HPC 4 Supply Chain Management Past Paper 2021 PDF

Issue No. 1 Page 36 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C...

Issue No. 1 Page 36 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Lesson 3 Societal, Business-Related and Organizational Issues Impacting SCM (9 hours) Competence, Course Outcomes and Learning Outcomes Competence: Discussion and analysis of the societal, business-related and organizational issues. Course Outcome/s: By the end of this course, the student is able to: 1. Identify the effects of current and future trends in supply chain management. 2. Assess the processes in a supply chain to optimize processes. Learning Outcomes: At the end of the lesson, the student is able to: 1. Enumerate the different societal and regulatory issues impacting the SCM 2. Analyze the business-related and organizational issues impacting the SCM Overview A number of factors impact SCM, the overall supply chain, and the organizations and individuals involved in SCM. While coverage of all possible societal factors that might impact SCM are also included on this module. Specifically, the following items examined are gross domestic product, globalization, etcetera under societal issues. Whereas, business-related issues are customer service and satisfaction and human resources. Likewise, there are organizational issues that are included such as technology and financial aspects and metrics. Issues are important components of SCM for the entrepreneurs and other stakeholders to be aware of these to prevent any backlog or hassle to happen. At least, the information they get from these issues could be their guiding posts what to prepare and be aware of. Thus, issues could serve as feedback for improvement and preparedness in achieving competitive advantage. ©All Rights Reserved  Issue No. 1 Page 37 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Discussion Learning Module 3.1 Gross Domestic Product The societal issues narrated here under are Gross Domestic Product, which is highlighted by the logistics. As one of the largest components of supply chain costs, logistics accurated for 7.5% of U.S. GDP in 2016, the lowest point since 2009. Given the monetary impact of logistics, it is apparent that it has an impact on interest rates, inflation, productivity, energy costs and availability, employment and other aspects of the US economy. Improvements in a nation’s productivity have positive effects on the prices that consumers, business, and government pay for goods and services. As to globalization, there is an increasing number of organizations which have become involved in some forms of international marketing, manufacturing empowerment, and/or distribution. With this expansion into global market, comes a need to develop worldwide supply chain networks and information systems. Global trends which are significant have impact on organizations operating globally. Sustainability in the supply chain is assured if the stakeholders involved are ensuring that their products and operations provide environmental, health, safety and sustainable benefits to them. While not a part of an overall supply chain strategy of organizations, infrastructure can be a significant constraint in successfully implementing SCM. Regulatory issues are examined in the context of specific supply chain processes such as transportation, warehousing and the like. Security and risk are one of the tasks faced in the global marketplace, with security being the most significant. There are also other risks that face the supply chain executives. Supply chain disruptions have been an increasing concern of organization because they can cause significant problems. As to disaster preparedness and relief, these can adversely affect people, as well as commerce and trade. ©All Rights Reserved  Issue No. 1 Page 38 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Business-related issues include customer service and satisfaction plus from human resources. A good customer service supports customer satisfaction. It is where the profit derives to continue the services of the establishments. Without satisfaction, profit could not be earned. Hence, the most important is customer satisfaction first, their profit will just follow. Human resources are composed of people who render services. They are the ones who deliver customer satisfaction. The most critical and crucial resources, therefore, are of human. Once they fail to perform their respective tasks, satisfaction fails. Here comes the organizational issues which are technology and financial aspects and metrics. SCM is multifunctional, multi process and multi organizational. Thus, it requires special leadership and organizational issues to effectively and efficiently manage the supply chain. Technology has had an impact on all facets of business, but in the supply chain area, the impact has truly been significant. Technology developments have resulted in supply chain innovation in information/analytical and physical areas. Internet usage and social media are very useful for people in the business because they can sell on-line. Lastly, financial aspects and metrics can be affected if there is an absence of efficient and effective flow of money in supply chain. Metrics can be used to evaluate how effectively the supply chain is meeting end-user requirements and each enterprises contribution to overall performance. A. Supply Chain Management and Gross Domestic Product (GDP) Each year, the Council of Supply Chain Management Professional (CSCMP) conducts the Annual State of logistics research