1. What were the main lessons that you got from the Airbus video and the subsequent discussion?
The main issue that the airbus video illustrated is how many parts where constantly being shipped in from different parts of the world and assembled on a relatively fast basis at their headquarters in Toulouse. First when watching the video we can clearly identify that nothing is really being produced in the supposed place “of production”, rather just assemble all of the incoming pieces to allow for a relatively fast production rate.
What resulted from the video is the identification of the reasons why and why not to have inventory as the video illustrated a lack of stock in production.
The game where each different station in the production process gives its estimates (that are mostly wrongful guesses) of what will be needed for production only increases the gap between forecasted and actual (bullwhip). The beer game is bound to make you wrong by fluctuating once or twice its demand level and remaining constant throughout the game, something that also cannot be real, and by doing so obliges you to stock some products in Lou of the expected fluctuation. In a supply chain that focuses strictly on information gathered by only one division of the team rather than a full transparency between all the different processes is bound to be mistaken and so cannot be blamed on the student’s performance or efforts.
3. No team in SILOG reached a service level of 100%. Comment about the causes of this fact.
No team in SILOG reached a 100 % service value as none of us where able to estimate how much investment is needed in order for our plant to function at a 100 % capacity due to our lack of understanding of the product and order variations that we were inputting in the system.
That lack of comprehension is mirrored by not fully grasping how much is needed for this specific predetermined demand quantity and the inventory forecast associated with it that could optimally use the factory resources to its best capabilities.
Difficulties in estimating demand and safety stock misassumptions were the main factors.
4. Using the historical demand data of the SILOG and the methodology of linear regression, do a forecast for weeks 1 to 7. Compare your results with the actual average demand your team faced in SILOG during the seven weeks we played.
Forecasted demand |400 |421,98 |466 |417,58 |571,82 |416,22 |465,58 |512,5 | |real demand |400 |434 |489 |466 |586 |442 |383 |238 | |
As we can see both figures are relatively close except for some differences in the last 2 weeks due to a lack of available SS and goods. (Mistake by our group)
5. What were the main lessons that you got from the Hewlett-Packard case and the subsequent discussion?
The Hewlet Packard case identifies a product that requires several sub-Assembly parts from multiple locations with a costing structure that is low priced with a high quality pay back that is even customizable to the end user. The plants that produce the product involved (printers) are focused on inventory reduction with a high volume production (merging of plants). The problem that the company was facing in the case study is that some of its DC’s(distribution centers) in Europe were facing stock outs and overstock, where the suggested solutions by the managing teams were as follows:
• Opening a production plant in Europe (too expensive and time consuming)
• Improve forecasting (unreal)
• Decrease lead time by air dispatches ( very expensive and so not sustainable)
• Increase the safety stock ( also very risky and may result in losses at points)