Other than RBS, the cases were adopted in operations management and supply chain management courses at MBA level by MIT, Washington University St. Louis, Chinese University Hong Kong, CUNY – Buffalo, etc. Contact firstname.lastname@example.org for questions.
VASTA Wireless – Push vs. Pull Distribution Strategies Yao Zhao. 1st place award INFORMS 2014 on Case and Teaching Material Competition.
Key words: store vs. showroom distribution models, supply chain analytics, integrating inventory management and transportation planning.
Teaching materials available: instructor PPT, data file, Excel analysis, and homework solution.
Synopsis: VASTA is one of the largest wireless services carriers in the United States, and well known for its reliable national network and superior customer service. In the fiscal year of 2009, VASTA suffered a significant inventory write-off due to the obsolescence of handsets. VASTA carried a huge amount of handset inventory (~$2 Billion) in its distribution network with a majority held at 2000+ stores. To address this challenge, the company is thinking to change the current “push” inventory strategy which pushes inventory to stores towards a “pull” strategy that pulls the inventory of handsets from stores to three distribution centers (DCs), and uses the stores as only showrooms. Customers visiting stores will have their favorite phones delivered to their homes overnight from the DCs free of charge. Although the pull strategy has been used in consumer electronics (for instance, by Apple), it was never attempted by VASTA and other US wireless carriers by 2010.
This case provides background for the US wireless services industry and challenges faced by VASTA. It describes the impetus for the pull strategy and its implications on many aspects of a distribution system, such as inventory, shipping, fulfillment and consumer services. The case ends with VASTA unable to decide which strategy to use and thus calls for a strategic supply chain analysis. The case is accompanied with demand and inventory data at all layers of the VASTA’s distribution system for 60 weeks.
Teaching objectives and target audience: The case can be used to teach quantitative and qualitative topics in inventory and distribution management, including the trade-off between inventory and transportation metrics, and the impact of showrooms vs. stores on sales and customer experience. The case allows instructors to demonstrate the significant difference that simple inventory models can make in practice. Instructors can also introduce sophisticated single and multi-echelon inventory models to further improve the results.
This case can be used in operations, logistics and supply chain management courses to integrate core topics of inventory management, transportation planning, warehouse fulfillment and customer satisfaction. The target audiences are master/undergraduate students in business interested in data analytics and management positions in logistics, distribution and supply chain management.
Lesson learnt/Outcome: Distribution strategies, e.g., pull and push, can make a significant difference on the cost efficiency and customer satisfaction. One must carefully balance the impact of these strategies on all aspects of a distribution system and customize them to fit the specific needs of different products. VASTA implemented the pull strategy and reduced its inventory investment from $2 Billion to $1 Billion.
From Farm to Cup: The Coffee Supply Chain in Kenya. Rose Karimi Kiwanuka, Yao Zhao
Key words: Commodity trading, inventory hedging, risk management, global supply chains.
Teaching materials available: instructor PPT, data file, Excel analysis, and homework.
Synopsis: This case exemplifies the challenges faced by millions of small-scale farmers in the agriculture sector through Kenya and its global supply chain of coffee. Kenya produces one of the world’s best coffee and 95% of its produces are exported. Cooperatives of small-scale coffee farmers face both international and domestic challenges. Internationally, the commodity price fluctuates significantly over time, and the recent coffee crisis around year 2000 (exporting prices drop to $0.50/lb well below the farmers’ cost) brought disastrous effect on the farmers. Domestically, the farmers face long cycle time in getting paid for their coffee and take all the risk in processing, storage and transportation. The case elaborates on the current situation and trends, government regulations and key players in coffee domestic and international supply chains. It also provides detailed information on recent reforms led by the government and cooperatives in the coffee sector and the outcomes. The case provides impetus for changes in this industry and ends with various options for further reforms.
Teaching objective and target audience: Sustainable and prosperous agriculture industries require risk management to protect small-scale farmers from the volatile commodity price. This case teaches risk management for agriculture commodity from a producer’s perspective by using inventory as an instrument to hedge price risk. The case compares broker (non-asset based) and trader (asset based) models for sales agents. It also provides basis for discussions on fair-trading, long-term contracts (risk sharing), and auctions vs. futures markets. This case can be used in operations management and supply chain management courses to teach risk management in commodity market and global supply chains. The target audiences are executives, master and undergraduate students.
Lessons learnt/outcome: For storable agriculture products like coffee, price volatility on the international market can be off-set by proper inventory hedging and risk sharing. The trader model, although has a higher cost, can be much more profitable than the broker model. Risk sharing via long-term contracts can create a win-win situation for both farmer cooperatives and importer/exporters.
Build-to-Performance: Boeing 787 Dreamliner. Xin Xu, Yao Zhao, [Amazon Link ]
Key words: Collaborative innovation, joint product development, program management, supply chain management.
Teaching materials available: Instructor PPT, link to introductory NBC video, teaching note.