study in the U.S. At present, there is no study being conducted to capture the costs associated with the broader aspect of supply chain management. Give the monetary impact of logistics; it is apparent that it has an impact on interest rates, inflation, productivity, energy costs and availability, employment, and other aspects of the U.S. economy. Improvements in a nation’s productivity have positive effects on the prices that consumers, businesses, and governments pay for goods and ©All Rights Reserved  Issue No. 1 Page 39 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President services. Productivity increases tend to hold down inflation, stabilize currency exchange rates, and improve a nation’s ability to compete in global markets. Higher productivity usually means that businesses have lower costs of operation, increased availability of investment capital, economic growth, and less unemployment. B. Globalization and Global Trends Generally, logistics costs as a percentage of U.S. GDP which declined since the early 1980s. However, because of rising energy costs and uncertainty issues relating to security and terrorism, that percentage rose during the first several years of the new millennium but decreased during the recession of 2008-2009 and thereafter. To illustrate, if logistics costs as a percentage of GDP had remained the same since 1980, the United States would be spending an additional $300 billion annually to conduct logistics. Thus, improving the efficiency of logistics operations makes an important contribution to the economy as a whole. And as one of the most significant components of SCM, it has allowed supply chains to also be more efficient. Increasing numbers of organizations have become involved in some form of international marketing, manufacturing, procurement and/or distribution. This trend will continue. With this expansion into global markets comes a need to develop worldwide supply chain networks and information systems. The supply chain executive will have to acquire additional skills and competencies in many areas (international finance, import and export documentation, political science, foreign business practices, international customs and cultures). As organizations expand internationally, integrated SCM and total cost trade-off analysis become even more complex and difficult to manage. Global Trends In the future, several significant trends will have an impact on organizations operating globally and include the following:  An increasing number of supply chains executive who will ©All Rights Reserved  Issue No. 1 Page 40 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President have international responsibility and authority.  Reduction in the amount, and increased standardization, of international paperwork and documentation, especially the shipping bill of lading.  Increasing number of smaller firms engaging in exporting with larger firms utilizing licensing, joint ventures, or direct ownership.  A growing number of third-party providers owned and operated on a global scale.  Increasing vertical integration of the supply chain, which will include firms from many countries (especially in the acquisition of raw material supply sources).  Growth and development of global supply chains.  Continuation of omni channel commerce as market expand globally.  Development of new and expanded technologies that allows firms to link their operations globally. C. Sustainability in the Supply Chain Organizations of all types have become more concerned with ensuring that their products and operations provide environmental, health, safety, and sustainable benefits to their stakeholders. Companies as diverse as Demotic, an engineering company that designs, builds, and supports logistics solutions that optimize material flow, to Nike, a global manufacturer of athletic shoes and apparel, have embraced environment, health, safety, and sustainability (EHS&AS) in their supply chains. For example, Nike built a sustainable distribution center in Belgium that utilizes power from locally generated, 100 percent renewable energy sources. Energy availability and prices vary over time, although long-term indicators are that fossil fuels will continue to increase in price as they become less available. Alternative energy sources will no doubt replace some utilization of traditional fossil fuels, but these sources will likely be more expensive and less widely available. In the coming decades, these changes will undoubtedly have various impacts on supply chains. Many of the overnight express companies such as UPS, FedEx, DHL, and others have introduced multi-fuel vehicles, trucks that operate on ethanol (derived from corn), and, in some instances, have gone so far as to use bicycles to deliver small packages in crowded urban locations. ©All Rights Reserved  Issue No. 1 Page 41 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President While energy will continue to be generally available, with spot shortages from time to time, it is important that supply chain executives develop plans for the future. D. Infrastructure While not a part of an overall supply chain strategy of organizations, infrastructure can be a significant constraint in successfully implementing SCM. Infrastructure is most often created by governments for multiple purposes such as moving people, safeguarding or defending a country, and improving and/or expanding business commerce. Infrastructure involves roadways, rail systems, airports and ocean ports, bridges, waterways, and a myriad of other elements important to the creation of a healthy GDP for a nation and its people. However, in recent years, infrastructure has not kept pace with increasing supply chain demands. Two examples will illustrate the problem. In the United States, spending on transportation and water infrastructure as a percentage of gross domestic product (GDP) has declined from 3.1 percent in the 1960s to 2.5 percent in 2017. The Panama Canal expansion, which was completed in 2016, doubled throughout as more and larger ships are able to pass through it. For U.S. ports to take advantage of the potential increase in shipping traffic, many eastern and southeastern seaboard ports have dredged their ports in order to accommodate the larger ships. Additionally, networks of highways, warehouses, and other supply chain entities will have to be put into place. Unfortunately, all of these improvements will cost money, which the federal, state, and local governments do not have to spend. 3.2 Regulatory Issues Many aspects of supply chain management are subject to some type of regulation-local, state, federal, and/or international. Many of these regulatory issues will be examined in the context of ©All Rights Reserved  Issue No. 1 Page 42 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President specific supply chain processes such as transportation, warehousing, and others, but one that deserves special mention now (and again in a later discussion of organizational issues relating to corporate governance) is the Sarbanes -Oxley Act (SOX) that was passed into law by the U.S. Congress in 2002. Because of serious impacts on investor accounts, legislation was enacted to provide transparency in corporate financial statements. Three areas of publicly traded companies on the U.S exchanges were regulated as a result of SOX, including  Internal process controls (Sections 302 and 404) – this would include inventory and fixed- asset reconciliation and inventory write-offs; materials transfer and poor inventory accuracy; segregation of duties in the procure-to-pay process; and viable SCM practices.  Off-balance sheet obligations (Section 401a) – Areas impacted could include vendor managed inventories (VMI); long term purchase agreements; lease agreements; and letters of intent.  Timely reporting of material changes (Section 409) – includes issues relating to outsourcing of goods and services such as contracts with vendors, stable vendor relationships, and contingency plans for supply disruptions. A. Security and Risk There are many risks facing supply chain executive in the global market, with security being the most significant. However, in addition to security, other risks face the supply chain executive. Generally, these can be classified into five categories: economic (oil prices/energy supplies, trade deficits, demographic shifts); environmental (natural catastrophes, climate issues); geopolitical (terrorism, weapons of mass destruction, wars, Middle East instability); societal (pandemic, infectious diseases in developing world); and technology (nanotechnology risks, breakdown of critical information infrastructure). ©All Rights Reserved  Issue No. 1 Page 43 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President B. Cyber Supply Chain Best Practices Companies have adopted a variety of practices that help them manage their cyber supply chain risks. These practices include: 1. Security requirements are included in every RFP and contract. 2. Once a vendor is accepted in the formal supply chain, a security team works with them on-site to address any vulnerabilities and security gaps. 3. ‘One strike and you’re out’ policies with respect to vendor products that are either counterfeit or do not match specification. 4. Component purchases are tightly controlled; component purchases from approved vendors are prequalified. 5. Parts purchased from other vendors are unpacked, inspected, and x-rayed before being accepted. 6. Source Software Lifecycle Development Programs and training for all engineers in the life cycle are established. 7. Source code is obtained for all purchased software. 8. Software and hardware have a security handshake. Secure booting processes look for authentication codes and the system will not boot if codes are not recognized. 9. Automation of manufacturing and testing regimes reduces the risk of human intervention. 10. Track and trace programs establish provenance of all parts, components and systems. 11. Personnel in charge of supply chain cyber security partner with every team that touches any part of the product during its development life cycle and ensures that cyber security is part of supplies’ and developers’ employee experience, processes and tools.” Security risks can take a number of different paths. To illustrate, terrorist threats can disrupt supply chain activities through suicide bomb attacks and chemical, biological, or radiological events on companies, port facilities, distribution hubs, and other infrastructure components. Cyber-attack is another area of potential supply chain vulnerability. With firms so dependent on computers and information systems, the loss of data if computer systems were compromised, or the inability to communicate with supply chain partners and customers could be devastating. ©All Rights Reserved  Issue No. 1 Page 44 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President C. Disaster Preparedness and Relief Disaster on a local, national, regional, and global scale can not only adversely impact people, but are likely to affect commerce and trade as well. Disasters can be