Managing Operations Across the Supply Chain 3rd Edition Solution Manual

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-1Chapter 1Introduction to Managing Operations Across the Supply ChainSuggested Answers to Discussion Questions1. ReviewFortunemagazine’s “Most Admired” American companies for 1959, 1979,1999, and the most current year. (The issue normallyappears in August each year.)Which companies have remained on the top throughout this period? Which ones havedisappeared? What do you think led to the survival or demise of these companies?The companies that have stayedon top throughout this period are General Electric, Southwest,Berkshire Hathaway, and Proctor and Gamble.UPS and Coca Cola were some of thecompanies that disappeared.The companies that were able to stay at the top of the list were theones able to deal with major changes in the industry easily.In order to stay afloat in hardertimes, they were managed by peoplewho understood operations management; they had awinning value proposition that was continually revitalized by the introduction of new productsand services.The companies that did not stay at the topunable to make the necessary changesso easily; perhaps theiroperationsmanagement was not at the caliber of the other companiesable to stay at the top of the list.2. Select two products that you have recently purchased; one should be a service and theother a manufactured good. Think about the process that you used to make the decisionto purchase each item. What product characteristics were most important to you? Whatoperational activities determine these characteristics?

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-2Student answers to this question will vary. The following is an example from one student:“Two products Ihaverecently purchased were a sweater and a haircut. The process I used tomake the decision to purchase the sweater wastrying on the sweater in different colors,contemplating the purchase at home, waiting for sweater to go on sale,and then purchasing it.The process I used to make the decision about where to get my haircutincludedresearchingpictures of how I wanted my hair to look, asking advice about where to go from friends,researching online for reviews about stylists,andgetting my haircut by that stylist.I wanted tomake sure both products were going to satisfy me enough so that I wouldn’t regret eitherpurchase. I had to be comfortable with both my sweater and my new hair style, luckily I was! Ialso wanted both my sweater and my hair style to last for a while to make them worth the cost.The operational activities that determine these characteristics are the manufacturing, shippingand selling the sweater in stores. If the sweater was poorly made and didn’t fit correctly, Iwould not have purchased it.If it was not available (on the shelf) I could not have purchased it.The operational activities that determine the characteristics of my hairstyle are the stylistarriving to work on time for my appointment, washing, cutting and blow drying myhair in away that I was expecting(having sufficient capacity so that I did not have to wait too long).Since my hair was cut and styled the way I requested, I will be returning to that hair stylist.3. What are the primary operations management decisions in each of the followingcorporations?

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-3Again, student answers will vary but may include the following elements.a. Marriott Hotelsand Resorts:How to greet and treat customers during their stay,whatservices to supply to customers, how to checkcustomers in so that they are not waiting for longperiods of time to get to their rooms, how to deal with unhappy customers in order to keepthem coming back, how to measure customer satisfaction.b.A private golf and tennis club:How to serve customers while playing tennis/golfso theycontinue tospend their money and playat this private course, what services to offer in order tokeep customers happy.How to best manage the facilities and train employees.c. Ben & Jerry’s:What flavors to make, how much of each flavor to make, how to keep upwith demand, what suppliers to use, how to measure customer satisfaction.d. ExxonMobil Corporation:How to manage exploration, extraction and refinementoperations effectively and efficiently. What services are to be delivered, how to keepretailcustomers happy, how to deliver goods.4. Consider the following processes that you frequentlyencounter as a college student.Describe each process and its input, activities, and outputs. What is being converted ortransformed in each process? Who are the customers, suppliers, and stakeholders foreach process?

