1

MSc International Management CEMS

Global Supply Chain Management
IM03CC




Preliminary version Subject to changes.
Last updated: J uly , 2014











Lecturers
Prof.dr. Ren de Koster (coordinator)
Dr. Melek Akin-Ates

Department of Technology and Operations Management
Rotterdam School of Management, Erasmus University
Academic Year 2014/2015

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GLOBAL SUPPLY CHAIN MANAGEMENT (IM03CC)


Course Faculty
Prof.dr. M.B.M. de Koster (coordinator)
Office: T10-56 (after mid August : T09-56)
Tel: 010-408 1719
Email: rkoster@rsm.nl

Dr. M. Akin-Ates
Office: T10-50
Tel: 010-408 1636
Email: mates@rsm.nl

Course Staff
Mrs. Carmen Meesters, Office T10-25 (after mid August: T09-25), Tel: 010 408 1719, Email:
cmeesters@rsm.nl

Course Description
Supply chain management (SCM) has emerged as one of the major areas for companies to gain
a competitive edge. Managing supply chains is a complex and challenging task, due to current
business trends of expanding product variety, short product life cycles, increasing outsourcing,
globalization of business, and continuous advances in information technology. Supply chain
management, as a natural successor to operations management, is a fundamental driver not only
for further improving operations but also for strengthening the competitive position of firms.
When a company faces the pressure of excessive inventories, degraded customer service,
escalating costs and declining profits, or a poor return on assets, its supply chain is out of
control. On the other hand, when a company moves into new markets or new technologies, it
must have its supply chain prepared for new business challenges and opportunities. The course
will introduce students to concepts and techniques related to the design, management and
improvement of supply chains and supply chain operations.

The course focuses on a variety of challenging supply chain business situations. For example,
how different types of supply contracts can be used to design win-win solutions between buyer
and supplier, how the benefits of information sharing can be estimated in the context of supply
chain, and what supply chain strategies match with proliferating product variety. Other topics
include, but are not limited to, supply chain design, performance measurement and metrics,
inter-organizational collaboration, business process integration, and alignment of incentives.

Course Objectives
By the end of this course, you will:
understand the role of supply chain management in the overall strategy of the firm
through the conceptual, strategic view of supply chain design and operations
provided in the course;
have knowledge of, and skills for, managing and coordinating operations in large and
complex demand-supply networks;
have enhanced your critical, conceptual and creative thinking, not only in the area of
supply chain management but also in general management, which is required for
identifying both problems and improvement opportunities; and
have improved your discussion, debating and presentation skills as well as your
capability to gain insights from journal articles.
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Teaching Methods / Course Format
This is a discussion-based course that relies heavily on the so-called case teaching method.
Teaching cases
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as well as pedagogical games are used to set up a platform for discussion in the
classroom. The format relies heavily on the capability of students to think critically and their
readiness to be engaged in discussions that include both problem solving and decision-making.
Hence, students are expected to be prepared for the scheduled sessions according to the detailed
course outline that will be distributed at the beginning of the course. In addition, lectures are
used for teaching some supply chain management concepts and tools, as we aim to maximize
the benefit of the course from the perspective of students. The textbook of Simchi-Levi et al. is
meant to supplement the journal articles, cases and other material distributed in class. The
written exam is designed in such a way that it tests how well students can apply concepts,
methods and tools learnt during the course.

Class Attendance
Class attendance is mandatory. Certain obligations may require you to miss a class but no more
than two absences are allowed. Without regular attendance, it will be difficult to get a passing
grade. If you need to miss a class, you have to notify the lecturer (and coordinator) in advance
by email, with the reason for your absence. Moreover, note that class attendance is not the same
as class participation (see details below).

Class and Case Preparation
Teaching cases require a very thorough preparation by the participant. You are expected to read
the case very well and prepare the accompanying questions prior to the class. In addition, the
assigned literature should be read in advance to facilitate class discussion. In a typical class
session, one or more students will be asked to begin the discussion of a selected topic. If you
have thoroughly prepared the case and/or readings you should have no difficulty in handling
such a lead-off request.
During case discussions, we will build a complete analysis of the case situation and address the
problems and issues. In this course, the development of verbal skills is given high priority, and
the classroom should be considered as a laboratory in which you can test your ability to present
and defend your analysis, recommendations, and implementation plans clearly, to convince your
fellow-students of the desirability and success of your approach to complex problems.
Main criteria used for judging the level and quality of your class participation for grading
purpose are:
Is there a willingness to participate?
Is there a willingness to test new ideas, or are all comments middle-of-the-road?
Are points made relevant to the current discussion? Are they linked to the comments of
others?
Do comments clarify and highlight important aspects of earlier comments and lead to a better
understanding of the concepts being covered?
Do comments show clear evidence of appropriate and insightful analysis of the data?
Is the participant a good listener?
We assume that you will be completely prepared for every class. Since we frequently call on
individuals whose hands are not raised, you should let the instructor know before class if and
why you have come unprepared. Without proper preparation, it will be difficult to receive a
passing grade.
To help us and your fellow students to learn your name quickly, please use a name card placed
in front of you. Also, please try to sit in the same seat every class. Also, to help us create a
stimulating class environment, use the front seats first as much as possible.

