PMA 2018/2019 – Global sourcing and supply chain design case study.
Read the case study provided and compile a 64 week sourcing and supply chain network strategy/plan for each of the 3 garment types included in the case study. You will report your choices in a 3,000
words report. You must use relevant academic literature to justify your choices. To facilitate your choices you can consider the following:
• Assess and select suppliers.
• Consult your current inventory levels and decide on an ordering pattern (how much to order, how many orders and when to place the orders).
• Select the transportation network of your goods from factory to the 4 Regional Distribution Centres.
• Decide between consolidation and cross-docking locations.
• Calculate and examine transportation, ordering and warehousing costs.
• Consult the brand strategy marketing reports provided by the marketing department (marketing strategy for each product and forecast of demand) and decide what type of supply chain each of the products need.
In addition to your report, in an appendix or a separate file, you can provide the supplier evaluation scorecards, and snapshots of the (or the) spreadsheets you used for the calculations supporting your decisions. You should also justify and present any assumptions made for your calculations.
Please read and follow the instructions below carefully:
• The report should be 3,000 words ±10%. The word count excludes figures and tables, table of contents, reference list, appendixes, etc.
• It should include an appropriate range of referenced material, using the Harvard Referencing style. Your report should have no fewer than 15 relevant academic references that support your argument.
• The assignment accounts for 100% of the final course mark.
Marking criteria: NITL9020 International Supply Chain Design Assignment
The marking criteria are listed below. Make sure that you read and understand the importance of each section. This will be reviewed in class on the last day.
• Presentation (Essay format is expected, Intelligibility, clear structure) (Max 5)
• Evidence of in-depth theoretical understanding of the subject (Identification of relevant material, appropriate use of theory, full and accurate referencing, justification of choices) (Max 30)
• Students to provide evidence of calculation and assumptions made in their decision making process (Demonstration of formulae used for calculations, and justification of any assumptions) (Max 15)
• The ability to relate decision, concepts and theories to examples and evidence (Evidence of analytical skills, link between theory and practice, use of evidence (i.e. calculations)) (Max 25)
• A critical and original appreciation of the main arguments (Logically and coherently argued, Development of own ideas/originality) (Max 25)
CASE STUDY1:
It is close to the end of the year, and you are preparing the ordering plans for the new planning period. You work for a fashion clothing company, and you are responsible for the supply of 3 garments (See Table 1). The 3 finished products can be sourced globally from 8 factories
located as follows: 1x Italy, 1x Morocco, 1x Romania, 2x India, 3x China (See Figure 1).
Sourcing and supply chain network decisions alone affect the performance of the company, you are not responsible for brand marketing decisions. The selling prices of the products are fixed. Sales volumes are affected by many factors such as seasonality, actions and promotions of competitors etc.
You are asked to develop a 64 week sourcing strategy, and supply chain network plan for each of the 3 products. This strategy/plan should provide an assessment and selection of suppliers, a decision about the network (route and mode of transport) by which your orders are
transported from factory to the 4RDCs (See Figure 2), decisions about the consolidation, and cross-dock locations for your goods.
The Products
You are responsible for 3 products within your company. All products are packed in standard cardboard boxes. The standard unit of transportation is the box. The exception to this is where one leg of the route is by sea, when the unit of transportation is a container of 750 boxes for the whole route. At a consolidation location, it is possible to transport whole containers onward and transport a part container load as boxes by an alternative mode of transport.
You should assume that orders placed contain the correct mix of sizes and colours, you are not anticipated to make decisions about size and colour for your report. Garments are sold to shops at a wholesale price, which is stable during your planning period. The shops then make
a further mark-up, however, this should not influence your decisions. You should not consider Sales Tax and Value added Tax for your report (even though in real life they exist). Obsolete products are disposed at a write-off of 50% of the supplier cost price. Where transportation
is by container, the cost incurred is that of a whole container, regardless if the container is full or not. The minimum order size for all garment types and for all suppliers is 1,000 units.
The inventory carrying cost is 20% per annum = 0.385% of value of goods in the pipeline per week.
Supply Network Transportation Times to EDC Strasbourg
When a production batch is ordered from a supplier, a supplier’s planning lead time will apply before production can commence at the factory (See Responses to Request for Price Quotation provided below). Each order quantity is produced at the factory in one batch. The time taken to complete the order quantity is related to the supplier’s actual rate of production per week. Goods are dispatched in the final week of production. Durations include handling times at ports and airport. All times are in whole weeks. The duration of each leg assumes that there are no disruptions. If cross-docked at EDC Strasbourg, no additional route time onward to RDC.
INFORMATION FROM BRAND MARKETING
CASHMERE LADIES JUMPER
CATEGORY: EXCLUSIVE
You have had a meeting with the marketing department of the organisation. Here are your conclusions from the meeting.
1. The product is a premium lightweight cashmere ladies jumper.
2. It is an exclusive design by one of our celebrity designers.
3. It will be modelled by one of our famous models who appeals to our target consumers.
4. Top grade cashmere will be used in manufacture and a high quality finish is essential.
5. There are 4 size variants and the 4 colours are new, reflecting the predicted colour fashion trend. Orders placed will have a constant split of size and colour. Orders do not need to specify a size/colour split.
6. This is a low volume but good margin line.
7. Planned life cycle is 2 years
8. New season lines to be in all RDCs for week 1.
9. Current forecast is 170,000 for the 64 weeks. Estimated demand split:
INFORMATION FROM BRAND MARKETING
LADIES BLOUSE
CATEGORY: FASHION
You have had a meeting with the marketing department of the organisation. Here are your conclusions from the meeting.
1. The product is a ladies summer shirt.
2. It is a design in line with the projected style for the season.
3. It is positioned as value-for-money.
4. There are 4 size variants. Orders placed will have a constant split of sizes. Orders do not need to specify a size split.
5. This is a high volume, average margin seasonal line.
6. The Marketing forecast is based on volumes for last season’s equivalent line plus a growth factor of + 10%.
7. Planned life cycle is season-only. Any residual stocks will go through a clearance. Overstocks are to be avoided at the end of the season.
8. New season line to be in all RDCs for week 13.
9. Last week in our range is week 38. Then dropped from range.
10. Current forecast is 250,000 units. Estimated demand split:
SUPPLIER: PRESQUEL TEXTILES, CHINA
You have invested company resources in assessing the capabilities of this firm. Here are the findings of your audit team. A grid is provided for you to score the level of risk in terms of supply of the garment which you are considering sourcing from this firm. If you wish to score more than one garment, you can reprint this document.
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