natural disaster such as tornadoes, hurricanes, tsunamis, earthquake, and floods, or they can be other type of events such as flu pandemics, financial market collapses, and transportation accidents (e.g., ships sinking, oil spills, train derailments). When natural disasters strike, there are a number of supply chain issues involved. First, there is disaster relief where SCM is used to get medical and food supplies to people and areas where the need is greatest. Second, there is the ability of organizations to be able to function normally even when the supply chain is disrupted. When a disaster of worldwide proportions occur, such as in the event of a flu pandemic, the potential deaths and illness of company employees could seriously cripple supply chain efforts. Much of what gets done in the supply chain is done manually-by people-and if they are ill or deceased, the work will not get done. Unlike other disasters such as hurricanes, floods, and earthquakes, a flu pandemic would be of extended duration. 3.3 Business-Related Issues Impacting Supply Chains A number of business-related issues impact SCM, the supply chain, and the organizations and individual involved in SCM. Some of the more significant issues include customer service and ©All Rights Reserved  Issue No. 1 Page 45 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President satisfaction; human resources; organizational issues; Internet and electronic commerce; use of information systems; and financial aspects and metrics. A. Customer Service and Satisfaction In the scholarly book published on customer service, the authors declined it as follows: “a customer-oriented philosophy that integrates and manages all elements of the customer interface within a predetermined optimum cost-service. That definition is pretty much the same today as it aws four decades ago. Customer service acts as the binding and unifying force for all of the supply chain management. Customer satisfaction, of which customer service is an integral part, occurs if the organization’s overall supply chain and marketing efforts are successful. Each firm in the supply chain must be focused on the customer and engaged in developing goods and services that optimize the customer’s and the firms experience. Each component of the supply chain can affect whether a customer receives the right product, at the right place, in the right condition, for the right costs at the right time. Thus, customer service involves successful implementation of the integrated supply chain management concept in order to provide the necessary level of customer satisfaction at the lowest possible total cost. B. Human Resources Of the five tasks, perhaps the most important is the ability to collaborate as developing partnerships or relationship with individuals and organization within the supply chain. Elijah Ray, former president of the Council of Supply Chain Management Professionals and Executive VP, Customer Solutions, Sunland Logistics Solutions, identified the strategies that could foster and facilitate collaboration in the supply chain: 1. Leaders must have a commitment to developing positive relationships and make it part of their corporate culture. 2. Relationship management should be part of the strategic planning process of the organization. 3. Establish expectations of the relationship at the beginning. ©All Rights Reserved  Issue No. 1 Page 46 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President 4. Develop points of communication in the organizations with outside individuals and supply chain partners. 5. Periodically review the relationship to assess progress against expectations. 6. Develop joint problem resolution mechanisms for the problems that will undoubtedly occur. 7. Develop an awareness and empathy for partners’ strategic goals and objectives. 8. Closely monitor continuous improvement objectives for anticipated results and make adjustments when necessary. 9. Collaborate on the selection and use of technology. 10. Conduct periodic strategic planning sessions with supply chain participants to establish clear objectives. 3.4 Organizational Issues A. Technology Technology has had an impact on all facets of business, but in the supply chain area the impact has truly been significant. Technology development have resulted in supply chain innovation in information/analytical and physical areas. In the information/analytical area, examples include the Internet of Things (IoT), big data, cognitive analytics, cloud storage, and supply chain digitization. In the physical area, examples include drones, wearable technology, driverless vehicles, robotics, and 3-D printing. In an Omni channel environment, many technologies are used to support initiatives that conducted by DC Velocity and ARC Advisory Group, technologies used by organizations to support Omni channel initiatives included warehouse management systems, demand management, total- landed-cost analytic, inventory optimization, transportation management systems, labor/workforce management systems, and many others. The Internet and electronic commerce have changed the way companies do business and the way firms relate to customers and suppliers. Computers, the Internet, and information and ©All Rights Reserved  Issue No. 1 Page 47 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President communication systems are being increasingly used in every SCM activity and process, including transportation, warehousing, order processing, materials management, manufacturing, and sourcing/procurement. Traditional methods of managing