Attempt all the problems.
problem1) A supply chain encompasses three important flows. What are these three flows? Why are they significant to effective supply chain management? Describe the direction of these flows.
problem2) Logistics comprises the relatively large number of managerial activities. describe five of these activities and why they are significant to logistics systems.
problem3) What do you mean by Bull Whip Effect? In which ways could the effect of Bull Whip effect be reduced in supply chain?
problem4) What are the basic types of traditional forecasts? Do collaborative planning, forecasting and replenishment differ from these traditional approaches?
“We have to do something about our customer service levels and out inventory turns” complained Lisa Williams, CEO for Walton Seed Company, to Jason Greaser, new director of logistics. Jason immediately wanted to know details of problem, since he had just joined Walton Seed and had not had the opportunity to really delve into any of its problems. Lisa responded, “Let me give you some of the background and you could put that education to use that you received at Penn State”.
Jason smiled and said,” I am really interested in addressing some of main problems and issues that Walton Seed has in the logistics area, so I could put my education and experience to good use. We had the similar problem at CBL Electronics, where I did my internship. While I realize that products are different, there might be some common threads.”
Walton Seed Company was founded by Eric Walton in Toledo, Ohio, and subsequently moved to York, Pennsylvania. Traditionally, Walton’s niche was the high quality seed company selling grass, flower, and vegetable seeds through the mail-order catalog. But it subsequently started to distribute through small, family owned hardware and variety stores. As a business grew, company expanded it distribution to number of smaller wholesalers, who gave Walton extra market coverage in Ohio, Indiana, Illionois, and New York. Walton still continued its catalog business in Middle Atlantic States and served retailers directly in Penssylvania, Maryland and New Jersey.
Seed business is such that sales are traditionally very heavy in spring and early summer and drop off dramatically for the rest of the year. Catalog sales help to spread out demand a little by making sales promotions in January / February mailing when people start thinking “spring” to help get through the winter; but, overall, sales are still very concentrated. Hence, Walton pushes inventory out into its warehouse during fall and winter to be ready for big spring and summer sales spurt.
During season, company runs out of certain types of seeds and has the abundance of others. Wholesalers and retailers complain about stockouts. Sometimes they would accept substitutions but not often sufficient. Wholesalers and retailers don’t provide in- season sales information and tend to buy large quantities prior to start of the season.
Another matter worrying Lisa Williams is the decline in the number of independent hardware and variety stores, with the growth of Wall-Mart, Home Depot, Lowe’s and others of similar size. Walton doesn’t sell to these stores, directly or indirectly, as Walton has positioned itself at a higher end of the market with high quality seeds.
Walton really wishes to increase its late summer and fall sales of grass seeds and prrennial flower seeds, to spread out demand and also to avoid stockouts that result in lost sales and customers.
“Well Jason, there you have it in a nutshell,” said Lisa. “It is the exasperating situation, and we need your help in solving these problems.
‘Wow, you are right!” replied Jason, “There are really challenging issues; I will not be able to claim that you did not give me anything significant to sink my teeth into. Do you have anything specific which you want me start with, since this is such a comprehensive set of problems?
problem5) Case problems:
a) How could we improve in-season sales forecasting and develop a logistics system which is more responsive to demand and sales?
b) What are some of the special logistical issues which we would need to consider if we attempt to sell to the mass merchandisers?
c) What standard of performance must we use for measuring customer service?
d) What E-commerce alternatives do you feel must be considered.