Supply Chain Management Plan
Prepare 10-12 PowerPoint slides to present a supply chain management plan, including your analysis and recommendations for a supply chain design and logistics, for a provided scenario or business of your choice.
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Introduction
This portfolio work project, a presentation of a supply chain management plan, will help you understand how supply chains and logistics create value for a company.
Scenario
For this assessment, choose either Option 1 or Option 2. You do not need to do both. Both options will be graded using the same scoring guide.
Option 1
Wild Dog Coffee Company, a locally owned company with a single coffee shop location, serves a wide selection of espresso products, small breakfast and lunch menu items, and a limited evening menu. The company is planning to expand the business by adding an additional location. While different menu items may be tested at the new location, the espresso beverage preparation process will remain exactly the same. You and your business partners need to make a decision about the supply chain before the move. The following information may help support your analysis for Wild Dog Coffee Company:
You have one espresso maker that brews the espresso and froths the milk at each location.
Each espresso beverage requires 1.5 minutes of the barista's time.
Each espresso beverage requires some combination of espresso beans, milk, and flavoring.
Each espresso beverage is served in a paper cup with a lid and sleeve.
Monthly cleaning and maintenance of the espresso maker is outsourced to a services company.
You stock one type of espresso bean. If you run out of inventory, you have to close the business until the next shipment of beans arrives.
Espresso beans are received seven (7) days after placing the order.
Option 2
If you chose Option 2 for Assessment 1 and 2, use the same business for this assessment, or select a different business. Note that it is recommended that you use the same business for each assessment in this course, using the following criteria for your selection:
The company fits the assessment requirements and you have access to the information needed to complete the assessment.
The business information is disclosed in the assessment for faculty's reference.
You can distribute the business data without disclosing confidential information.
Contact faculty with questions.
Your Role
Option 1
You are an owner of Wild Dog Coffee Company. You and your business partners are preparing for the opening of your second location. You need to analyze and make recommendations for supply chain management for the two locations.
Option 2
Your boss, a director, has tasked you with a supply chain management project. She is relying on you to prepare an analysis and recommendations for demand management that can be presented to the executive team of the company.
Sample Solution
This plan outlines a comprehensive approach to demand management for Wild Dog Coffee Company, including forecasting, inventory control, and scheduling strategies. The aim is to optimize resources, minimize operational costs, and ensure customer satisfaction in preparation for the expansion to a second location.
1. Assessing the Impact of Advertising:
Based on the provided information, it is essential to analyze the historical data relating to advertising expenditures and espresso bean consumption. This analysis can be conducted using a simple linear regression model to explore the correlation between these variables. By interpreting the slope and R-squared values, we can determine the strength and direction of the relationship.
Full Answer Section
- Forecasting: A Case Study with Espresso Beans:
- y = Predicted pounds of espresso beans
- x = Advertising expenditure in dollars
- a = Intercept (y-axis value when x = 0)
- b = Slope coefficient (representing change in y for every unit change in x)
- Strength of Correlation: A high R-squared signifies a strong positive correlation, indicating advertising drives higher bean consumption. For instance, a 0.8 R-squared implies 80% of espresso bean usage variation is explained by advertising.
- Predictive Capacity: The slope coefficient (b) tells us how much espresso bean demand increases for each additional dollar spent on advertising. By plugging in the desired advertising budget for month 7 ($1,350), we can predict the corresponding espresso bean requirement.
- Average Daily Demand: By dividing the forecasted monthly bean consumption by the number of open days, we can estimate the average daily demand.
- Advertising Efficiency: Analyzing the model can tell us if increasing advertising is cost-effective in terms of additional bean sales.
- Strategic Decision Making: Armed with these insights, Wild Dog can fine-tune their advertising budget allocation and optimize promotional efforts for maximum return on investment.
- Inventory Management Strategies:
- Pros: Simple to implement, minimizes ordering costs by placing larger orders at predetermined intervals.
- Cons: Requires accurate demand forecasting, risks stockouts if demand spikes or forecasts are inaccurate.
- Pros: Maintains a desired inventory level by ordering new stock when it reaches a predetermined reorder point (ROP). Adapts to fluctuating demand.
- Cons: Requires frequent monitoring, might lead to more frequent orders with higher transaction costs.
- Due to limited storage space and capital constraints, ROP with a buffer stock might be preferable. This balances responsiveness to demand fluctuations with inventory cost optimization.
- Regularly re-evaluating the ROP based on updated demand forecasts is crucial for maintaining efficient inventory levels.
- Implementing safety stock procedures to mitigate the risk of stockouts during unexpected demand surges.
- Scheduling and Capacity Planning:
- Analyze hourly, daily, and weekly demand patterns to optimize staff scheduling and resource allocation.
- Identify peak and off-peak periods to ensure adequate staff availability during busy times.
- Cross-train employees to ensure flexibility and coverage during unexpected demand changes.
- Monitor equipment capacity and plan potential maintenance or upgrades to avoid disruptions during high-demand periods.
- Conclusion and Recommendations: