OPNS-455 Supply Chain Management

Spring 2018 - Section 70

Course Syllabus
Instructor: Professor Lauren Xiaoyuan Lu
Email: lauren.lu@kellogg.northwestern.edu
Phone: 847-414-7511
Office Hours: By appointment

Course Description and Objectives

Course Objectives
A supply chain is comprised of all the parties involved in fulfilling a customer request. The integrated management
of this network is a critical determinant of success in today’s competitive environment. Companies like Amazon,
Dell, Procter & Gamble, Toyota, and Wal-mart are proof that excellence in supply chain management is a must for
financial strength and industry leadership.

With increasing competition around the globe, supply chain management is both a challenge and an opportunity for
companies. Hence a strong understanding of supply chain management concepts and the ability to recommend
improvements should be in the toolbox of all managers. The objective of this course is to introduce you to the key
concepts and techniques that will allow you to analyze, manage and improve supply chain processes for different
industries and markets. At completion of this course, you will have the skills to assess supply chain performance
and make recommendations to increase supply chain competitiveness.

Content
The topics we will cover in this course can be roughly grouped into two modules:
• Module I: Supply Chain Basics and Matching Supply with Demand (e.g., supply chain strategic alignment,
designing supply chain networks, managing multi-item inventory systems, managing currency risk)
• Module II: Managing Decentralized Supply Chains (e.g., supply chain coordination and contracting, supplier
management, procurement auction, strategic sourcing, offshoring, supply disruptions)

Approach
Each topic will be discussed using a combination of models, case-discussions, and readings. The anticipated mix
for the course is roughly 60% quantitative and 40% qualitative. In a typical week we will cover one major case in-
depth, supplemented by mini-lectures, presentations and qualitative discussions of other examples. We will use a
data-driven approach where tools and analysis will start with realistic data. We will also play games to give students
simulated hands-on experience.

Intended Audience
Students interested in (1) operations and supply chain management, (2) general management, (3) management
consulting, and (4) marketing.

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Grading Policy

The grade you receive for the course is intended to certify your demonstrated proficiency in the course material.
Proficiency will be estimated by measuring your performance in:

1. Class Participation: Individual 20%

2. Online Quizzes (5): Individual 25%
3. Assignments (2): Group plus Peer Review 22%
4. Case Write-up (1): Group plus Peer Review 13%
5. Final Project: Group plus Peer Review 20%

Class Participation
This is your contributions to create and enhance a positive learning environment for this course. Grading will be
based on the quality and impact of your class participation, not on quantity (although a minimum amount of the
latter is necessary to deliver on the former.)

Voluntary class participation will consist of voluntary contributions and occasional cold calls, usually to answer
opening questions. A thorough preparation of the assigned materials is all that is necessary for such leadoff
questions. If you feel uncomfortable with being called on in class please let me know in advance so that we can
agree on an alternative mode of interaction.

Online Quizzes
There will be a number of online quizzes administered through Canvas. The students are expected to read the
assigned reading materials before taking them. Each quiz is designed to associate with a specific session and serves
as an incentive for students to read assigned materials before class. Quizzes will be announced in advance to allow
students to prepare. These quizzes are to be completed by students individually.

Forming Study Groups

The two assignments, the one case write-up, and the final project are to be done by a group of 3-4 members. Groups
need to be formed prior to the 3rd class, and should not change after that. Group sign-up will be done through
Canvas.

The study groups are set up with the intention that students have opportunities to share knowledge and skills and
make learning a fun experience. Each group member should contribute in completing the assignments and the course
project. A peer review will be conducted toward the end of the course. Individual grades will be adjusted based on
the peer review.

Classroom Etiquette
When you are in class, you are expected to fully follow the principles of the Kellogg code of classroom etiquette
(http://www.kellogg.northwestern.edu/stu_aff/policies/etiquette.htm). Two important etiquette aspects in my class
are:
1. All cell phones must be turned off before the start of class
2. The computer should only be used to take class notes (except for in-class Excel modeling and game playing as
directed by the instructor). All other programs should be shut down before the start of class. Any chatting, web
surfing, e-mail etc. disturbs the class and is a breach of classroom etiquette.

The Kellogg Honor Code applies as follows:

• Online quizzes: To be done individually, and no discussion about the quiz questions is allowed between students
before each quiz is due.

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• Assignments, Case Write-up, & Final Project: To be done with your study group, discussion within a group is
allowed, but discussion across groups is not allowed.

• Final project: You should make it very clear what part of your work is based on your own thinking and what
part summarizes pre-existing outside sources. Thus, it is extremely important and part of the honor code
that you explicitly identify and refer to all significant external sources (e.g. in footnotes or endnotes). This
applies in particular to papers you may have written for other Kellogg classes, to documents you may have
received from the company you are analyzing, interviews with industry experts, etc. Building on external
sources is a “good thing” – solid work is typically aware of and builds on what others have done. Ideally though,
you should take this external information and add the filter of your own critical thinking and the concepts
studied in this class to synthesize it, critique it, etc.

