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Simple Supply Chain Case Study (PGCBM 17)

# Simple Supply Chain Case Study (PGCBM 17)

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05/15/2011

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Supply Chain of Nathu’s refreshment store
As per project requirement, we need to give example of a supply chain, as we know.Yesterday during my break, I was standing in line of filter coffee at Nathu’s refreshment.As my turn came, Nathu suddenly stopped the filling the steel cups and looked at me,then he looked at his assistance. I came to know that he is out of glasses. After fewminutes waiting, his assistant brought washed coffee glasses and Nathu served me a glassof hot filter coffee.While drinking coffee, what brew in my mind that why I need to wait for few minuteswhen, coffee was there, Coffee maker was there, Sugar was there.. but GLASS was notthere. Thus Steep glass was the bottle neck in Nathur’s supply chain.As per tradition, Filter coffee has to be served in steel glasses, quantity of availableglasses was major factor in analyzing Nathu’ supply Chain.
Lets assume,
a)Total No of Glasses, Nathu have;
40
b)Cycle Time:
4 customers per minute
( Nathu can fill 4 glasses of coffee inminute)c)Cycle time for 40 customers:
10 mins.
d)Average time taken by a customer to drink coffee/tea :
10 mins
e)Collection and washing time :
5 mins
f)Time glasses will be ready to re-use =
15 mins
Thus 41th customer of Nathru’ coffee has to wait for
5 mins ( 10<15)
to get filter coffee.
Bottleneck in our system is ; GLASS AVALIABALITY. Nathu can’t service morecustomer than number of glasses, he has at the moment.
If Nathu reduces the cycle time from 4 customers per minute to 2 customer per minutethen, 40 customers will take 20 minutes, as
20>15
, none of Nathru’s customer has to waitfor coffee due to unavailability of glasses. In other hand, this approach will doublecustomer’s waiting time in queue.

Nathu has two choices in designing his supply chain:1)Decoupling point towards supplier2)Decoupling point towards consumerScenario 1: Decoupling point towards supplier
Nathu’s supply chain has three activities from supplier to customer.
1) Order-taking 2) Preparation (Tea/coffee) 3) Delivery
If Nathu keeps warm milk ready and as customer desires, he adds Tea bag or coffee beans to make tea or coffee. Thus he holds milk in generic form till order arrives This isalso called,
Product Postponement
.By having this approach, Nathu has pushed decoupling point towards supplier
Figure 2: Product postponement in Nathus’ supply chainScenario 2: Decoupling point towards Consumer
If Nathu has ready made tea and coffe and served as per Customer choice, he has pushedDecoupling point, towards consumer.
10 mins for 40 customers
ORDER-takingPreparationDelivery
DP pointin Nathu’ssupplyChain
Customer givesOrder Order Preparation Customer drinks beverageGlass Collected andsubmitted for re-use
15 mins in Glass collection and washing