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A teaching case describes typical administrative issues or problems confronting a manager in an organization, usually presented
from the standpoint of the decision maker involved. It gives you the opportunity to place yourself in the position of the decision
maker, offering debate on alternative courses of action, rather than offering a single "correct" outcome or solution. In other words,
teaching cases serve as educational vehicles and are not to be considered as best practices or business cases.
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Prerequisites:
Participants should master Operations Management concepts as taught in undergraduate courses
in Operations management, Logistics management, or Supply chain management. Such material
can be mastered by self study, for example from the book:
J. Heizer and B. Render (2011), Operations Management, Pearson Prentice Hall, Upper Saddle River, 10
th

edition, ISBN 0-13-511143-9. In particular the following chapters (topics) are important: 4 (forecasting),
6 (quality management), 7 (process strategy), 9 (layout), 11 (supply chain management), 12 (inventory
management), 14 (Material Requirements Planning: MRP and ERP), 15 (scheduling), 16 (JIT) and
Module D (waiting line models).
Any other book on OM covering these topics will do.


Literature
A collection of journal papers and cases that will be distributed in class (D) or made
available via Blackboard (B).
SKS: Simchi-Levi, D., Kaminsky, P. & Simchi-Levi, E. (2008): Designing and Managing
the Supply Chain, McGraw-Hill, 3
rd
edition, ISBN 978-0-07-110750-1, selected chapters.
Please note that the collection of journal articles and cases forms the primary course literature,
and the text book of Simchi-Levi et al. is used as background material, only where appropriate.

Material and Copyright Fee
To receive a grade for this course, you need to pay a 25 fee to Mrs. Carmen Meesters (course
secretary, office T10-25) as a contribution to the copyright fees of the cases, papers, and games
used. The department has to pay these fees up front per person to the copyright owners.

Assignments
There are two types of assignments: individual assignments and group assignments. Groups
consist of 5-6 persons (unless specified otherwise). Individual reports need to be your own
independent work. There will be a grade penalty for turning in replicated and/or group work for
the individual assignments. The group assignments have to be done in groups of five people and
needs to be done independently of other groups. The groups are formed by us so that you have
the opportunity to enhance your group skills.
All assignments will be graded on the usual scale from 1-10. They need to be handed in as hard
copies (1.5-spaced, 11 point size, standard margins) and dropped in the mailbox outside Mrs.
Carmen Meesters office (T10-25 or T09-25), unless specified otherwise.

Requirements and Grading
The final grade of the course will be composed from the following assignments:
Class participation (individual) 10%
Case reports and games 35%
- CEMS Productions Lab (group) 10%
- Individual purchasing assignment 15%
- Supply Chain game (group) 10%
Written (short) exam 55%
Total 100%

Deadlines for assignments will be announced during the lectures and posted on blackboard
afterwards.
The exam will be open book and covers materials of the book, all class discussions, cases, and
literature treated. The exam focuses on understanding concepts. It is not needed to learn the
book by heart. The best exam preparation is to prepare and actively participate in each class,
and make and understand the assignments. Up to 20% of the exam can exist of quantitative
exercises similar to those practiced in the exercise lecture and the additional (online) test.
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In case of a fail for the exam and assignments, the assignment grades will be declared void and
a re-examination has to be taken counting for 100%. This re-examination can be oral, written, or
a combination. Make an appointment with the coordinator in case of a resit. Please be aware that
in case of a resit, the last grade will count (i.e. you run the risk of a lower grade or even a fail).
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BIOGRAPHY & CONTACT DETAILS

Ren B.M. de Koster (http://www.rsm.nl/rdekoster,
http://people.rsm.nl/r_dekoster) is a professor of Logistics and
Operations Management at Rotterdam School of Management, Erasmus
University. He holds a PhD in Industrial Engineering from Eindhoven
University of Technology. He worked as a consultant for seven years,
responsible for concept, design and implementation of logistic
information and material handling systems. His research interests are
warehousing and material handling, retail operations, and behavioral
logistics. He is (co-) author/editor of 8 books and over 150 papers in
books and journals. He currently also lectures at UCL (B), UP (SA),
USTC (PRC), and TIAS. He chairs RSMs program committees, chairs Erasmus Smart Port, is
a member of the R&D committees of BVL, AIRL, and the European Logistics Association, jury
member/chair of 3 Dutch logistics awards, chair of LOGISTICA: the industry sector
organization on logistics systems, and on the editorial (review) boards of 11 journals, including
JOM, OR, IJOPM and TS.