the supply chain are proving inadequate in today’s fast- paced economy, and executives have been forced to innovate. If firms do not respond appropriately, they may face loss of market share and create for themselves positions of competitive disadvantage. Fortunately, ample assistance is available from innovations and developments in technology. B. Financial Aspects and Metrics “Traditionally, organizations have focused on differentiating themselves and improving operational efficiencies by owning their entire supply chain. Ownership, in fact, was the only way to achieve the seamless flow of information that would allow them to truly optimize operations. The global access provided by advances in information technology and the resulting transparency into a business’s extended operations have facilitated a changing view of ownership. The Internet provides a seamless information flow at a relatively low cost. Companies no longer need to own their entire supply chain. Instead, they can leverage the core competencies of their partners to create value. Intuitively, supply chains should provide higher levels of customer service at lower costs than traditional forms of distribution. Of course, the problem is measuring the combined outputs of many organizations contributing to the creation of goods and services for end-customers. “Metrics can be used to evaluate how effectively the supply performance.” Some organizations might have to increase their individual costs so that the entire supply chain is able to minimize costs. Calculating the financial costs and benefits associated with each supply chain member is enormously difficult. Strategies such as vendor-managed inventory, postponement, and global sourcing are factored in, such calculations are nearly impossible. At the present time, few, if any, supply chains are able to calculate the individual financial contributions of all supply chain member. However, information and computer system exist that theoretically can be used to assist organizations in making such calculations. To develop a successful supply chain metrics program, organizations must ©All Rights Reserved  Issue No. 1 Page 48 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President  Ensure that the metrics include the key items needed to answer such questions as: “How is our supply chain performing?” and “Where do we need to improve performance?”  Align key metrics to organizational and supply chain strategy.  Include both financial and nonfinancial measures.  Be process-focused, not functionally-focused. References T1 – Stock, James R. and Mandrodt, R. (2020). Supply chain management. McGraw Hill Education Checkpoint It is now time to use those skills you have learned so far. Goodluck! Activity 6 Matching Type Match column A with column B. Write the letter of your answer on the space provided. Column A Column B _______1. Globalization a. SCM in the international level _______2. Business-related issues b. Involves roadways, rail systems and airport _______3. Technology c. Source code is obtained for all purchased software _______4. Global Trend d. Customer satisfaction _______5. Sustainability e. Involves people working on supply chain _______6. Infrastructure f. It is used to evaluate how effective the supply chain _______7. Regulatory Issues is _______8. Cyber supply chain g. Use internet _______9. Human Resources h. Concerned with environmental benefits of supply _______10. Metrics chain i. This is about terrorism and other risks j. Growth and development of global supply chain k. Timely reporting of material changes ©All Rights Reserved  Issue No. 1 Page 49 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Do this Activity 7 Identification Identify if the following belong to (A) societal issues, (B) business-related issues or, (C) organizational issues. Write the letter only. ________ 1. Technology ________ 2. Infrastructure ________ 3. Human Resources ________ 4. Globalization ________ 5.Sustainability in the Supply Chain ________ 6. GDP ________ 7. Customer Satisfaction ________ 8. Metrics ________ 9. Cyber Supply Chain ________ 10. Security and Risk ©All Rights Reserved  Issue No. 1 Page 50 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Assessment Activity 3 Research A. Quiz – Essay – (20pts) answer all questions 1. Enumerate the different issues under the societal, business-related and organizational. (12pts.) 2. Analyze each issue and give only 8 examples for any of the 12 issues. (8pts.) B. Reaction Paper “Do you think technology is more in demand in today’s supply chain and explain why”. (5pts.) For handwritten output: a. Write your output in an A4 size bond paper b. Write legibly For computerized output (online/physical submission): a. Use A4 size bond paper b. Font style/size: Arial Narrow 12 c. Spacing: 1.5 d. Alignment: Justified e. Margin: 1 inch in all sides ©All Rights Reserved  Issue No. 1 Page 51 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Lesson 4 Techniques for Evaluating Supply Chain (6 hours) Competence, Course Outcomes and Learning Outcomes Competence: Discussion of techniques for evaluating supply chain Course Outcome/s: By the end of this course, the student is able to: 1. Assess the processes in a supply chain to optimize processes. Learning Outcomes: At the end of the lesson, the student is able to: 1. Discuss the techniques for evaluating supply chain and the disaster risk that may affect it 2. Define the Bullwhip Effect in supply chain and how to deal with it 3. Discuss the supplier selection analysis 4. Select the right