Task 1: Supply Chain Simulation Reflective Report
Introduction
The supply chain simulation has been an excellent opportunity for the better application of theories and models. This real-world simulation has helped me understand the supply chain dynamics and set the foundation for better practices. It is essential to reflect on the decision-making process and present some critical reasons for my decisions. Designing, forecasting, and manufacturing always require vital decisions, and giving these in the boardroom is critical. The adequate reflection regarding each year is as follows.
Year 1
I have navigated possibilities in the design room in multiple ways. Demand was predicted by team members, along with my insights, based on profitability, margins, and possible impact. The most important thing for me was to see the larger picture and set the foundation for effective forecasting instead of concentrating on communication. The significance of demand has been in the limelight. For instance, there have been standard deviations, insights from team members, and average calculations, which led to well-informed decisions (Ma, Li, Tong, & Feng, 2023). I selected the "stylish" option in the first year despite some uncertainties in demand. "Far Far" away was the best option due to the low cost and excessive production capacity. The probability of the supplier's stock out was high, but I managed to predict adequate profitability this year.
Year 2
I selected the extended storage capacity in the 2nd year. It was a wise decision because customers have strived for more storage after preferring the style of the phone. Profit margin remained high with the limited deviation. However, it was essential for me to derive insights from past experiences and reduce the consequences of demand uncertainties. The most important thing was to evade the excessive inventory, as remaining exact or close to demand from the perspective of production is the best approach. The literature streamlined the probability of overproduction and stockouts (Peng, Zhao, & Dai, 2023). The decision related to the supplier remained in this year because of production capacity. Thus, evading the risk of the stockout was vital for me, as I was sure about the demand for the high storage models.
Year 3
I selected an extended battery in the third year. It was also one of the best decisions based on the changing demands and effective forecasting. I agree with Matheo and Ankit's suggestions about demand and capacity. The concept of uncertainty identification emerged because I predicted that people might prefer substitutes or alternatives due to less battery power. High battery power is a new trend in the mobile phone industry and is shaping demand. The little shift in the supplier strategy was evident due to insights derived from the board meeting. However, the decision to go with the expected demands and extended battery performance was significant. The risk of stockouts was probable, but compromising the quality of the battery could not be afforded. The company has decided to keep its profit margins low to concentrate on quality and acquire more customers. It is the best way to move forward in the competitive mobile phone industry. Extended battery decision also requires excellent and sustainable relationships to focus on quality. Internally, the intention was to keep the cost low, and it influenced the decisions related to supplier selection (Kim & Chung, 2022).
Year 4
I have predicted the excessive demand for audio quality and camera quality. It was alarming for me because it would require excessive investments in production to improve the quality of these two essential aspects (Kwak, Young-Joon, & Mason, 2018). However, the decision was rationalized by two of the team members because the market potential was high with the decreasing standard deviation. Interestingly, the demand was not unknown because people striving for high-quality cameras and audio are predictable. The decision to keep the profit margins low is to acquire a new customer base that aims for high-quality cameras and audio. Ankit and Matheo provided valuable recommendations to me as far as the demand for high-quality cameras and audio. Also, I obtained good insights from others' suggestions about the possible issue change due to the probability of the high cost and low margins. But I think it is the best time to make bold decisions to enhance competence in the mobile phone industry instead of just striving for excessive profitability. Once the customer base is set regarding style, storage, battery, and camera, improvisation in the design, production, and supplier strategy must be maintained (Chopra & Meindl, 2016).
Conclusion
Eventually, this simulation highlighted profitability in all four years. However, I am aware of the reduced profitability after the first year. In this unpredictable mobile phone market, taking significant risks based on estimates is an excellent way to get a high return in the coming years. This simulation provided me with the best experience. There may be some things that could be improved in strategic decision-making. Of course, profitability would have been enhanced with the possible changes in the strategic decision. So far, this simulation has been a wonderful experience as far as the understanding of global supply chain dynamics is concerned.