Melek Akin Ates (http://www.rsm.nl/people/melek-akin-ates/) is
Assistant Professor of Purchasing & Supply Management at Rotterdam
School of Management, Erasmus University. She obtained a PhD in
Purchasing and Supply Management from Rotterdam School of
Management, Erasmus University in 2014. Melek teaches Strategic
Sourcing master elective and Bachelor Thesis courses, and supervises
many master thesis projects. Her main research interests are purchasing
and innovation, buyer-supplier relationships, behavioral aspects of
purchasing, and green supply chain management. She was awarded the
Best Student Paper Prize at Decision Sciences conference in 2011,
Chris Voss Highly Commended Award at POM/EurOMA conference in 2012, and was a finalist
for the Chan Hahn Best Paper Award at Academy of Management conference in 2014. Some of
her research has been published in International Journal of Production Research and
International Journal of Operations and Production Management, and others are under review in
operations management journals where she frequently serves as an ad-hoc reviewer.



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DETAILED COURSE OUTLINE

The following detailed course outline specifies per session, the required preparation including
readings, cases and other assignments. Please consult the outline carefully before every session
in order to come well prepared to each class.

The required material (cases and articles) can either be picked up at the department room T9-
25, after you have paid the fee- (D) or made available via the Blackboard site (B). For articles
longer than 15 pages we only provide the link (due to copyright reasons), which can only be
accessed through the EUR library journal subscription.

The course consists of three parts:
Principles of Operations and Supply chain management,
Supply chain practices and +
Collaboration in demand-supply networks.
Not all classes are exactly in this order. This detailed course manual gives you an overview.

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Class 1: Introduction to OM
Case: Airbus (game will be explained in class)
Lecturer: Prof.dr. M.B.M. de Koster
When: Tuesday, September 2, 2014, 9:00-11:45

Preparation
No particular preparation is required

Topic
In the first class we will brush-up your knowledge of operations and logistics management. We
treat concepts like, throughput, throughput time (lead time), cycle time, takt time, inventory, as
well as various tools to achieve performance: assembly line balancing (ALB), process control
(batch sizing, order release, push-pull control, JIT, ..). We do this partly by playing a game.

Learning objectives
To become (again) acquainted with the domains of operations, logistics and supply chain
management
To understand the fundamental balance between service and efficiency
To become (again) familiar with important performance measure variables in OM: lead time,
throughput time, cycle time, takt time, utilization, productivity, work-in-process, service
level
To understand the OM triangle: fundamental relations in performance management: between
information (or lead time), capacity, and inventory
To understand implementations of the above fundamental relations, particularly the role of
lead time, batch size, capacity, and utilization.

After we have played the game in class, you should do the following:
Read your Operations Management textbook on the topics listed above in italics (use the index),
in particular (chapters and page numbers refer to the H&R textbook): product layout (p.392-
397), inventory management (reorder systems, reorder points: Ch.12), EOQ (Ch.12), Littles
law (L=W: p.786-787) and queuing systems (p.772-781).

Literature
Heizer, J., Render, B. 2011. Operations Management, Pearson-Prentice Hall, Upper Saddle
River, 10
th
edition, ISBN 0-13-511143-9
SIMCHI-LEVI, D., P. KAMINSKY & E. SIMCHI-LEVI, 2008. Designing and Managing
the Supply Chain, McGraw-Hill, 3
rd
edition, ISBN: 978-0-07-110750-1, Chapter 1.
B G.M. Schmidt (2005), Applicability of the OM triangle to health care, Excerpt from OMER
1(1), 87-103. Posted on BB after class.
B Some OM formulas. This sheet contains definitions used today and formulas that will be
used further in the course.


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Between the first and fourth class your team will play the CEMS Productions Lab
game during 7 days

Topics
The learning objectives of this assignment are lead time, inventory and capacity management
skills in the context of a network of interrelated processes (in this case a health care lab). This
simulation demonstrates how uncertain demand and process dependencies interact to affect lead
time.

Preparations (start as soon as possible)
Read the CEMS Productions case and analyze the realized demand of the first available days.
Based on this, prepare your teams strategy for playing the game. Your team can use multiple
computers for analyses, if so desired. Game playing will take one full week.