• Peer reviews: Your assignment and final project grades will take into account a peer review from each group
member of other members in your group. Forms will available on the course home page.

• For standard violations of academic integrity, please check out a description of some of the standard
violations at http://www.northwestern.edu/uacc/defines.html

• For a detailed discussion on plagiarism by the Northwestern Undergraduate Academic Conduct Committee,
please see http://www.northwestern.edu/uacc/plagiar.html

This syllabus cannot identify all the situations that constitute a violation of the Honor Code. It is the student’s
responsibility to clarify with the professor any questions regarding how the Honor Code applies to this class.

Course Materials

□ Required: course packet

□ Recommended textbook:
• Supply Chain Management: Strategy, Planning, and Operation 6th edition by Chopra and Meindl. Pearson
(ISBN 978-0-13-380020-3).

This is a popular MBA textbook on supply chain management. The first edition of the book won the prestigious
Book of the Year award in 2002 from the Institute of Industrial Engineers.

Guidelines for the Assignments

The two assignments are to be done by groups. Each group should submit an electronic copy through Canvas before
the specified deadline.

Format
You can submit a Word/PDF document for your solutions. Some questions of the assignments will require you to use
Excel. In these cases, you need to submit an Excel file as a supplement to your text document. Be sure to have the
separate sheets of the Excel file clearly marked for different questions.

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Guidelines for the Case Write-up

The one case write-up in this course is to be done by groups. The write-up is graded for both content and presentation.
A good write-up should clearly and succinctly state the recommendations in the first paragraph to provide the reader
with a framework. (If a lengthy description of the recommendation seems necessary, append it to the report.) The
remaining paragraphs should each present a major part of the rationale for the recommendation in terms of the
desirable and undesirable consequences of adopting it.

The rationale must consider capabilities that the supply chain system under study needs to excel at, and how the
current system either provides these capabilities or fails to provide them. Some common problems in case write-
ups result from inadequate analysis. Analysis for a case is a time consuming and intellectually challenging task.
Each case has a set of questions which are a guide to help you with the analysis – however, you should not limit
your analysis to narrowly answering these questions. The objective is to evaluate a complete range of alternatives
and anticipate and discuss the full consequences of your recommendation.

A good case write-up is not a chronology of analysis, but a clearly articulated statement of recommendation and
support. If there are options under consideration in the case that are rejected by you, a clear rationale for your
decision should be provided. Facts stated in the case need not be restated unless used to make a point. I will assume
that the most important issues are raised in the report and that all else is less important to the writer. Both desirable
and undesirable consequences should be factually stated and supported. In the overall evaluation of the write-up,
the discussion of all consequences of the recommendation is of the greatest importance. You must clearly discuss
how your recommendations aid in the development of capabilities that are important for the supply chain system
under study.

As per the honor code, an individual should include his/her name on a case write-up only if they have contributed
to the analysis. A peer evaluation will be collected at the end of the term and used for grades.

The following table summarizes deadlines, submission and formatting guidelines.

Case Write-up: Deadlines, Submission and Format Guidelines

• Case write-up is due at the beginning of the class session for which it is assigned.
• Submit an electronic copy of your write-up on Canvas – one per group.
• Late submissions are not acceptable – no credit will be given.
• Length: About 3-4 pages, not including appendices and exhibits
• Format: 11 point font, 1 inch margins on all sides, line spacing of 1.5.

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Guidelines for the Final Project

The final project should be completed by groups (the same study group for your assignments). The objective of the
project is to apply what you have learned in class to industries and practices of your own choosing. The project
presentations at the end of the course will give students a chance to get exposed to supply chain practices in a broad
range of companies and industries. Each group will have 20-25 minutes to make their presentation.

You can choose from two possible types for your final project (see sample outlines below):
1. “Case study”: Analyze the supply chain process of a company or a business unit of a company, and suggest any
improvements to be made (A case study could also represent opportunities for new business models).
2. “White paper”: Study supply chain practices in industry from the point of describing risks, benefits, best practices
along with industry examples of each.

To start, a 1-page project proposal (one per group) should be submitted by 6pm on Wednesday, April 25th. The
goal is to ensure that you have selected a project and can spend the remaining six weeks working on it. The project
proposal should include the following items:
• Group members (with emails listed)
• Project title
• Description
• Plan (bullet points outlining how you will complete the project by the due date)

The instructor will be happy to discuss with individual groups about their projects and give feedbacks during any phase
of their projects.