Task 2: Critical Analysis of Supply Chain Process (Adidas)
Company Overview
Adidas is one of the prominent German athlete apparel and footwear organizations. It has become one of the biggest sportswear manufacturers in Europe. The company was founded in 1924 (Walter, 2021). The firm deals with footwear, apparel, sportswear, sports equipment, and toiletries. The firm has been in the limelight due to rapid product development and market expansion, which set the foundation for excessive growth and a competitive advantage in the industry. The firm has gained and sustained its brand image and identity due to its cutting-edge products for customers around the globe. The big reason behind the success of the organization is its incredible supply chain function. The supply chain is well-optimized and resilient, becoming one of the critical reasons for success and advantage. The firm has managed its logistics and whole supply chain function, especially from sourcing to distribution (Cordón, Hald, & Seifert, 2013).
However, it is essential to navigate the firm's supply chain strategies, notably the logistics domain, to derive valuable insights. The most important thing is conducting a critical analysis of the logistics process, understanding issues or problems, and presenting solutions that are backed by the supply chain theories and principles.
Supply Chain Strategies
The company has effective supply chain strategies. Strategic sourcing is one of the critical supply chain strategies, which is associated with extensive global networks, long-term partnerships, and sustainable sourcing. For instance, the company has maintained partnerships with many factories globally. This vast international network has become the source of diverse materials, cost-effectiveness, and modern technologies. Long-term partnerships with suppliers are the critical strategy, as the intention is to standardize its premium products at the global level as far as quality and differentiation are concerned. The firm has strived for sustainable sourcing, as streamlining the ethically sourced material has been prioritized. Sustainability has been justified in the form of fair wages, equality, and transparency. Demand forecasting is one of the best supply chain strategies of this organization. The firm uses modern or advanced analytics to predict demands, trends, and customer behavior. It is all about evading the probability of overproduction and stockouts. There have been seasonal variations, and the firm's supply chain has been incredibly resilient to becoming relevant. The planning function has been collaborative in the supply chain function. The participation of suppliers and distribution partners in forecasting is the best consideration for moving forward. Product design has been integrated with modularity and agility, which makes the adjustments highly probable. Establishing the production factories (facilities) close to markets is also a good strategy. Still, the firm has maintained the right balance as far as the production capacity and demand are concerned (Lau, Ng, & Acevedo, 2019).
Critically Analyzing the Logistics Process: Problems and Reasons
Adidas has an adequate supply chain function due to practical strategies and tactics. However, the logistics function has stumbled due to multiple reasons. A brief critical analysis of this logistic function follows.
Complicated Global Network
The global network has become complicated for the organization in multiple ways. For instance, there have been many vulnerabilities in the supply chain. Diverse facilities around the globe usually stumble due to political instability, natural disasters, and labor strikes. The disruption in supply and production has become routine. Of course, factories operating in multiple countries must adhere to the local dynamic. There have been numerous challenges related to quality management. Despite the vast network of factories around the globe, it has been challenging to maintain the quality, leading to variations in standards. Inconsistencies in production are one of the significant challenges, and they can lead to customer dissatisfaction and competitive disadvantages (Sharma, Kumar, Borah, & Adhikary, 2022).
Inaccurate Demand Forecasting
Demand forecasting needs to be more effective and accurate. There have been many unforeseen events, leading to stockouts and overproduction. The company is using modern forecasting models for better prediction, but uncertainties or unexpected events have been the problem. Adidas has stumbled due to inaccurate predictions, leading to possible fluctuations in order. There have been several imbalances and inefficiencies in inventory. It indicates the bullwhip effect and wrong forecasts have become the main drivers of this problem (Mangan, Lalwani, & Calatayud, 2020).
Depending on Advanced Technologies
The company heavily depends on the advanced technologies in its logistics system. It makes the organization highly vulnerable as far as the probability of cyberattacks is concerned. The logistics system contains sensitive data, and any breach can be a disaster for the organization. Apart from that, it has been challenging to get along with the logistics partners. Seamless integration has become critical when interacting with logistics partners to evade delays, excessive costs, and inefficiencies (Pérez-Morón, 2022).