I n your preparation you might find it handy to review some theory from an OM textbook and
try to apply it, for example:
Demand forecasting. H&R: -small part of- Ch.4 (moving average, regression, exponential
smoothing)
Reorder methods (EOQ, reorder point, stochastic demand). H&R: Ch.12
Queuing (relation between OM performance measures). H&R: p.772-781
Schmidts OM triangle (see BB, session 1)
The newsvendor problem (H&R: p.524-525)

Assignment 1
All teams must submit a ppt slide presentation as hand-in report illustrating decisions
taken. Please take it with you at the class of 12 Sept. This report will be graded. The
final score achieved accounts for 10% of the grade. Further details of the assignment
will be posted on Blackboard.
The winning team will have the opportunity to present its strategy in session 6. The
team ending last will be asked to share the lessons learned.
Final scores will be announced on Blackboard.







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Class 2: Performance measurement and improvement
Case: Kristens Cookie Company. KCC
Lecturer: Prof.dr. M.B.M. de Koster
When: Thursday, September 4, 2014, 9 :00-12 :00

Topics
The focus in this session is on the trade-off between Operational Efficiency and Customer
Service Experience. To this end, we build on the case Kristen Cookie Company (KCC).
Specifically, we try to see the bigger picture by addressing two questions:
- How can we improve operational efficiency, without changing the business model?
- How can we change the business model to improve operational efficiency?

Preparations
Case (pick it up in Carmen Meesters office T10-25 of T09-25): Kristens Cookie Company.
KCC is intended as a fun review of the fundamentals of process analysis: set-up time, run
time, throughput time, cycle time, labor content, bottleneck, and capacity. The case also
introduces tools and concepts such as process flow diagram, capacity analysis, and Gantt
charts and serves as a stepping stone to such issues as labor flexibility, interaction between
product design with the production system, product positioning and pricing. It cements the
foundation for the more advanced topics later on in the module.
This case looks deceivingly simple but when you start working on it, you realize it is
tougher than you think. Take your time to understand the concepts and try and answer the
questions and problems listed at the end of the case description.

Literature
SIMCHI-LEVI, D., P. KAMINSKY & E. SIMCHI-LEVI, 2008. Designing and Managing
the Supply Chain, McGraw-Hill, 3
rd
edition, ISBN: 978-0-07-110750-1, Chapter 1. Similar
to 2
nd
edition, chapter 1.
B K.J. Roodbergen/M.B.M. de Koster, Deterministic performance estimation. This is non-
compulsory background reading only
B F.X. Frei (2006), Breaking the trade-off - Between efficiency and service, Harvard Business
Review 84(11), 93-101. Can be read afterwards.
D R. Bohn, K. Somers and G. Greenberg (1986). Kristen's Cooky Company (A). Harvard
Business School Case No. 9-686-093, Harvard Business School Publishing, Boston, MA
02163.



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Session 3: Exercise lecture
Lecturer: Masoud Mirzaei/prof.dr. M.B.M. de Koster
When: Friday, September 5, 2014, 9:00 - 12:00

Topics
This class is non-compulsory. We treat some OM theory, particularly related to formulas of the
formula sheet (see BB: inventory management, bottleneck analysis, Littles formula). The
remainder of the class is used to practice some quantitative exercises on elementary operations
management/ supply chain topics you might want to apply in further classes and games (see
BB).
Guideline to Preparation
- Prepare the exercises posted on blackboard prior to coming to class. Some additional time
will be offered in class to make them.

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Class 4: Managing product variety
Case: Grolsch aligning manufacturing and marketing strategy
Lecturer: Prof.dr. M.B.M. de Koster
When: Tuesday, September 9, 2013, 9:00-11:45

Topic
We build on the analyses performed and insights obtained in the first session to deepen our
understanding of the role manufacturing plays in various supply chain management issues and
challenges, specifically related to managing product variety.
The Grolsch case serves as the metaphor to discuss the relevant issues. Grolsch, the second
largest brewery in the Netherlands, sees its operational performance degrading as a result of the
shift from market push to market pull. It responds to the required shorter and shorter lead-times
by the customers, particularly the supermarket chains, the shorter product life cycles and the
increase in product variety by stocking more and more, in order to be able to deliver in time.
Yet, its delivery performance is declining, its responsiveness is faltering, and the inventories go
literally through to the roof. Should Grolsch build or hire extra warehouse capacity, or are there
other ways to respond to these supply chain management challenges?


Preparation: Read Fishers paper and prepare the Grolsch Case. Update your knowledge of
the EOQ formula. Prepare the following questions:

1. What are the issues at Grolsch?
2. What are the reasons for Grolsch to carry such a large product portfolio?
3. Diagnose the difficulties for Grolsch to sustain its current product portfolio.
4. Do you agree with the claim that a changeover costs $800 each time?
5. Identify and evaluate the options to improve Grolsch performance.
6. Make a substantiated recommendation for improvement.