transportation mode on its application to supply chain 5. Analyze the right technique for supply chain Overview Why study techniques for evaluating supply chains? Is this necessary to ensure that supply chains work efficiently and effectively? Myriad of tools have been developed to help supply chain managers make well-informed decisions. A small sampling is provided in this supplement. A decision tree can help determine the best number of suppliers to protect against supply disruption from potential disasters. The bullwhip measure can identify each supply chain member’s contribution to exacerbating ordering frustration. The significance of evaluating the techniques for supply chain includes the assurance of quality in the system for supply chain to evaluate that the supply chain in any country is operating properly. ©All Rights Reserved  Issue No. 1 Page 52 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President There are factors that affect supply chains and these are from areas that need to be evaluated such as disaster/risks, bullwhip effect, analysis of suppliers’ selection, transportation mode and warehouse storage. These are critical areas that need attention because once the businessmen and other stakeholders fail to address these properly; the supply chains could be disrupted. Take the case of disasters that could not be foreseen or avoided. These just happen without warning and the supplies are not prepared to overcome or face the risks. Likewise, the bullwhip effect where there is greater demand are not expected. There are supplies that do not qualify as good suppliers because they cannot meet the demands once negotiation starts. Also, the mode of transportation when there are breakdown of vehicles that are expected to deliver the goods as scheduled. Lastly, the choice of warehouse for storage of the goods could be a failure. Perishable goods need storage that are of good quality. Otherwise, the goods could not be preserved, thus, profit is adversely affected. Techniques for Evaluating Supply Chains Many supply chain metrics exist that can be used to evaluate performance within a company as well as for its supply chain partners. This supplement introduces five techniques that are aimed at ways to build and evaluate performance of the supply chain. Discussion Learning Module 4.1 Evaluating Disaster Risk in the Supply Chain Disasters that disrupt supply chains can take many forms, including tornadoes, fires, hurricanes, typhoons, tsunamis, earthquakes, and terrorism. When you are deciding whether to purchase collision insurance for your car, the amount of insurance must be weighed against the probability of a minor accident happens (e.g., “totaling” of the car). Similarly, firms often use multiple suppliers for important components to mitigate the risks of total supply disruption. ©All Rights Reserved  Issue No. 1 Page 53 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President A decision tree can be used to help operations managers make this important decision regarding the number of suppliers. Use the following notation for a given supply cycle: S = the probability of a “super-event” that would disrupt all suppliers simultaneously U = the probability of a “unique-event” that would disrupt only one supplier L = the financial loss incurred in a supply cycle if all suppliers were disrupted C = the marginal costs of managing a supplier All suppliers will be disrupted simultaneously if either the super-event occurs or the super event does not occur but a unique – event occurs for all of the suppliers. Assuming that the probabilities are all independent of each other, the probability of all n suppliers being disrupted simultaneously equals: P(n) = S + (1 - S)Un (S11-1) An interesting implication of Equation (S11-1) is that as the probability of a super-event (S) increases, the advantage of utilizing multiple suppliers diminishes (all would be knocked out anyway). On the other hand, large values of the unique event (U) increase the likelihood of needing more suppliers. These two phenomena taken together suggest that when multiple suppliers are sued, managers may consider using ones that are geographically dispersed to lessen the probability of all failing simultaneously. 4.2 Managing the Bullwhip Effect “Bullwhip” fluctuations create unstable production schedules, resulting in expensive capacity change adjustments such as overtime, subcontracting, extra inventory, backorders, hiring and laying off of workers, equipment additions, underutilizations, longer lead times, or obsolescence of overproduced items. Procter & Gamble found that although the use of Pampers diapers was steady and the retail- store orders had little fluctuation, as orders moved through the supply chain, fluctuations increased. By the time orders were initiated for raw material, the variability was substantial. Similar behavior has been observed and documented at many companies, including Campbell Soup, Hewlett- Packard, Barilla SpA, and Applied Materials. ©All Rights Reserved  Issue No. 1 Page 54 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President The bullwhip effect can occur when orders decrease as well as when they increase. Figure 4 identifies some of the major causes and remedies of the bullwhip effect. Often the human tendency to overreact to stimuli causes managers to make decisions that exacerbate the phenomenon. The overarching solution to the bullwhip effect is simply for supply-chain members to share information and work together, as in the O M in Action box “RFID Helps Control the