Balancing Cost & Speed
It is challenging to create and maintain the perfect balance between cost and speed in the logistics system. For instance, Adidas strives for rapid delivery, probably through airfreight. Nonetheless, it is always costly. So, maintaining the balance between speed and affordability has remained a big paradox. Fluctuations in fuel prices are also one of the daunting issues, creating an impact on the cost of transportation (Anes, Abreu, Dias, & Calado, 2022). Hence, the firm cannot be specific about its shipping approaches or strategies as far as the changes in fuel prices are concerned. For example, Adidas may increase shipping fees due to the sudden rise in oil prices in many regions. It indicates the influence of the external aspects on logistic dynamics (Proud, 2023).
Optimization of Transportation Routes
Optimization of transportation routes has been problematic for this organization. As discussed, Adidas uses air freight or long-distance seaways as far as global distribution is concerned. Unfortunately, it is leading to excessive carbon emissions, hitting the firm's sustainability objectives. Finding alternative routes is challenging due to the probability of high costs. This dilemma remained for the organization for many years. Disruption in transportation routes has been in the spotlight due to political escalation, mainly in the United States and China. Adidas has stumbled due to rising shipping costs due to this political escalation (Associated Press, 2023).
Efficiency of the Distribution Centers
Preserving the efficiency of the distribution centers has been a significant paradox for the organization. Concerning inventory management and location, the firm usually needs to catch up on several opportunities due to understocking and overstocking. The vast distribution structure is challenging to handle in this context, and it has been problematic for the organization. The critical assumption is that the firm must integrate with advanced technologies to enable automation and efficiency. However, substantial investments in distribution facilities are required, which can make financial constraints probable. Adidas established an automated distribution center or facility in Suzhou, China, to evade these issues. Making this distribution channel a model was the right approach, but investing in numerous facilities is still a paradox (Footwearnews.com, 2023).
Delivering in a Sustainable Way
Delivering sustainably is an issue in the logistics system. The last mile emission is in the spotlight, which challenges the firm's sustainable commitments and goals. The firm would concentrate on electric vehicle deliveries to evade the negative impact on climate. Reverse logistics is also problematic, as the organization would have maintained efficient and effective measures. Adidas' return process could have been more convenient, leading to excessive waste and a negative impact on the environment (Balassa, Koteczki, Lukács, & Buics, 2023). For example, the firm has built a partnership with suppliers based on some measures. The company measures its supply regarding energy efficiency, on-site energy consumption, coal elimination, and renewable energy sourcing (Cosgrove, 2020)
Presenting Solutions
Balancing cost and speed is possible if the organization comes up with hybrid delivery options. There is a need to build alliances or partnerships with the local or regional hubs to enable rapid deliveries. There is a need to utilize the standard freight (sea), mainly when it comes to the less time-sensitive shipments. It is all about balancing delivery with affordability. Activity-based costing is the relevant theory that can facilitate the organization's quantifying shipping variations. It will lead to informed decisions related to pricing. The value chain management concept is also apparent as far as excessive optimization is concerned. This optimization can facilitate supply chain management to create the perfect balance between customer satisfaction and cost savings (Xu, Niu, & Cai, 2020).
Optimizing transportation routes is a good solution, and using multimodal transportation is essential. It is crucial to adopt advanced software related to route optimization. It is all about enabling sustainable and efficient routes in real-time. The critical assumption is that the firm must enhance its collaboration with the regional partners (logistics) to navigate the alternative production and sourcing options. It is all about evading the probability of the long transformation needs. The concept of green supply chain management is critical, making the organization incorporate sustainability in its logistics system. Of course, bullwhip effects can also be reduced or eliminated with the new sustainability measures (Prause & Olaniyi, 2023).
