Below is the recommended strategy in the beginning of the game.
1. Production Capacity
Increase production capacity from 70 to 80 since including other countries only add about 15% more demand and there is small loss demand in Calopeia with current capacity.
2. Priority Level
The priority level should be setup based on the demand of each country: 5 Calopeia, 4 Tyran, 3 Fardo, 2 Entworpe, 1 Sorange.
3. Number of Factory
We should keep one factory in Calopeia. The cost of building another factory cannot be justified with lower demand in other countries.
4. Number of Warehouse
One or more warehouses should be built in other countries to meet the demand there. I suggest we build one warehouse in Tyran (2nd highest demand after Calopeia).
5. Shipping method
We should ship by mail within the same country, but use truck for other countries.
6. Timing
We should store inventories soon enough to meet demand by increasing the order quantity from 1000 to 2000 in Calopeia, and order quantity of 500 in Tyran warehouse. The order point also needs to be adjusted so production can start sending finished goods to warehouses.
7. We should not exclude Fardo from our business since it has potential of generating revenues.
Obviously I underestimated the demand and interpreted the historical data incorrectly. Being risk-averse, not much money was spent for investment. Only one warehouse was built, and no new factories were built. The capacity was only increased to 100 during the game. I was also surprised with the demand of Sorange which I initially thought was the lowest compared to the other countries' demand.
In the course of the game, no major decisions were made to shift our game from the initial strategy. I was being comfortable to see our team's progress. With one factory and two warehouses, the only thing I did was shifting priority levels between warehouses to receive products from one factory. The decision was based on warehouses' inventories. Serving or not serving countries was based on the cyclical demand of each country. I was still hoping that Sorange demand would go down since I was used to seeing curves in demands, but until the end of the game, Sorange demand still keeps going up.
If I were to do it again, I would invest more (at least another factory in Sorange, a warehouse in Sorange, increase capacity more, and do not serve Fardo since it costs too much to deliver products there).
Even though our team was at the bottom, the cash flow seems increasingly stable. Not significant, but stable. The conservative approach did not play well when it comes to competition and high demands from the customers. In this game, I should have paid more attentions to customer demands, I think meeting customer demands is the key to success in this game.
Wednesday, August 1, 2007
Supply Chain Games - Round I
This is the note from Supply Chain Games Round I - Team SCAM
Our strategy was to limit loss demand by shipping faster via mail. Then, we saw that we still couldn't meet the demand, so we changed the production capacity (up). It worked well, but the demand curve went down. Then, the demand was up again, and we increased the production capacity again the second time. Then, we tried to play with order quantity and point, but our production could not keep up with the higher demand causing loss demand. The last thing we tried was to produce more by increasing the batch size.
If we were to play round 1 again, we would increase the capacity higher and sooner to minimize the loss demand. We just waited too long to take action, so we could do better next time. We need a better communication method besides email (use phone calls next time). I would do more calculation to find out what costs us more (most important and least important).
Our strategy was to limit loss demand by shipping faster via mail. Then, we saw that we still couldn't meet the demand, so we changed the production capacity (up). It worked well, but the demand curve went down. Then, the demand was up again, and we increased the production capacity again the second time. Then, we tried to play with order quantity and point, but our production could not keep up with the higher demand causing loss demand. The last thing we tried was to produce more by increasing the batch size.
If we were to play round 1 again, we would increase the capacity higher and sooner to minimize the loss demand. We just waited too long to take action, so we could do better next time. We need a better communication method besides email (use phone calls next time). I would do more calculation to find out what costs us more (most important and least important).
Thursday, June 14, 2007
Supply Chain Game 06.13.07
Yesterday was my first day at Supply Chain Management Class. Professor Hughes split the class into two teams with one student as an observer. Each team was given 3 pieces of 8x11 inch white paper, 30 colorful cards, and 2 tapes.
The requirement was to create an item out of the raw materials that could be fit into 12 inch cube. We were required to use all the cards (the use of paper is optional), but the card's face cannot touch the other card's face. Only edges can touch edges, and edges can touch faces of the card. Additional requirement was to secure the product. We were given 15 minutes to complete the task.
Our team did not deliver because of the following. First, we did not spend enough time thinking about the design. Even though, one of my teammate did not think it was a design issue, the end product proved that our design did not meet the requirements.
Second, my mistake was to follow the crowd without questioning or asking question about the design. Perhaps it was my upbringing that caused me not to ask questions so much. Even though I was not sure whether the product would meet the requirements, I decided to support the concept and started working on the product. In the beginning I asked what we're going to make, but my team thought that the question was out of scope, it was not part of the requirements. We focused on "how" instead of "what". It is critical that we focus on "what" when we're in the beginning of the project (requirements gathering). We were supposed to get customer involved in this first phase. If we had a solid understanding of the requirements and implemented the right product, the rest would be easy.
One of our teammate mentioned Quality Control was the issue. I personally think that Quality Control starts from the beginning of the project until the product is finished. Again, if we started right, the rest would be easy.
Third, time was the issue. We were given only 15 minutes from concept to finish product. If we had more time, I would spend more time making sure our design meet the requirements (for example, creating a prototype). Basically, we spent most of our time manufacturing the parts of the product and found out that it did not work out after everthing was assembled together. I tried to fix it by suggesting that we split the parts into 3 products. But we only had about 2 more minutes left and my teammates did not hear me until the time was up. One teammate used the last two minutes to break the products apart and came up with totally new design which the other teammate disagreed.
I personally think that communication, team player and leadership play a major role in this process. Communication means being able to communicate your idea and listen to other people's idea. With the available resources, we pulled things together and worked to deliver a product even though we failed to deliver. It was an interesting experience.
The requirement was to create an item out of the raw materials that could be fit into 12 inch cube. We were required to use all the cards (the use of paper is optional), but the card's face cannot touch the other card's face. Only edges can touch edges, and edges can touch faces of the card. Additional requirement was to secure the product. We were given 15 minutes to complete the task.
Our team did not deliver because of the following. First, we did not spend enough time thinking about the design. Even though, one of my teammate did not think it was a design issue, the end product proved that our design did not meet the requirements.
Second, my mistake was to follow the crowd without questioning or asking question about the design. Perhaps it was my upbringing that caused me not to ask questions so much. Even though I was not sure whether the product would meet the requirements, I decided to support the concept and started working on the product. In the beginning I asked what we're going to make, but my team thought that the question was out of scope, it was not part of the requirements. We focused on "how" instead of "what". It is critical that we focus on "what" when we're in the beginning of the project (requirements gathering). We were supposed to get customer involved in this first phase. If we had a solid understanding of the requirements and implemented the right product, the rest would be easy.
One of our teammate mentioned Quality Control was the issue. I personally think that Quality Control starts from the beginning of the project until the product is finished. Again, if we started right, the rest would be easy.
Third, time was the issue. We were given only 15 minutes from concept to finish product. If we had more time, I would spend more time making sure our design meet the requirements (for example, creating a prototype). Basically, we spent most of our time manufacturing the parts of the product and found out that it did not work out after everthing was assembled together. I tried to fix it by suggesting that we split the parts into 3 products. But we only had about 2 more minutes left and my teammates did not hear me until the time was up. One teammate used the last two minutes to break the products apart and came up with totally new design which the other teammate disagreed.
I personally think that communication, team player and leadership play a major role in this process. Communication means being able to communicate your idea and listen to other people's idea. With the available resources, we pulled things together and worked to deliver a product even though we failed to deliver. It was an interesting experience.
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