Literature
B M. Fisher (1997), What is the right supply chain for your product?, Harvard Business
Review, 75(2), 105-116.
B R. Suri (2000). Quick response manufacturing: a competitive strategy for the 21
st
century.
Quick Response Manufacturing 2000 Conference Proceedings, editor R. Suri, Society of
Manufacturing Engineers Press, Dearborn, MI 2000. (will be posted on BB after class)
B N. Kumar (2003). Kill a brand, keep a customer. Harvard Business Review, Dec. Can be
read afterwards
B Callioni, G., De Montgros, X., Slagmulder, R., Van Wassenhove, L.N., Wright, L. (2005),
Inventory-driven costs, Harvard Business Review, March. Can be read afterwards
B SIMCHI-LEVI, D., P. KAMINSKY & E. SIMCHI-LEVI, 2008. Designing and Managing
the Supply Chain, McGraw-Hill, 3
rd
edition, ISBN: 978-0-07-110750-1, Section 2.2 (EOQ)
Heizer, J., Render, B. 2011. Operations Management, Pearson-Prentice Hall, Upper Saddle
River, 10
th
edition, ISBN 0-13-511143-9. Ch.12, Ch.15, Ch.16


-


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Session 5: Understanding the impact of variability
Lecturer: Prof. dr. M.B.M. de Koster
When: Friday, September 12, 2013, 9:00-11:45

Topics
The first part of this class will serve as a debrief of the CEMS Productions game. The winning
team will present its strategy. In addition, the last team has to present their major lessons
learned.

This second part of the session builds on Class 2: Performance measurement and improvement
and introduces basic system dynamics and system physics. What happens to the performance of
a system if the supply of raw material varies? And what if the processing times vary? We use a
small example setting (the radio car assembly plant) to understand and assess the impact of
these sources of variability on the performance of an operating system.

Preparations
Read the paper of Schmidt and scan the reader on Deterministic performance estimation.

Literature
G.M. Schmidt (2005), Applicability of the OM triangle to health care, Excerpt from OMER
1(1), 87-103.
De Koster, Roodbergen, Deterministic performance estimation (can be read afterwards)
Heizer, J., Render, B. 2011. Operations Management, Pearson-Prentice Hall, Upper Saddle
River

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OPTIONAL EXERCISES
Self-test exercises on Quantitative OM exercises.

Around class 6 I will post a test on Blackboard of about 10 quantitative exercises (with
subquestions) on operations management topics related to supply chain management. The topics
are similar to the exercises treated in the exercise class (queuing, bottleneck analysis, inventory
management, reorder points, single-period inventory models, layout; or chapters 9, 12, Module
D of the book of Heizer and Render). The exercises are meant as self-practice and do not have
to be submitted.


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Class 6: Retail Operations Strategy and Operational Excellence
Case: Wal-Mart
Lecturer: Prof.dr. M.B.M. Koster
When: Tuesday, September 16, 9.00-11.45

Topic
Wal-Mart is the worlds largest company. In the words of Wal-Mart CFO Tom Schoewe, Wal-
Mart's 2003 sales are equal to "one IBM, one Hewlett Packard, one Dell computer, one
Microsoft and one Cisco System -- and oh, by the way, after that we got $2 billion left over."
Learning objectives
To understand the fundamental choices in company strategy and its impact on supply chain
strategy (1)
To understand the trade-offs to be made in this fundamental choice
Guideline to Preparation
1. View the documentary Is Wal-Mart good for America?, online accessible at
http://www.pbs.org/wgbh/pages/frontline/shows/walmart/. The documentary is not about
supply chain management per se, but it is an exemplary of the recent trends and
developments in the marketplace and how operations and supply chain management
strategy and practices (specifically in the areas of purchasing, manufacturing, distribution,
logistics) are tied in with corporate and marketing strategy. It shows the impact that global
supply chains have on business models, and as such it serves as a very rich (and
controversial) reference material.
2. Read the papers by Gue (2001) and Mohan Chandran (2003)
3. Prepare the following questions:
a. Define the core elements of Wal-Marts distribution and logistics systems (for the type
of core elements see the decision triangle on blackboard).
b. Explain how operations management/supply chain strategy contributed to Wal-Marts
competitive advantages.
Literature
B K. Gue, Crossdocking: just-in-time for distribution, 2001
B M.B.M. de Koster, J. Neuteboom, The logistics of supermarket chains, Elsevier,
Doetinchem, 2001. Chapters 1, 2 (developments), 5 (distribution), 6 (application at Albert
Heijn). ISBN 90 5439 106 5 (Chapter 4, 5 and 6 will be put on the Blackboard).
B P. Mohan Chandran, Wal-Marts supply chain management practices, ICFAI., 2003.
B Decision triangle (Distribution strategy decisions)
- SIMCHI-LEVI, D., P. KAMINSKY & E. SIMCHI-LEVI, 2008. Designing and Managing
the Supply Chain, McGraw-Hill, 3
rd
edition, ISBN: 978-0-07-110750-1, Ch.6, section 15.5.
(Partly) similar to 2
nd
edition, chapter 5
- Heizer, J., Render, B. 2011. Operations Management, Pearson-Prentice Hall, Upper Saddle
River, 10
th
edition, ISBN 0-13-511143-9. Ch.2