Bullwhip.” Supplier coordination can help with demand shifts. During the recent worldwide recession but prior to experiencing the economic recovery and increasing sales, Caterpillar started ordering more supplies. It also worked proactively with its suppliers to prepare them for a sharp increase in output. Caterpillar visited key supplier individually. In some cases it helped suppliers obtain bank financing at favorable rates. As part of Caterpillar’s risk assessment activities, suppliers had to submit written plans describing their ability to ramp production back up once the economy improved. Careful, coordinated planning can help alleviate shortages and delays that might otherwise occur as the bullwhip snaps back upward. Figure 4: The Bullwhip Effect The bullwhip effect causes members of the supply chain to ever react to changes in demand at the retail level. Minor demand changes at the consumer level may result in large ones at the supplier level. ©All Rights Reserved  Issue No. 1 Page 55 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President 4.3 Supplier Selection Analysis Selecting suppliers from among a multitude of candidates can be a daunting task. Choosing suppliers simply based on the lowest bid has become a somewhat rare approach. Various, competing, factors sometimes often play a role in the decision. Buyers may consider such supplier characteristics as product quality, delivery speed, delivery reliability, customer service, and financial performance. The factor-weighting technique, simultaneously consider multiple supplier criteria. Each factor must be assigned an importance weight, and then each potential supplier is scored on each factor. The weights typically sum to 100%. Factors are scored using the same scale(e.g., 1-10). Sometimes a key is provided for supplier raters that converts qualitative ratings into numerical scores (e.g., “Very good: = 8). 4.4 Transportation Mode Analysis The longer a product is in transit, the longer the firm has its money invested. But faster shipping is usually more expensive than slow shipping. A simple way to obtain some insight into this trade-off is to evaluate holding cost against shipping options. Let U.S. looks only at holding cost versus shipping cost. For the operations or logistics manager, there are many other considerations, including ensuring on-time delivery, coordinating shipments to maintain a schedule, getting a new product to market, and keeping a customer happy. Estimates of these other costs can be added to the estimate of the daily holding cost. Determining the impact and cost of these considerations makes the evaluation of shipping alternatives a challenging OM task. 4.5 Warehouse Storage Storage represents a significant step for many items as they travel through their respective supply chains. The U.S. alone has more than 13,000 buildings dedicated to warehouse and storage. ©All Rights Reserved  Issue No. 1 Page 56 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Some exceed the size of several connected football fields. In fact, more than 35% have over 100, 000 square feet of floor space. Care should be taken when determining which items to store in various locations in a warehouse. In large warehouses in particular, hundreds or thousands of trips are made each day along very long aisles. Proper placement of items can improve efficiency by having significant travel time for workers. References R3 – Stevenson,William and Sum Chee Choung (2014). Operations Management. McGraw Hill Education Checkpoint It is now time to use those skills you have learned so far. Goodluck! Activity 8 Reaction Paper Choose one technique and be able to write a reaction paper and submit if you are finished. Activity 9 Essay Write an Essay about two (2) techniques, which you think, are the most critical. Explain why. ©All Rights Reserved  Issue No. 1 Page 57 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Do this Activity 10 SWOT Analysis Apply SWOT analysis is your disaster such as typhoon, fire or earthquake and be able to survive from it to save supply chain. (5pts.) Activity 11 Opinion What is your opinion on the many warehouse build today at the coastal road in Bitoon, Jaro?. What is its implication? (5pts.) Assessment Activity 4 Deal or No Deal Answer by checking the box opposite each answer of your choice, in evaluating the techniques for supply chain if applicable today or not give your explanation for your answer. Reasons 1. Typhoon Signal #3 Deal No Deal ___________________________ 2. Large Warehouse Deal No Deal ___________________________ 3. Moderately running Deal No Deal ___________________________ delivery truck 4. Fast supplier Deal No Deal ___________________________ 5. Bullwhip effect Deal No Deal ___________________________ ©All Rights Reserved  Issue No. 1 Page 58 of 99 ST. THERESE- MTC COLLEGES HPC 4 E S E MT C Iloilo, Philippines SUPPLY CHAIN MANAGEMENT IN R C E HOSPITALITY INDUSTRY OL. T H LEGES Revision No. 2 Effectivity Date: STUDENT LEARNING MODULE ST Reviewed by: Approved by: 01 September 2021 QMR President Which mode of transportation could you prefer for a particular product? Connect A with B using and arrow. 1. plane A. dressed chicken 2. train B. appliances 3. van C. newspaper 4. boat D. fruits 5. truck E. school supplies For handwritten output: a. Write your output in an A4 size bond paper b. Write legibly For computerized output (online/physical submission): a. Use A4 size bond paper b. Font style/size: Arial Narrow 12 c. Spacing: 1.5 d. Alignment: Justified e. Margin: 1 inch in all sides ©All Rights Reserved