NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Supply Chain Management
Internal Assignment Applicable for June 2018 Examination

Assignment Marks: 30

Instructions:

 All Questions carry equal marks.

 All Questions are compulsory
 All answers to be explained in not more than 1000 words for question 1 and 2 and for
question 3 in not more than 500 words for each subsection. Use relevant examples,
illustrations as far as possible.
 All answers to be written individually. Discussion and group work is not advisable.
 Students are free to refer to any books/reference material/website/internet for attempting
their assignments, but are not allowed to copy the matter as it is from the source of
reference.

 Students should write the assignment in their own words. Copying of assignments from
other students is not allowed.

 Students should follow the following parameter for answering the assignment questions.

For Theoretical Answer For Numerical Answer

Assessment Parameter Weightage Assessment Parameter Weightage
Introduction 20% Understanding and usage 20%
Concepts and Application 60% of the formula
related to the question Procedure / Steps 50%
Conclusion 20% Correct Answer & 30%
Interpretation

1. You are a SCM consultant appointment by a Pharma company who wants to lease a
warehouse in a Metro like Mumbai. Considering short term life cycle of following
FIFO, maintaining safety stocks & quick retrieval is extremely critical. Considering
high rentals in Metro, leasing space is equally critical. Movement of material fairly
 NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Supply Chain Management
Internal Assignment Applicable for June 2018 Examination
depends on -customer’s requirement as forecasted; the process of which is fairly
established. Please suggest steps that consultant should keep in mind to suggest
solution to his Pharma clients for inventory management. Do you think VMI concept
may help here for non-shelf life kind of items here?
(10 Marks)

2. With the Independence Day around the corner, Small Basket a grocery retailer has
announced “Drop till you shop” offer wherein it is offering online groceries at rock
bottom prices. Tempted by the attractive prices, Mrs. Chandru decides to shop using the
Small Basket app. When she browses the app, she discovers too many appealing deals,
and as a result shops much more than what she normally would have. When Small
Basket launched this scheme in 2015, they sold goods worth Rs. 26 million. Encouraged
by the response, they ran the scheme for three days in 2017. During this three day period,
approximately two million people shopped for a variety of produce. There were reports
that the company experienced out of stock situation for stocks of several popular items
(grocery and staples, fruits and vegetables) that had been exhausted. Predicting the
demand for such schemes is always a tricky job. How do you think Small Basket can
forecast better to avoid stock-outs in this case? Do firms that forecast correctly rely on
cross-functional as well as cross-organizational trust? (With suppliers and distributors).
Justify your answer. (10 Marks)

3. Starbucks is pretty much a household name in India now. But like many of the most
successful worldwide brands, the coffee shop giant has been through its periods of
supply chain pain. In fact, during 2007 and 2008, Starbucks leadership began to have
serious doubts about the company’s ability to supply its 16,700 outlets globally. As
in most commercial sectors at that time, sales were falling. At the same time though,
supply chain costs rose by more than $75 million.
 NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Supply Chain Management
Internal Assignment Applicable for June 2018 Examination

Supply Chain Cost Reduction Challenges

When the supply chain executive team began investigating the rising costs and
supply chain performance issues, they found that service was indeed falling short of
expectations. Findings included the following problems
 Fewer than 50% of outlet deliveries were arriving on time
 A number of poor outsourcing decisions had led to excessive 3PL expenses
 The supply chain had, (like those of many global organisions) evolved, rather
than grown by design, and had hence become unnecessarily complex

The Path to Cost Reduction

Starbucks’ leadership had three main objectives in mind to achieve improved
performance and supply chain cost reduction. These were to:
 Reorganize the supply chain
 Reduce cost to serve
 Lay the groundwork for future capability in the supply chain
In order to meet these objectives, Starbucks divided all its supply chain functions
into four key groups, known as “plan” “make” and “deliver”. It also opened a new
production facility, bringing the total number of U.S. plants to four. Next, the
company set about terminating partnerships with all but its most effective 3PLs. The
remaining partners were then managed via a weekly scorecard system, which was
aligned with renewed service level agreements.

Supply Chain Cost Management Results

By the time Starbucks’ supply chain transformation program was completed, the
company had made savings of more than $500 million over the course of 2009 and
2010, of which a large proportion came out of the supply chain, according to Peter
Gibbons, then Executive Vice President of Global Supply Chain Operations.
 NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Supply Chain Management
Internal Assignment Applicable for June 2018 Examination

a. What is the significant and substantial change according to you is taken by

Starbucks to improve on overall performance of their supply chain.
(5 Marks)

b. How do you think objective laid down by Starbucks Leadership would have
helped them to achieve this sustainable improvement in supply chain?
(5 Marks)

***************