at improving collaboration between buyer and supplier so that
customer service is improved while inventory management is made
more efficient.
The trade-off between customer service and
inventory is thereby altered (Oliveira and Barratt, 2001).
•
•
CPFR focuses on the process of forecasting supply and demand by
bringing various plans and projections from both the supplier and the
customer into synchronization.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.19
Vendor-managed inventory
(VMI)
• Vendor-managed inventory (VMI), is an
approach to inventory and order fulfilment
whereby the supplier, not the customer, is
responsible for managing and replenishing
inventory.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.20
Quick response (QR)
• Quick response (QR) is an approach to
meeting customer demand by supplying
the right quantity, variety and quality at the
right time to the right place at the right
price.
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011
Slide 6.21
Questions to be discussed in
tools
• How is material flow planned and
controlled in the supply chain?
• How is it possible to improve
coordination between retail and
manufacturing processes?
Harrison and van Hoek, Logistics Management and Strategy: Competing Through the Supply Chain, 4th Edition, © Pearson Education Limited 2011