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Class 7: Supply Chain Planning and Execution
Case: Sport Obermeyer
Lecturer: Prof.dr. M.B.M. de Koster
When: Thursday 18 September 2014, 9.00-11.45

Todays case describes forecasting, planning, and production operations at Sport Obermeyer
and its supply partner. Sport Obermeyer, a high-end fashion skiwear design and merchandising
company headquartered in Aspen, Colorado, sells its products through U.S. department stores
and ski shops. Although the case company has a global supply network most of its critical
outerwear products are sourced through the Hong Kong based company Obersport, a joint
venture between Sport Obermeyer and a Hong Kong partner, who manages supply and
production operations in Hong Kong and China. The case introduces production planning
processes for short-life-cycle products with uncertain demand and allows you to analyze a
reduced version of the company's production planning problem. In addition, it provides details
about information and material flows that allow you to make recommendations for operational
improvements, including comparisons between sourcing products in Hong Kong and China. In
addition to the logic of the retail supply chain, we will discuss supply chain planning and
execution in general. For example, how new technologies including advanced planning systems
can support companies in dealing with demand and supply uncertainty, and how sales and
operations planning (S&OP) can create more value for the business.
Learning objectives
To discover how to match supply with demand for products with high demand uncertainty
and a globally dispersed supply chain.
To refresh your knowledge on inventory management concepts (e.g. the newsvendor
problem).
To understand the potential of sales and operations planning (S&OP).
Guideline to preparation
1. Prepare answers to the following study questions of Sport Obermeyer):
a. Using the sample data given in Table 2-20 (see SKS book!), make a recommendation
for how many units of each style Wally Obermeyer should order during the initial
phase of production. Assume that all ten styles in the sample problem are made in
Hong Kong, and that Obermeyers initial production commitment must be at least
10,000 units. (Ignore price differences among the styles in your initial analysis.)
Describe your analysis and explain your recommendation.
b. What operational changes would you recommend to Wally to improve performance?
c. How should Sport Obermeyer management think (both short-term and long-term)
about sourcing in Hong Kong versus China?
Literature
All papers mentioned below can be read afterwards
B M. Fisher, A. Raman & A. Sheen McClelland, 2000. Rocket Science Retailing is Almost
Here - Are You Ready?, Harvard Business Review, 78(4), 115-124.
B M. Muzumdar & J. Fontanella, 2006. The Secrets to S&OP Success, Supply Chain
Management Review, 10(3), 34-41.
B M. Fisher, J. Hammond, W. Obermeyer, A. Raman, 1994, Making supply meet demand in
an uncertain world, Harvard Business review May-June, 83-93.
B N. Rudi & D. Pyke, 2000. Teaching Supply Chain Concepts with the Newsboy Model. in
Supply Chain Management: Innovations for Education. (D.F. Pyke and M.E Johnson, eds.).
POMS Series in Technology and Operations Management, Volume 2, POMS
SIMCHI-LEVI, D., P. KAMINSKY & E. SIMCHI-LEVI, 2008. Designing and Managing
the Supply Chain, McGraw-Hill, 3
nd
edition, Chapter 2.

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Class 8: Demand Variability and Information Sharing
Case: Barilla SpA
Lecturer: Prof.dr. M.B.M. de Koster
When: Tuesday, 23 September 2014; 9:00-11:45