Synopsis: Boeing 787, the Dreamliner, is the fastest-selling plane ever in the commercial aviation industry. However, its development was a nightmare – the first flight was delayed by 28 months and the first delivery was delayed by 40 months with a cost overrun of at least $10 Billion. Naturally, people asked: What happened? Could it have been avoided? This case provides a thorough coverage of the events, facts and issues for the development of the Dreamliner. It presents indepth information on how the airplane was developed and how the program was managed. It tells the story from the perspective of both Boeing and one of its major suppliers, Vought.
Teaching objective and target audiences: This case demonstrates the challenges in managing today's global supply chains for product development and provide a rich ground for discussions on development outsourcing, program management and supply chain coordination. It can be used in innovation, project management and supply chain management courses to integrate core topics of project management and supply chain management. The case extends the classic project management principles to the management of innovation projects in a collaborative environment. The target audiences are master/undergraduate students in business interested in outsourcing and supply chain management for innovation and product development.
Lessons learnt/outcome: A majority of the development delays of 787 Dreamliner were likely intentional. This happens because the risk sharing partnership forced the firms to share the wrong risk and so led them into a Prisoners’ Dilemma, where delays were in their best interest although doing so drove everyone into a disaster. Neither blindly sharing nor penalizing the consequences of all types of risk is economically effective. Companies should distinguish different types of risk in project execution and share them selectively in order to collaborate in development projects without sacrificing project performance.
Pandemic Influenza – Just-in-Time vs. Just-in-Case Strategies. Yao Zhao
Key words: scenario forecasting, production planning, aligning commerce with public health.
Teaching materials available: Instructor PPT, introductory videos, data file and Excel analysis.
Synopsis: CSP is one of the few companies certified to supply influenza vaccines to the US market. Every year, CSP’s executives must plan for the production of flu vaccines and they are torn apart between serving the company’s best interest and promoting public health. What makes the planning challenging is that the target strains are constantly changing and demand are highly unpredictable. Because flu vaccine has a relatively lower profit and the chance of a pandemic is rare, it is in CSP’s best interest to produce the amount to meet the minimum possible demand (the just-in-time strategy) so as to reduce the costly overage. To promote public health, however, CSP must do the exact opposite – producing the amount to meet the maximum possible demand (the just-in-case strategy). This is true because if a pandemic ever breaks out, demand will surge and because the production of vaccine takes 6 months at least, many people could lose their life and even more could be hospitalized without the vaccine.
This case provides detailed information on planning and production processes & economics of flu vaccines, years of supply and demand data, major events in the US vaccine supply chain since 1990, as well as regulations, various government interventions and their consequences.
Teaching objective and target audiences: This case uncovers the inherent conflict of interest between private companies and the general public in the public health sector. Instructors can use this case to teach scenario (probabilistic) forecasting for rare events but of a significant impact, production strategies facing unpredictable demand, and how government can economically and effectively align private firms’ best interest with public health objectives. The case also provides a rich ground to discuss the dynamics of healthcare industries with heavy barriers of entry and government’s intervention strategies to encourage innovation and competition and to sustain the industries. This case can be used in operations, supply chain and healthcare services management courses. The target audiences can be executives, master and undergraduate students in pharmaceutical and healthcare management.
Lessons learnt/outcome: for rare events, traditional forecasting methods, such as regression, do not work. One must define all events and assess their chances and the associated impact – scenario forecasting. The application of the Newsvendor model in the healthcare content and probabilistic calculations show that absorbing overage (relative to cost sharing, fixed amount) is the most economical intervention to align commerce with public health. An industry analysis points to ways of achieving long-term prosperity of this industry.
2014 Special Olympic USA Games – Transportation Planning & Scheduling. Andrew Johnson, Yao Zhao
Key words: Transportation services management, one-time mega event, volume estimation, bus route design, driver scheduling.
Teaching materials available: Instructor PPT, introductory video, data file, Excel analysis.
Synopsis: The 2014 Special Olympics USA Games were hosted in New Jersey where over 4,000 athletes and coaches competed in 16 sports hosted across 10 locations within a 40-mile radius. One of the key challenges of the games is to design a timely, convenient and reliable transportation system for thousands of people with disabilities to attend games and special events over eight days under a budget of $500K.
Teaching objective and target audiences: This case provides a real-life example to learn about transportation planning and schedule for convenience, cost efficiency and reliability – a classic topic in service management and transportation/logistics courses. The example is relatively simple but comprehensive – it covers a broad range of related topics such as the types of transportation services (dedicate vs. shuttle) and their basic economics, volume estimation, routing and driver (crew) scheduling. It is also representative with wide applications in one-time mega events, airline and air-cargo, ocean shipping and city shuttle systems, and passenger train services, etc. The target audiences are master/undergraduate students in business and engineering interested in transportation, services and logistics.
Lessons Learnt/outcome: The case is based on an actual event – 2014 Special Olympics USA Games where the attendances are people with disabilities. Providing convenient, cost efficient and reliable transportation services is critical to the games but challenging due to dispersed venues and tight budget. It was a rich story in seeking out the best solution that balances effectiveness and simplicity (for people with mental disabilities), in implementing such a solution in practice, and in its great success. The case is comprehensive on related issues in transportation services which instructors can pick, and presents a simple (digestible) yet representative example that relates to every-day life. Game data, Excel solutions and PowerPoint presentation are provided.