The firm needs to use advanced demand forecasting and inventory systems. The most important thing is to enhance the optimization of stocks in every distribution facility. Adidas needs advanced systems such as robots and retrieval systems for rapid fulfillment and fewer errors. The management may also invest in the digital domains, especially in digital twin simulation, to test and incorporate relevant warehouse processes and layouts (Kajba, Jereb, & Obrecht, 2023). Lean manufacturing can be an excellent principal approach that can help to evade waste and optimize the whole process. Just in time, inventory must become more progressive to reduce the stock levels. However, the critical assumption is that the firm must ensure the availability of the products (Henry, Christensen, & Brau, 2023).
It is the best time to build partnerships with companies that offer electric cargo. Incorporating circular economic principles is the right approach to maintaining or ensuring sustainable deliveries (Caldeirinha, Felício, & Pinho, 2023). For instance, the firm can contain the closed-loop supply chain function, as the intention should be to improve and enhance resource recovery and waste minimization (Oh & Jeong, 2014).
Global network complexity is one of the significant issues or challenges for the organization. The company can evade this issue by aligning it with a regional hub. Instead of just concentrating on very far suppliers, the firm needs to be close to markets. It is all about eliminating the reliance on long distances. Localization is the best concept in this context, and the management should apply it by aligning with the regional hubs. Supplier diversification has become one of the viable options for the company. As discussed, the firm has been specific with its suppliers. However, a multi-supplier approach must become a reality to reduce the probability of possible disruptions (Ventura & Lu, 2023).
Adidas can eliminate the issue of forecasting inaccuracy by incorporating the three W's (what, where, when). For instance, relative to "what," the management needs to concentrate on granular prediction or forecasting, notably when it comes to specific products and regions. It is all about integrating with seasonal trends, local attributes, and new styles. Concerning "where," the supply chain management must conduct the geospatial analysis along with the combination of market intelligence (Yani & Aamer, 2023). The most important thing is to comprehend the regional changes or variations, mainly in demand. It will facilitate adopting adequate production, distribution, and overall logistics approaches. Eventually, relative to "when," SCM can incorporate the advanced statistical model. It is best to use artificial intelligence tools to make demand forecasting incredibly accurate. These advanced tools will help the organization identify future weather conditions, possible demand fluctuations, and many other aspects. Thus, the application of these critical aspects can be the best solution to eliminate the issue of forecasting accuracy (Sumanasena, et al., 2023).
Conclusion
It concludes that Adidas has the potential to eliminate issues in its logistics system and set the foundation for effective outcomes and resilience. This detailed critical analysis has streamlined issues and problems related to Adidas's logistics system along with many insights and implications. Global distribution complications, forecasting inaccuracies, distribution efficiency, and transportation route optimization have been some potential issues. The management has been aware of these challenges or problems, and it has also shown its commitment to moving forward. This critical analysis also optimized some excellent solutions for the organization. Appropriate theories and real-world examples have been embedded to support this analysis. These strategies or solutions should remain the same for the organization. Instead, the organization must show its resilience and make some changes in these solutions or strategies to move forward. Becoming relevant in this dynamic business landscape is the best way, and Adidas must strive for it with possible and pertinent changes in its logistics and overall strategies.
References
Anes, V., Abreu, A., Dias, A., & Calado, J. (2022). A Reputational-Risk-Based Match Selection Framework for Collaborative Networks in the Logistics Sector. Sustainability, 14(7), 4329. doi:https://doi.org/10.3390/su14074329
Associated Press. (2023, December 28). Adidas and Apple may be looking to leave China, but McDonald’s and Starbucks are expanding. https://www.fastcompany.com/91003553/adidas-and-apple-may-be-looking-to-leave-china-but-mcdonalds-and-starbucks-are-expanding
Balassa, B. E., Koteczki, R., Lukács, B., & Buics, L. (2023). Sustainability Aspects of Drone-Assisted Last-Mile Delivery Systems—A Discrete Event Simulation Approach. Energies, 16(12), 4656. doi:https://doi.org/10.3390/en16124656
Caldeirinha, V., Felício, J. A., & Pinho, T. (2023). Role of Cargo Owner in Logistic Chain Sustainability. Sustainability, 15(13), 10018. doi:https://doi.org/10.3390/su151310018
Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.