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-4a. Enrolling in classes:Classes must be scheduled so that students can enroll in them, studentscommunicate with advisor about necessary classes, students sign ontowebsiteand find suitableclasses that fit together into schedule for each semester. The inputs of this process arethestudent’s and administrators’time and problem solvingeffort. The activities are decisionmaking, communicating, and scheduling so that everyone has a chance to take the classes theywant each semester. The output is the student’s schedule and enrollmentinto classes.Thestudent’s schedule is being transformed. The customer is the student, the stakeholders are theprofessors who get paid to teach the courses and the businesses that would like to hire studentsonce they complete their courses. The supplier is the university.b. Taking a class:The processand activities of taking a class entailmaking it to class on timeevery session, studying before class to be able to follow along and participate, arriving with thecorrect materials in order to take notes and complete activities in class, and completinghomeworkbeforeit is due. The inputs arethe knowledge of the professor and informationcontained in course materials, along with the student’shard work, studying, participating, andphysically going to class. The outputs are friends and education. The student is beingtransformed. The customer is the student. Or one might consider thebusiness who would liketo hirethe studentto be the customer. The supplier is theuniversity.

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-5c. Buying a ticket for a play, concert, or basketball game:The process and activities ofbuying a ticket entail making a decision to buy the ticket, saving up the money, either orderingthe ticket online or physically going to a ticket booth and purchasing the ticket. The inputsaretime and money. The outputs arethe experience of seeinga great play, concert,orbasketballgame and memories. Theownership of theticket is being converted. The customer is the ticketpurchaser; the stakeholder is the owner of the basketball team, or the director of the play, or themanager of the band. If no onepurchasestickets, those stakeholders may no longer have jobs.The supplier is the team, the actors, or the band.5. Recall the last time you went to a fast-food restaurant such as McDonald’s.Describe allof the goods and services that make up yourtotal product experience.The goods that made up my experience were the actualfood and drink that I purchased. Theservices were being greeted when I walked up to the counter, ordering my food, receiving myfood in a timely manner along with my order being correct. The service of a clean restaurantalso added to my total product experience.6. The following firms have long been seen as having strong competitive advantages.Read about one of these companies. Also draw from your experience as a customer toidentify that company’s competitive advantage. Discuss how operations managementrelates to the company’s competitive advantage.Student answers will vary. An example for Coca-Cola is:

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-6Coca-Cola’s success comes from its secret formula for its main product, Coca-Cola. It has beenable to keep its formula a secret for so long that major competitors like Pepsi are having a hardto following in its footsteps. In order to stay at the top, Coca-Cola has recently beenrestructuring its supply chain so that they can keep their products in high demand. This newsupply chain system will enable Coca-Cola products to keep shelves at stores like Wal-Martand Meijer filled so that customers do not have to settle on other brands.Along withrestructuring supply chain comes restructuring operations management. If the wrong distributeror bottler is employed or not enough products are produced, Coca-Cola’s profits and demandcould suffer.7. Whyshould a firm consider the position of stakeholders when evaluating operationalalternatives? Consider the role of government and its impact. (Hint:Consider workingconditions and pollution.)A firm should consider the position of stakeholders because they could have a big effect on thecompany along with the company’s profits. If ahighly polluting firm does not makechanges tomake stakeholders happy (like environmentalists), then those stakeholders may alert thegovernment through the EPA. The EPA could then research and investigate the company and ifthey found anything against the law, the EPA could bring that firm to court.This would effectits abilities to get stockholders, to keep its customers,run the business,and therefore to make aprofit.

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-78. Most people have worked as “operations managers” at some time. Describe a job orexperience that you had that involved the management of a process.Student answers will vary. A good example offered by an undergraduate is:“When I was a manager at a restaurant, it involved the management of a process. Every night Ihad to make sure that there were tables available for customers that had made reservations, andthat no one was waiting too long for their tables, food, drinks, or bills.I had to put bigger tablesin certain sectionswhereI knew the more experienced wait staff would make the customers’experiencemoreenjoyable.I also had to go aroundto each table to make suremeals weresatisfactory and did anything to make the customer’sexperience at the restaurant pleasantenough to assure customer patronage.”Business Textbook Supply ChainCase–Teaching NotesI like to start my class with this case, because the product is familiar to students. Many of themare in the process of acquiring their books for the semester or term, so the idea of value andcost are fresh in their minds. Also, the technologies and markets involved are not terriblycomplex, yet there is a lot change going on that makes the discussion relevant and current. Theoverall goal of the case is to set the stage for a discussion of all the topics related to supplychain operations management.