Case Study: Analyze an existing supply chain process and suggest improvement

Specifically, your group needs to choose an organization and analyze its supply chain strategy and practice. The
organization can be one you know well or one that you would like to learn more about. When choosing a company (or
operating unit) to study, think about how you will access data in order to evaluate the company’s supply chain strategy.
For your analysis, you can draw upon secondary data (e.g., company annual reports, analyst reports, articles from the
press) and primary data (e.g., interviews, personal experience with the company). You may select a company that we
have studied in class, but if you do this you must examine an issue (or issues) different from what we examined in class.
Please remember that the best studies offer not only compelling reasoning, but also facts to support those opinions.

Examples include but certainly not limited to:

• A study of the distribution system and store deliveries at McDonalds
• The design of supply chain network for a manufacturer of refrigeration equipment
• A study of inventory practices at a company with suggestions for improvement.

Please do not restrict yourself to the above list. It is just meant for illustration. The case study should consist of the
following two parts:

1. Background about the organization:

a. A description of the company (or operating unit) and its competitive environment
b. Brief historical information if applicable
c. A description of the company’s existing supply chain strategy and practice
d. An overview of the company’s supply chain objectives and challenges

2. Analysis and Recommendation (This part should center on the supply chain objectives and challenges identified in
part 1)

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a. An evaluation of the company’s supply chain strategy and practice by drawing on the concepts covered in
the course
b. Identify strengths and weaknesses in the company’s supply chain strategy and practice
c. A recommendation for improvement (this could involve several options to tackle the weaknesses or
challenges the company faces in managing its supply chain)
d. Discuss how the company will implement this improvement plan (e.g., how the company will build the
necessary supply chain capabilities)

White Paper: Study supply chain practices in industry

The objective here is to study supply chain practices in industry such as
• Impact of sustainability on supply chains
• Offshoring, nearshoring, and onshoring
• Supply chain issues in a specific industry: PC, Retailing, Automotive etc.

Please do not restrict yourself to the above list. It is just meant for illustration. The white paper presentation should
consist of the following items:

• A description of the supply chain practice including its key elements and its role in the overall supply
chain. Link the practice to supply chain drivers.
• Major risks/cost and benefits of the practice.
• Key issues in designing and implementing the practice
• Which companies is this practice ideally suited for? Which companies may it not be suitable for?
• Examples of companies that are successfully using the practice including best practices.
• Examples of companies that have been unsuccessful in their implementation of the practice and possible
reasons.

Once again, please do not feel bound by the above structure. It is simply meant to help you get started. If you
conduct research on the issues in a specific industry, identify the supply chain issues that offer a key competitive
advantage in the industry and discuss examples of where they have been successfully or unsuccessfully
implemented.

Grading:
As per the honor code, an individual should include his/her name on the final project only if they have
contributed to the analysis. I will collect peer evaluations for the final project at the end of the term and use them
for grades.

Your grade will be determined based on the quality of your presentation. Email me your presentation slide deck
prior to the final session. Some characteristics that I use to evaluate the quality of a presentation are as follows:
• Sound structure, based on a relevant conceptual framework.
• Comprehensive coverage of the relevant issues.
• Consistency and depth of analysis; specific rather than vague.
• Good balance and links between description, analysis and recommendations.
• When you draw on other sources, it is important that you carefully integrate the underlying reasoning into
your analysis.
• Well organized.

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Final Project: Deadlines & Deliverables

• Proposals due: Class 4 (April 25)
• Presentations due: Class 10 (June 6)

Presentation: Length and Format

• 20-25 minutes, including Q&A, per group.
• Please use (PowerPoint) slides. Have your presentation also ready on a memory stick.
• Make sure that your slide deck is a coherent document that clearly conveys the main points in each part
of your analysis.
• I leave it up to you to determine how many group members to deliver the presentation.

Presentation: Submission Guidelines

• In hard copy and electronic file. At the beginning of the last class session.
• E-mail me the file.

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Course Schedule
Class Date Module and Description Case/Readings Items Due

Module I: Supply Chain Basics and Matching Supply with Demand

1 4/4 Introduction to Supply Chain • (Case) Seven Eleven Japan
Wed Management • The greatest supply chain disasters of all
time
• Book chapter: Supply chain management
(the International Encyclopedia of the
Social & Behavioral Sciences)
2 4/11 Supply Chain Network Design • White Paper: Introduction to Strategic
Wed Supply Chain Network Design (Spinnaker
Management)
• Subaru’s Got a Big Problem