Topic
Suppliers plan their operations based on the demand information given by their customers in the
form of orders or other signals. Especially in multi-stage systems, however, a bullwhip effect
can distort the demand information and lead to tremendous inefficiencies when transmitted up
the chain. We discuss the bullwhip effect, its main causes and ways to tackle it. Moreover, the
benefits of information sharing in the supply chain context will be explored. It will be discussed
who benefits, how and why.
Todays case, Barilla SpA, is a classic one, and some of you may have discussed it in your
home university. It describes the challenges Barilla SpA, the largest pasta manufacturer in the
world, faced in the late 1980s. Barilla SpA sells its products to retailers largely through third-
party distributors and experiences widely fluctuating demand patterns from its distributors. The
case will help you to understand the issue of channel coordination, estimate the costs of poor
coordination, and assess collaboration initiatives in the supply chain context, to name a few.
Learning objectives
To recognize the sources of information distortion in the supply chain context.
To understand the benefits of information sharing.
To learn to estimate the business benefits of new technologies and visibility in the supply
chain context.
Guideline to preparation
1. Read the Barilla SpA (A) case (SKS, Ch.5) and prepare answers to the study questions
(p.152).
2. Read the literature indicated below and be prepared to discuss key learning points of the
articles.
Literature
B Lee, H., V. Padmanabhan & S. Whang, 1997. The Bullwhip Effect in Supply Chains, Sloan
Management Review, 38(3), 93-102.
B V.G. Narayanan and A. Raman (2000). Aligning incentives for supply chain efficiency.
Harvard Business School Note No. 9-600-110.
SIMCHI-LEVI, D., P. KAMINSKY & E. SIMCHI-LEVI, 2008. Designing and Managing
the Supply Chain, McGraw-Hill, 3
nd
edition, Ch.5.

18

Class 9: Soft management factors
Case: Gazogle (B)
Lecturer: Prof.dr. M.B.M. de Koster
When: Thursday, September 25, 2013; 9:00-11:45

Topic
In the class of today, we will apply the concepts learned in all previous classes to our small
company which manufactures Gazogles. You have to source materials, receive them, assemble
products, sell them to customers and make a profit. You have to turn your bleeding company
into a profitable one. You can apply any improvement method you like. It will show that not
only hard management factors play a role, but also more soft factors.
Guideline to preparation
Read (again) the article of Suri (2000) (class 4) and the material of class 1

Learning Objectives
Both OM/SCM techniques and soft factors contribute equally to company success.


Literature
B G.M. Schmidt, Applicability of the OM triangle to health care, Excerpt from OMER 1(1),
87-103, 2005
B R. Suri (2000). Quick response manufacturing: a competitive strategy for the 21
st
century.
Quick Response Manufacturing 2000 Conference Proceedings, editor R. Suri, Society of
Manufacturing Engineers Press, Dearborn, MI
B Hammer, M. (2007), The process audit, Harvard Business Review, April 2007, 111-123.
Can be read afterwards


19

Between the 9
th
and the 12
th
class your team will play the Supply Chain game

Assignment 3 (group).
All teams must submit a ppt slide presentation as hand-in report illustrating decisions
taken. Please take it with you at the class of 9 Oct. This report will be graded. The final
score achieved accounts for 10% of the grade. Further details of the assignment will be
posted on Blackboard.
The winning team will have the opportunity to present its strategy in session 6. The
team ending last will be asked to share the lessons learned.
Final scores will be announced on Blackboard.



20
Class 10: Purchasing and global sourcing
Case: Pick your own!
Lecturer: Dr. M. Akin Ates
When: Tuesday, 30 September, 2014, 9:00-11:45

Topics
Purchasing has developed from an administrative, clerical activity into a strategic business
function. Purchasing plays a key liaison role between external suppliers and internal
organizational customers in creating and delivering value to external customers. In an
increasingly international competitive environment, sourcing and supply management have
become global activities in many organizations. For multinational companies there can be
considerable value in coordinating purchasing & supply management (PSM) at the global level.
After a short general introduction of purchasing as a business function, we will focus on
international purchasing and global sourcing in the supply chain context. We will also discuss
the sustainability aspect of global sourcing.

Learning objectives
To understand the role of purchasing & supply management (PSM) in the organization
To understand the key concepts about global sourcing
To understand the specific challenges related to global sourcing

Guideline to preparation
1. Read the assigned literature and be prepared to discuss key learning points of the articles.
2. Pick your own!: Find an example from practice
2
where the advantages/disadvantages of
global sourcing or success/failure stories are discussed. Be prepared to discuss this example
during class.

Literature
B Kraljic, P. (1983). Purchasing must become supply management, Harvard Business Review
(Sept-Oct), 109-117.
B Trent, R.J. and Monczka, R.M. (2003). Understanding integrated global sourcing,
International Journal of Physical Distribution & Logistics Management, 33(7), 607-629.
B Hollos, D., Blome, C. and Foerstl, K. (2012). Does sustainable supplier co-operation affect
performance? Examining implications for the triple bottom line, International Journal of
Production Research, 50(11), 2968-2986. (optional)



2
A useful website is: http://www.supplymanagement.com/. You can also check general search engines.
21
Class 11: Supplier involvement in new product development (NPD)
Case: Thomas Medical Systems Outsourcing Policy (A)
Lecturer: Dr. M. Akin Ates
When: Thursday, 2 October 2014, 9:00-11:45

Topics
In the previous lecture we discussed tactical, operational, and strategic purchasing processes.
During this lecture we discuss one of the strategic purchasing processes in detail: supplier
involvement in new product development (NPD). In the first part of the lecture, we will discuss
the advantages & disadvantages of supplier involvement in NPD, examine some supplier
involvement models, elaborate on success factors, and finally comment on current trends/issues
on this topic. In the second part of the lecture, we will discuss the Thomas Medical Systems
Outsourcing Policy case (Individual Purchasing Assignment).