Cordón, C., Hald, K. S., & Seifert, R. W. (2013). Strategic Supply Chain Management. Routledge.
Cosgrove, E. (2020, October 5). Adidas coaches its suppliers in the sustainability marathon. https://www.supplychaindive.com/news/adidas-supplier-emissions-sustainability/586373/
Footwearnews.com. (2023, September 1). Adidas Opens New Distribution Center in China Powered by Robots. https://footwearnews.com/business/business-news/adidas-distribution-center-china-robots-1203525277/
Henry, J. J., Christensen, P., & Brau, J. C. (2023). Interrelationships in Inventory Turnover Performance Between Supplier and Customer Firms. Business and Economics Research Journal, 14(2), 157-171. doi:https://doi.org/10.20409/berj.2023.410
Kajba, M., Jereb, B., & Obrecht, M. (2023). Considering IT Trends for Modelling Investments in Supply Chains by Prioritising Digital Twins. Processes, 11(1), 262. doi:https://doi.org/10.3390/pr11010262
Kim, S., & Chung, K. (2022). Optimization of Capacity Allocation Models with Effort Dependent Demand in Global Supply Chain. Sustainability, 14(3), 1375. doi:https://doi.org/10.3390/su14031375
Kwak, D.-W., Young-Joon, S., & Mason, R. (2018). Investigating the relationship between supply chain innovation, risk management capabilities and competitive advantage in global supply chains. International Journal of Operations & Production Management, 38(1), 2-21. doi:https://doi.org/10.1108/IJOPM-06-2015-0390
Lau, Y.-y., Ng, A. K., & Acevedo, J. (2019). Principles of Global Supply Chain Management. Anthem Press.
Ma, X., Li, M., Tong, J., & Feng, X. (2023). Deep Learning Combinatorial Models for Intelligent Supply Chain Demand Forecasting. Biomimetics, 8(3), 312. doi:https://doi.org/10.3390/biomimetics8030312
Mangan, J., Lalwani, C., & Calatayud, A. (2020). Global Logistics and Supply Chain Management. John Wiley & Sons.
Oh, J., & Jeong, B. (2014). Profit Analysis and Supply Chain Planning Model for Closed-Loop Supply Chain in Fashion Industry. Sustainability, 6(12), 9027-9056. doi:https://doi.org/10.3390/su6129027
Peng, J., Zhao, Y., & Dai, L. (2023). Equilibrium Strategy of Production and Order in a Two-Echelon Supply Chain with Demand Information Updates and Capacity Restriction. Mathematics, 11(23), 4767. doi:https://doi.org/10.3390/math11234767
Pérez-Morón, J. (2022). Eleven years of cyberattacks on Chinese supply chains in an era of cyber warfare, a review and future research agenda. Journal of Asia Business Studies, 16(2), 371-395. doi:https://doi.org/10.1108/JABS-11-2020-0444
Prause, G., & Olaniyi, E. O. (2023). Optimizing Voyage Costs in Maritime Supply Chains: A Holistic Approach Towards Logistics Service Improvement and Supply Chain Finance. Transport and Telecommunication, 24(4), 361-374. doi:https://doi.org/10.2478/ttj-2023-0028
Proud, A. (2023, December 15). The Impact of Rising Fuel Prices on Logistics and Delivery Services. https://www.searates.com/blog/post/the-impact-of-rising-fuel-prices-on-logistics-and-delivery-services#:~:text=Escalating%20fuel%20costs%20have%20the,the%20unpredictability%20of%20fuel%20expenses.
