This is an MIT Sloan Management Review article. Managers are increasingly recognizing that the benefits of traditional supply chains - reduced cost, faster delivery and improved quality - are no longer sufficient by themselves for the modern marketplace. A new paradigm is emerging of a more sophisticated supply chain, one that also serves as a vehicle for developing and sustaining competitive advantage by delivering specific outcomes. So concluded participants in the Supply Chain Management 2010 and Beyond research initiative - a four-year set of surveys and workshops on which this article is based. The authors report that the "supply chains of tomorrow" should achieve varying degrees of six basic outcomes, depending on their specific customer base and its set of needs. The first of these outcomes is "cost" (a composite of the heretofore sole objectives relating to monetary cost, delivery and quality). The others are responsiveness (the ability to change quickly in terms of volume, mix or location as a function of changing conditions), security (assurance that the supply chain's products will not be contaminated or otherwise unsafe), sustainability ("greenness," or environmental responsibility), resilience (the ability to recover quickly and cost-effectively from disruptions) and innovation (the supply chain as a source of new products and processes or improvements in existing ones).
A U.S. automotive supplier follows a major customer to Asia, and forms a joint venture with a Thai company to build and operate a new manufacturing plant. Key parts are also sourced from the Thai partner's existing plant. The Asian currency crisis causes devaluation of the Thai currency as well as problems for the joint venture, requiring the restructuring of the joint venture and the resourcing of parts from another company. Issues in the case include the recovery of tooling and equipment from the joint-venture partner and cost analysis to determine the best sourcing alternative. An optional Excel template is available for use with this case.
This case deals with Carrier Corporation's management's efforts to create a strategic supply partnership with one of its major suppliers. Some issues covered include purchasing, supply chain management, alliances and partnerships, and productivity improvement. This case has been used in an MBA course on supply chain management and in executive education general management courses.
This case focuses on a fictional company's satellite launch vehicle decision. The basis analysis requires the student to construct a decision tree using discrete probabilities. Further analysis can include the value of information and the value of control. The scope of the decision can include Monte Carlo simulation once continuous probabilities are added to the base case. This case has been used as a quiz.
This case is designed to facilitate a discussion and analysis of Ford Motor Company's e-commerce strategy in 1999-2000. It presents an independent analysis of costs and savings along the automobile-industry supply chain as well as recent information regarding auto dealers' reactions to Ford's e-commerce initiatives.
A regional producer of baked goods faces the challenge of developing and bringing to market as quickly as possible a new nonfat cookie. The project manager decides to use CPM (critical path method) to coordinate the product's introduction. The case provides the necessary planning data to create and schedule the project network diagram. The case is designed to be used with the note "Network Planning/Scheduling Techniques for Project Management," (UVA-OM-0294) or similar reading.
This case requires a decision on the possible consolidation of three Midwest business-travel centers. Significant cost savings in service representatives can be achieved by combining the front-end (booking) operations. The sensitivity of cost to service-productivity levels and customer waiting time is also explored. This case and related materials can be used as part of the Workforce Planning Module.
The consumer-products division of a multinational company is facing a decision on the sourcing of product components: whether to stay in Taiwan or switch to Mexico. See also the supplement to this case, "Cost Analysis for Sourcing Alternatives for Emerson Electric Company ACP Division" (OM-0823).
This note provides a brief history of the origins of return-on-investment measurement at Du Pont and its close link with operations management. The Du Pont chart approach to calculating return on assets is described, and the chart is presented in work-sheet form to facilitate application by persons unfamiliar with the financial concepts. Use of ROA and ROE for performance measurement is discussed, and average measures of two samples of top U.S. and Japanese companies are presented.