Learning objectives
To be aware of the different supplier involvement models
To understand the success factors in involving suppliers in NPD

Guideline to preparation
1. Read the assigned literature and be prepared to discuss key learning points of the articles.
2. Individual Purchasing Assignment: Read Thomas Medical Systems Outsourcing Policy (A)
case and answer the following questions:
a. What are the problems encountered in working with Wolfsberg Machine Werks on the
Tannhauser Project?
b. What are the requirements (and changes) for TMS to further implement supplier
collaboration in future product development projects?

Answer each question separately. You might consider referring to relevant, previous studies (in
addition to the ones mentioned below) to support your arguments. The total length of the
assignment must not exceed five pages. Use 11pt font size, and 1.5 line spacing. Submit your
assignment via the link on Blackboard (to be announced) by Thursday October 2
nd
, 9:00 A.M.
Please bring a soft/hardcopy with you to the class.

Literature
B Thomas Medical Systems Outsourcing Policy (A) case (link will be made available via
Blackboard)
B Wynstra, F. and ten Pierick, E. 2000. Managing supplier involvement in new product
development: A portfolio approach. European Journal of Purchasing and Supply
Management, 6(1), 49-57.
B Johnsen, T.E. (2009). Supplier involvement in new product development and innovation:
Taking stock and looking to the future. Journal of Purchasing and Supply Management,
15(3), 187-197.








22
Class 12: Supply Chain design and Tailor-made or standard?
Case: Supply Chain Game, Vanderlande Industries
Lecturers: prof. M.B.M. de Koster
When: Thursday October 9, 2014; 9:00-12:00
NOTE: this session is subject to changes. Final program to be determined
Check out Blackboard for details

Topic
We start with a debrief of the supply chain game. Two groups (the first and last teams) will
present their approach. In the second part of the class we discuss the Vanderlande Industries
case.
Vanderlande Industries produces tailor-made conveyor systems, adapted to the wishes of the
customers. In this they pursue a project strategy. However, this means its products are relatively
expensive. The opportunity arises to supply standard, cheaper, products. Should the company
switch from tailor-made to standard products, in other words, switch from a project to a product
strategy?

Guideline to preparation
1. Read the assigned literature and the case and be prepared to discuss key learning points of
the articles.
2. Prepare the following questions:
1. Should Vanderlande consider moving from a project to a product strategy?
2. What are the consequences for the different departments if Vanderlande would
standardize processes? Think of procurement, engineering, logistics, production and
finance.
3. Could services be combined with a standardized product offering? Think of
maintenance, spare-parts, performance support and of potential new services.
In your preparation, please look back into the frameworks of Frei (for handling variability in
services) and Fisher (dealing with uncertainty)

Literature
B VanderLande Industries. Parcel & Postal Predicaments, RSM Case Development Centre, 2014.
B F.X. Frei (2006), Breaking the trade-off - Between efficiency and service, Harvard
Business Review 84(11), 93-101.
B M. Fisher (1997), What is the right supply chain for your product?, Harvard Business
Review, 75(2), 105-116. Can be read afterwards



23



Class 13: Behavioral SCM and Q&A on all subjects
Lecturer: Prof.dr. M.B.M. de Koster
When: Tuesday, 14 October 2014; 9:00-11:45

Topic
The first part of this session is on behavioral operations/SCM. I present some research related
to: Can managers influence company performance? What is the impact of worker behavior on
company performance?
This second part of the session is non-compulsory and used for Q&A; you can ask anything
related to the subjects treated.

Literature (background reading)
B De Koster, M.B.M., D. Stam, B. Balk (2011), Accidents happen: The influence of
safety-specific transformational leadership, safety consciousness, and hazard reducing
systems on warehouse accidents, Journal of Operations Management 29, 753-765
B De Vries, J., De Koster, M.B.M., D. Stam (2014), Making the Right Pick: Aligning
Order Picking Methods, Incentive Systems and Regulatory Focus to Increase Picking
Performance, working paper, Rotterdam School of Management, Erasmus University





Open book EXAM
Monday 20 October 2014