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Summary of changes: Tom

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Post  Tommy1205 Sun Feb 05, 2012 6:59 am

In the second round I decided to change 2 suppliers:

  • the mango supplier: from Tampa Fruits to Dalima Mango

  • the vitamin C supplier: from Seitan Vitamins to YoBoMa

I did this because their reliabilities were too low (just below 80% which is unacceptable!) Although the two new suppliers are slightly more expensive (especially Dalima Mango), their reliability should be much more higher than their predecessors. This is because both new suppliers have a certification which means that they have their processes under control, and should thus be more reliable suppliers.

Next to changing two suppliers, I also decided (together with Plamen and Marc) to change the trading unit for the orange and mango supplies from IBC to Tank. This means that we increased the size of our order enormously (from only a 1,000 litres to 30,000 litres). Since we also use a large amount of oranges and mangos, this will not greatly increase our safety stock. However, it has the positive effect that our ordering cost decrease.

Tommy1205
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Post  Tommy1205 Mon Feb 06, 2012 9:54 am

In the third round I decided to change one supplier:

  • the pack supplier: from Mono Packing Materials to Brit Pack

I changed this supplier since the reliability of Mono Packing Materials was too low (only 90.4%). Moreover, it did not have a certificate that it had its production process under control. Therefore I changed to a supplier with a slightly higher reliability, and at the same time had a certificate to make sure that the supplier actually more or less meets the promised reliability.

Next to changing one supplier, together with Plamen I decided to change the trading unit for the vitamin C supplier and mango supplier. We did this because Plamen had problems with high (safety) stock levels, which was probably due to the too high trading units decided upon in the previous round. The trading unit for the vitamin C supplier was changed from IBC to Drum (i.e.: lowered from 1,000 litres to 250 litres), and the trading unit for the mango supplier was changed from Tank to IBC (i.e.: lowered from 30,000 litres to 1,000 litres). On the other hand however, I decided to increase the trading unit for both the pack and PET supplier from pallet to FTL (Full Truck Load). This lowers the cost of the contracts with those two suppiers, which gave me the opportunity to increase the quality level desired from both suppliers from medium to high. I had to do this in order to lower the rejection rate. In the end, I could slightly decrease the cost of these two suppliers, thereby decreasing the overall raw material cost.

Finally, a new feature became available in the third round which I was able to change: the payment terms. I try to keep the payment term at 4 weeks for all suppliers. This is because we need to make sure that we pay our suppliers as late as possible, and get the money from our customers as soon as possible. This will in the end increase our ROI. With a payment term of 4 weeks, I want to give Wouter the opportunity to play around a little bit with his payment terms. I.e., 4 weeks is neither extremely short nor extremely long. However, in order to save costs (and thus further lower the raw materials cost), the payment term for the mango supplier is one week shorter (i.e.: a payment term of 3 weeks), and for the pack supplier even two weeks shorter (i.e.: payment term of 2 weeks).

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Post  Tommy1205 Wed Feb 08, 2012 9:55 am

In the fourth round, I contracted a second Mango supplier (i.e.: I started dual sourcing). Next to Dalima Mango (which remains the principal supplier), also Tampa Fruits will supply us (as the dual source). I did this because I want to experiment with it. I hope I can increase the overall reliability of Mango supplies to our company. I chose to dual source with Mango supplies, since our current principal supplier alone has the lowest reliability of all our principal suppliers. Since the only supplier with a slightly higher reliability on the market is way too expensive, I'll try to experiment with dual sourcing, hoping to increase the overall reliability.

Next to that, I chose the following three KPI's next to the fixed one:

  • ROI (financial perspective, also fixed by game)

  • Raw Materials cost (Internal perspective, do I and thus the company excel in efficient purchasing?)

  • Delivery reliability of suppliers (learning perspective, what do we learn from our suppliers' performance, and what can we do to increase their performance, ultimately increasing our own performance?)

  • Rejection components (customer perspective, how do my customers [i.e. Wouter, Plamen, and Marc which need high quality inputs] my performance?)

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Post  Tommy1205 Wed Feb 15, 2012 3:37 am

In the fifth round I decided to change the second mango supplier (the dual source). Apparently, we cannot get rid of the dual source in a next round once we opted for it in a previous round. Both the individual, as well as cumulative reliability of the mango suppliers (Dalima Mango and Tampa Fruits) was not good enough, Tampa Fruits individually being the worst. Therefore I decided to contract NO8DO as the second mango supplier (the dual source) since they promise the highest reliability of all potential suppliers. Since its also the most expensive supplier, I choose to contract them as the dual source, hoping to purchase the most from the less expensive supplier called Dalima Mango.

Next to changing the dual source with respect to the mango suppliers, two new features became available: VMI and Supplier Development. I do not see the advantage of using VMI with any of our suppliers (since it seems to be quite costly), so I'll leave that as it is. I did however use Supplier Development with one of our suppliers: Dalima Mango. I did this in order to increase their reliability. (Unfortunately, in the sixth round I found out that they rejected our proposal for Supplier Development.)

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Post  Tommy1205 Thu Feb 16, 2012 11:49 am

In the sixth (and final?) round I only changed one thing: I started to develop our PET supplier since this supplier has the lowest reliability next to the mango supplier (which refused our supplier development program which I had initiated in the previous round), and the Vitamin C supplier (which we will not use anymore due to the cancellations of the production of products which need this Vitamin C). In the end, I asked Marc to start monitoring the Pack supplies from Brit Pack in order to hopefully decrease the rejection rate. I specifically chose for the Pack supplies since Brit Pack showed slightly increasing quality problems.

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