3 4/18 Global Network and Managing • Deloitte research study: managing in the Online Quiz #1
Wed Currency Risk face of exchange rate uncertainty
4 4/25 Multi-item Inventory Management • (Case) Llenroc Plastics Online Quiz #2
Project
Wed
Proposal
Module II: Managing Decentralized Supply Chains
5 5/2 Supplier Management and • (Case) BetaPharm Corp. (A) Online Quiz #3
Wed Procurement Auction • Implementing reverse e-auctions: A
learning process
6 5/9 Supply Chain Coordination and • Quest for best seller creates a pileup of Assignment #1
Wed Contracting returned books
• Blockbuster seeks a new deal with
Hollywood
• Disney sues blockbuster for $120 million
7 5/16 Sourcing and Offshoring • (Case) Polaris Industries Inc. Case Write-up
Wed
8 5/23 Sustainability and Green Supply • (Case) Walmart’s Sustainability Strategy Online Quiz #4
Assignment #2
Wed Chains
9 5/30 Guest Speaker (TBA) • Trial by fire Online Quiz #5
Wed Managing Risk in the Supply Chain • The Toyota group and the Aisin fire
• Preparing for the big one
10 6/6 Project Presentations & Course • Capgemini research study: Future Supply Project
Presentation
Wed Wrap-up Chain (executive summary)

Note: For detailed class topics and learning objectives, see the next page.

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Class Topics, Learning Objectives, & Assignments

Class 1: Introduction to Supply Chain Management

• What is supply chain management
• Discuss well-known supply chain disasters and lessons learned
• Introduce a framework for assessing strategic alignment of supply chains
• Case: Seven Eleven Japan

Class 2: Supply Chain Network Design

• Identify factors influencing supply chain network design
• Design or reconfigure a supply chain network to minimize costs (or maximize profits) by using
quantitative models
• Build Excel-Solver models to optimize network design decisions
• Understand the impact of uncertainty on network design decisions
• Use decision tree to incorporate uncertainty into network design decisions

Class 3: Global Network and Managing Currency Risk

• Discuss the differences between operational hedging or financial hedging
• Understand different financial hedging strategies to mitigate currency risk: advance currency purchase,
forward exchange contract, supply contracts with exchange rate clauses
• Design global networks to mitigate currency risk and understand the value of operational flexibility
• Build Excel-Solver models to optimize global networks under demand and currency uncertainty
• Assignment #1 will be distributed
• Read the assigned article and complete Online Quiz #1 before class

Class 4: Multi-item Inventory Management

• Analyze inventory data and assess inventory performance
• Learn to set the right safety stock policy and how it is affected by demand variability
• Introduce analytical tools required for managing inventory of multiple items such that meaningful service
levels are met
• Demonstrate how ABC classification can be used appropriately in multi-item inventory management
• Case: Llenroc Plastics
• Read the Llenroc Plastics case and complete Online Quiz #2 before class

Class 5: Supplier Selection and Procurement Auction

• Understand the differences between negotiation and auction in e-sourcing, their requirement of
organizational structure for execution, and applicability to a certain category of products/services
• Play a reverse auction game
• Learn how to implement reverse e-auction
• Case: Procurement at Betapharm Corp. (A)
• Read the assigned article and the Betapharm case and complete Online Quiz #3 before class

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Class 6: Supply Chain Coordination and Contracting

• Understand the double-marginalization problem in decentralized supply chains
• Learn how to achieve supply chain coordination via structured contracts
• Learn how to structure buyback contracts and revenue sharing contracts
• Understand the role of structured contracts in profit allocation and risk sharing
• Assignment #2 will be distributed
• Submit Assignment #1 is before class

Class 7: Sourcing and Offshoring

• Introduce a framework for strategic sourcing
• Learn to use total cost of ownership in making sourcing decisions
• Understand the difference between outsourcing and offshoring
• Learn to compute total landed cost to compare the performance of onshoring, nearshoring, and offshoring
• Case: Polaris Industries, Inc.
• Submit the Polaris case write-up before class

Class 8: Sustainability and Green Supply Chains

• Understand reasons why companies improve sustainability
• Understand the impact of environmental legislations on manufacturers’ responsibility for their products
when they are discarded
o Example: Europe Union’s WEEE directive and European Recycling Platform
• Understand how sustainability strategies can drive value in supply chains
• Identify opportunities and challenges in sustainable supply chain management
• Case: Walmart’s Sustainability Strategy (A)
• Read the Walmart’s case and complete Online Quiz #4 before class
• Submit Assignment #2 is before class

Class 9: Managing Risk in the Supply Chain & Guest Speaker

• Understand the characteristics of supply disruptions
• Understand the differences between operational mitigation and contingency approaches
• Identify the best mitigation approach for given supply chain risks
• Guest speaker with expertise in global supply chain management (TBA)
• Read the assigned articles and complete Online Quiz #5 before class

Class 10: Project Presentations & Course Wrap-up

• Project presentations
• Challenges and opportunities in future supply chains
• How to pursue a career in supply chain management
• Submit presentation slide deck before class

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