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-8Synopsis:The case gives students an opportunity to step through a “value chain analysis” for a productand industry with which they have some familiarity. The steps of the analysis include:1.Identify key players (critical customers)2.Chart physical and information flows3.Describe value proposition offered by each player4.Describe primary value add for each player (who is responsible for key valueelements?)5.Identify market and technology dynamics6.Ideas?? Considering the relationships and dynamics in the chain, how might weimprove the value propositions?By analyzing these issues from the perspective of a book publisher, students can gain anappreciation for the different types of value created in supply chain operations, as well as therole thatpartnerships play in developing and delivering products. In addition, this particularindustry situation provides a great example of the dynamics that govern supply chainoperations management. Changing technologies and markets make it important for operationsmanagers to continuously evaluate the value propositions that their companies offer, and howchanging conditions may render them obsolete.

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-9Case Questions:The case questions guide the student through the value chain analysis identified above.1. Draw a diagram that illustrates the textbook supply chain from the publishers' point of view.2. Who are the various customers for textbooks? What do these customers want in terms ofgoods and services related to textbooks? From the publisher's point of view, who is the criticalcustomer?3. Who are the major players in the supply chain? What operational roles do they play interms of creating value for the critical customers?4. Given the anticipated changes in the market and in product and process technologies, howdo you envision each supply chain player's role changing in the future?5. What advice would you give to Dave Eisenhart regarding long-term operational changes thefirm should consider?Case Analysis:1. Draw a diagram that illustrates the textbook supply chain from the publishers' point ofview.The diagram below identifies most of the major players in the traditional textbook supplychain. Students will quickly identify other channels ofas well, such as on-lineretailers. I encourage them to concentrate first in thinking about the traditional channel thathas hard bound books stored in inventory at several stages throughout the chain. You can askthe question of why inventory exists? Why do publishers revise books every 3 years? Or otherquestions just to get them thinking.

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-10Textbook supply chain from publisher’s perspectiveRetailDistPublisherPrinter/ BinderOtherSupplierInkSupplierPaperSupplierStudentProfessorMaterial flowsInformation, currency flows (orders, payments)Sales ReporderAuthorsDesignersEditorsCarrier2. Who are the various customers for textbooks? What do these customers want in terms ofgoods and services related to textbooks? From the publisher's point of view, who is thecriticalcustomer?

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-11I usually draw a table such as the one below. Ask the students to identify which valuecharacteristics are most important and which are nice but not necessary. Using the idea of“order winners and qualifiers” is also useful here. Compare and contrast what the differentcustomers want and identify conflicts. Ask how a publisher might make tradeoffs among thesebook characteristics in designing a new book.CustomerWhat he/she cares aboutStudentPrice!!!, weight of the book, durability,ease of use (e.g., easy to read),Professor (critical customer because he/shemakes the purchase decision)Content fits course design, ease of use(course prep materials), currency ofcontent, Price??,Retail bookstore ownerDurability!! (wants to re-sell the book asmany times as possible), size (smaller isbetter to take less shelf space),3. Who are the major players in the supply chain? What operational roles do they play interms of creating value for the critical customers?Talkthrough the various roles, including:Retailer–storage and transfer of ownershipDistributor/carrier–storage, transportation, availabilityPublisher/Authors–design, developmentPrinter/suppliers–material transformations4. Given the anticipated changes in the market and in product and process technologies, howdo you envision each supply chain player's role changing in the future?

