Global Supply Chain Management Simulation: Managing A Mobile

Global Supply Chain Management Simulation: Managing a Mobile Phone Manufacturer

This assignment involves engaging with an interactive online simulation that requires managing the complexities of a global supply chain for a mobile phone manufacturing company. Over four simulated years, participants will design product lines, forecast demand, select suppliers, allocate production, and respond to dynamic market conditions. The primary goal is to optimize company profits while balancing supply chain flexibility, cost-efficiency, and responsiveness to demand fluctuations.

The simulation aims to impart key supply chain concepts such as creating a balanced mix of suppliers with different lead times and costs, introducing flexibility to prevent stock-outs and excess inventory, evaluating demand forecasts, and adjusting production plans based on real-time feedback. Successful participants will demonstrate the ability to develop a responsive, cost-effective supply chain that adapts to uncertainties inherent in global manufacturing and logistics.

Explanation and Management of Supply Chain Decisions

The simulation begins with the initial setup of a product portfolio, where participants decide which features and options to include in their mobile phones, such as stylish design, infrared, extra batteries, voice dial, GPS, MP3 players, and mini-DVD functionalities. Each option choice is driven by market demand forecasts, competitive positioning, and cost considerations. Participants must analyze the trade-offs between adding features that increase customer value and the additional costs incurred, including manufacturing complexity and supply chain adjustments.

Forecasting demand is critical to supply chain success. Participants will select forecasting methods, interpret demand signals, and adjust their predictions based on market responses over time. Effective forecasting helps determine optimal production levels and inventory buffers, minimizing costs associated with overproduction or stockouts. The rationale behind forecast choices involves evaluating historical data, market trends, and collaboration with virtual demand colleagues, which simulate real-world demand planning complexities.

Supplier Selection and Production Allocation

Choosing suppliers involves analyzing factors such as cost, lead time, capacity, and reliability. Participants must decide whether to work with long-lead-time but less expensive suppliers or to invest in shorter lead-time options that allow greater responsiveness but at a higher cost. For example, paying an additional $10 per unit for a closer supplier may be justified if rapid response to demand shifts is crucial. Similarly, paying an extra $1 million to reduce lead time by a month might be beneficial for products with highly volatile demand or time-sensitive markets.

Production allocation decisions involve distributing manufacturing volumes between selected suppliers based on their capabilities, costs, and lead times. Participants need to consider inventory holding costs, capacity constraints, and strategic flexibility. They must also decide when to issue production change orders, weighing the benefits of adjusting production levels against the $2 million cost of such changes. If demand forecasts or market conditions shift significantly, timely production adjustments can prevent costly stock-outs or excess inventory.

Responses to Market Dynamics and Performance Evaluation

Throughout the simulation, participants will monitor monthly demand and respond to unforeseen market shifts or supply disruptions by adjusting production plans, supplier choices, or inventory buffers. Evaluating the cost-effectiveness of decisions, including whether to invest in additional capacities such as the Celldex show, involves analyzing potential benefits against the strategic and financial costs incurred.

The virtual board of directors evaluates each participant's performance based on net profits, demand fulfillment, supply chain responsiveness, and decision-making quality. Participants are encouraged to reflect on their decision rationale, particularly regarding option choices, forecasting accuracy, supplier negotiations, and response strategies. Documenting these decisions with clear reasoning demonstrates a comprehensive understanding of the complexities and trade-offs inherent in global supply chain management.

Conclusion

This simulation provides a practical, immersive experience in managing a supply chain under uncertainty and competitive pressures. Participants will enhance their ability to develop flexible, cost-efficient supply networks and make informed decisions that optimize overall business performance. The exercise emphasizes the importance of strategic thinking, data-driven analysis, and adaptive planning in effective supply chain management, skills critical for careers in operations, logistics, and strategic planning.

References

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