© The Delos Partnership 2003 Learning how the supply chain works - using Toy Bricks ! The Supply Chain Exercise

© The Delos Partnership 2003 The Supply Chain Exercise Objectives: Demonstrate Supply Chain and ERP fundamentals Demonstrate impact of system integration on supply chain performance Objectives: Demonstrate Supply Chain and ERP fundamentals Demonstrate impact of system integration on supply chain performance

© The Delos Partnership 2003 The Supply Chain Exercise Your Brief: You are the supply chain decision makers responsible for delivering superior supply chain performance Your Brief: You are the supply chain decision makers responsible for delivering superior supply chain performance

© The Delos Partnership 2003 The Supply Chain Exercise Objectives: Maximise Customer Service Minimise Cost Objectives: Maximise Customer Service Minimise Cost Measures: Back Orders Inventory level & Factory Utilisation Measures: Back Orders Inventory level & Factory Utilisation

© The Delos Partnership 2003 The Supply Chain Exercise Customers Market 1Market 2Market 3Market 4 Warehouse A Warehouse B Factory Direct Shipment market

© The Delos Partnership 2003 The Supply Chain Exercise Exercise One Run for ten weeks Review performance Exercise One Run for ten weeks Review performance Exercise Two Run for ten weeks Review performance Exercise Two Run for ten weeks Review performance Make Changes

© The Delos Partnership 2003 The Supply Chain Exercise The Business Week –Sales order processing –Pick and confirm shipment –Run DRP/MPS/MRP –Ship to customer

© The Delos Partnership 2003 The Supply Chain Exercise The Week End –Arrange Shipment –Place Purchase Orders –Review Performance

© The Delos Partnership 2003 The Supply Chain Exercise Other Rules –Part orders/shipments are not allowed –Change Over time = 3 units lost capacity

© The Delos Partnership 2003 The Supply Chain Exercise Is this a robust Supply Chain? Is this a robust Supply Chain?

© The Delos Partnership 2003 The Supply Chain Exercise What went wrong?

© The Delos Partnership 2003 The Supply Chain Exercise What changes would you make ?

© The Delos Partnership 2003 The Supply Chain Exercise Lessons learned?

© The Delos Partnership 2003 The Supply Chain Exercise Suggested Changes –Adjust DRP/MPS/MRP inventory parameters –Synchronise system runs –Consolidate Freight forwarding –Match supply to forecasted demand

© The Delos Partnership 2003 The Supply Chain Exercise Major Messages –Demand supply visibility impacts supply chain performance –Management Policies impact supply chain performance –Communication is key

© The Delos Partnership 2003 The Supply Chain Exercise “If demand is transmitted along a series of inventories using stock control ordering then the amplitude of demand variation will increase with each transfer” (Burbridge/Forrester - Law of Industrial Dynamics)