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-12Market changes:Constantly evolving business contentMore short courses, on-line courses, and other courses that do not needan entire textbookMore case teachingDesire to combine content from multiple sourcesTechnology changes:Print on demand technologies (make smaller print batches economical,even lot sizes of 1), in future each book will be printed on demand at the retail site“Custom published books”–combine materials from various sourcese-booksSelf publishing–will authors need publishers in the future?Example: Educational TextsReadability (visual quality)TimeHard bound textMainstream user requirementsPrint on demand textElectronic textToday

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Chapter 01-Introduction to Managing Operations Across the Supply Chain1-13If e-books ever become mainstream, then the value provided by the printer, distributor, andretailer will be minimized.5. What advice would you give to Dave Eisenhart regarding long-term operational changesthe firm should consider?Some issues the publisher might consider:-forward integrate into retail andof e-books?-Thinkabout value that the publisher creates for the author and how to protect againstthe threat of self publishing (key value provide might be marketing and sales functions,integration of authors’ ideas with other key knowledge sources, etc.)-Purchase or partner with competitors to gain access to wider scope of content–forexample, McGraw Hill/Irwin has a deal with Harvard to include cases in theirbook/coursepacksIwrap up the discussion by pointing out the strategic and dynamic nature of managingoperations spread across a supply chain. A sharp operations manager must stay abreast of:-changing market conditions and customer desires-competitor moves-changes in technology and capabilities of key partners and suppliersOverall, he/she must have a keen understanding of how his/her firm creates value today,and how that might be different tomorrow.

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Chapter 02-Operations and Supply Chain Strategy2-1FromChapter 2Operations and Supply Chain StrategySuggested Answers toDiscussion Questions1.Why should the firm never outsource its core capabilities? What happens if the firm isapproached by a supplier who is willing to supply goods andservices based on these corecapabilities at a significantly lower price? What should the firm do?Its core capabilities are the source of the ability of the firm to compete. If you outsource them,then you run the risk of “teaching” someone (i.e., your supplier) about what you do and whatmakes you successful. If they can learn from you, then they can become a strong competitor ofyours.If you are approached by a firm that is willing to supply goods and services based on your corecapabilities, then you really have two options before you. The first is to see if they are reallyable to do a better job of executing these core capabilities than you are. If that is the case, thenyou have two options before you: (1) learn from them or (2) get out of the market–they arebetter than you. The second, assuming that they are not able to do a better job of competing onyour core capabilities, is to turn down their offer. They are obviously willing to take a short termloss in exchange for a long term win (gained when they learn about your core capabilities).2.Apply the corporate/SBU/functional planning hierarchy introduced in this chapter toyour university/college or business. What would be the equivalent to corporate planning?SBU planning? Functional Planning?

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Chapter 02-Operations and Supply Chain Strategy2-2In a university, you would find the following relationshipStrategic Planning HierarchyUniversity EquivalentCorporateUniversitySBUCollegeFunctionalDepartment3.How would you define capabilities within a school or business?Again,the capabilities are those specific skills or processes that an organization develops tosolve or address specific types of problems. Consequently, using this approach, the capabilitiesof an organization such a school or business can be found in its faculty (their strengths, andresearch focus), the pedagogy by which material is taught, and the focus of the school (finance,supply chain, operations management).4.When can a consumer be a critical consumer? In other words, when does it make senseto focus on consumers such as retail stores, distributors, or buyers, rather than on the endconsumer?A consumer such as a retail store, distributor or buyer becomes a critical customer when theconsumer busy based on factors such as ability. For example, consider snack foods. Fewconsumers really have strong brand preferences; they tend to buy what is available.Consequently, the firm has to target the person or function that has the greatest impact onavailability. In this case, it would tend to be the retail store, distributor or buyer. By the way,this is the strategy that Frito-Lay has pursued and it has been highly successful.5.A critical concept introduced in this chapter was that of the value proposition. Exploretwo competing products (e.g., RIM’s Blackberry and Apple’s Iphone). Identify theunderlying value propositions present in these products and how this proposition is evidentin the resulting products.

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