Sharma, A., Kumar, V., Borah, S. B., & Adhikary, A. (2022). Complexity in a multinational enterprise’s global supply chain and its international business performance: A bane or a boon? Journal of International Business Studies, 53(5), 850-878. doi:https://doi.org/10.1057/s41267-021-00497-0
Sumanasena, V., Gunasekara, L., Kahawala, S., Mills, N., De Silva, D., Jalili, M., . . . Jenni. (2023). Artificial Intelligence for Electric Vehicle Infrastructure: Demand Profiling, Data Augmentation, Demand Forecasting, Demand Explainability and Charge Optimisation. Energies, 16(5), 2245. doi:https://doi.org/10.3390/en16052245
Ventura, J. A., & Lu, Q. (2023). Optimizing Supplier Selection and Order Lot-Sizing Decisions in a Two-Stage Supply Chain. Axioms, 12(7), 615. doi:https://doi.org/10.3390/axioms12070615
Walter, M. (2021, August 3). The History Of Adidas: A Background Of Collaboration And Innovation. https://www.gameplan-a.com/2021/08/the-history-of-adidas-a-background-of-collaboration-and-innovation/
Xu, S., Niu, J., & Cai, X. (2020). Optimize Logistics cost model for shared logistics platform based on time-driven activity-based costing. Journal of Physics: Conference Series, 1437(1). doi:https://doi.org/10.1088/1742-6596/1437/1/012115
Yani, L. P., & Aamer, A. (2023). Demand forecasting accuracy in the pharmaceutical supply chain: a machine learning approach. International Journal of Pharmaceutical and Healthcare Marketing, 17(1), 1-23. doi:https://doi.org/10.1108/IJPHM-05-2021-0056
MO9528 Assignment Brief
This assignment weighs for 100% of the overall mark for this module and includes TWO different tasks. ALL two tasks must be completed and have separate marking share. Each task MUST also be presented under a separate heading, but ALL Two tasks MUST be submitted as one single document of the coursework.
The assignment MUST have a title page. This title page must include the Student’s full name, ID number, the programme name, the module name, the module code, the module tutor name and the word count per task.
This coursework MUST be submitted electronically through Turnitin Software. The similarity, plagiarism, collusion or any other types of the academic misconduct will be evident through this software.
You are allowed to submit one draft copy of your assignment at any time during the semester and before the deadline submission date. You MUST submit the final version of your coursework before the submission deadline. Any late submission is subject to the Northumbria Assessment Regulations Act about the late submission. You can refer to the late submission section below.
Marking Structure (based on 100% marking)
Task 1: 30%
Task2: 60%Structure: 10%
Task 1 – Supply Chain Simulation Reflective Report (Max 750 words) (30% Mark)
Based on the Global Supply Chain Management Simulation V2 in seminars, write a reflective report to review your decision process in the simulation. Your reflection should show the rationale of your decision and good practices as well as lessons learnt from the simulation. How did you apply the theories and principles in the module should also be discussed in your reflection. You need to use literature (references) in your analysis stage of your reflection to provide in-sight how you could improve your decisions and make informed decisions. You can also use theories and principles that you learn in the lectures and seminars/workshops. Reference to at least 5 relevant and recent peer reviewed article/books needed.
Task 2 – Critical analysis of a company’s supply chain process (Max 1750 words) (60% Mark)
In the module, we have studied the logistics and supply chain processes. Now, suppose you are the supply chain manager of a company you are familiar with (chosen by yourself), critically analyse the company’s logistics process in its supply chain and discuss how would you apply the theories and principles learnt in this module to improve the supply chain performance. You are expected to analyse the whole logistics process first, and then to identify key current issue(s) or problem(s) in the company’s logistics, find out the reasons causing the problem(s) and propose appropriate solutions. Theories and principles learnt in lecturers and seminars should be applied to the selected company to justify your analysis. In addition, the critical analysis should be underpinned by up to date peer reviewed academic journal articles (at least 15) and examples and cases (not limited to the selected company).
- 10% of the marks are assigned to the presentation of the assignment and also to referencing (references must be good quality journal articles and books). It is strongly advised to use references appropriately in the text by using them where required. Also consider that some references may be used more than once in the text. Therefore, it is not just the matter of the quantity, it is also the matter of the quality of the references that are used and how you used them.
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