International studies DEM

STUDY YEAR 2019-2020

EXAM : International supply chain management 1

VERSION (only if it’s necessary) :

MODULE CODE/STUDYGUIDE NUMBER(SIS): 1018ISCHTS

STUDY + YEAR : IB1; 2020

DATE : July 1, 2020

TIME (from - till) : 12:00 – 13:30

NUMBER OF PAGES (including front page) : 5

ALLOWED : course material

(Example dictionary, law book, calculator)

LECTURERS : Ms. Habiba Khan

Mr. Maarten van Amerom
Mr. Erik van den Thillart
Mr. Paolo Scala
Ms. Margarita Bagamanova

Total points: 48; Caesura = 27

SUCCESS WITH YOUR EXAM!

Name Yoanna Hristova

Number 500827746
Class IB1P1
Teacher Ms. Margarita Bagamanova

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Case study- AHold

Ahold is one of the leading supermarket chains in Europe and the USA. With sales over € 28 billion, it
operates about 1100 stores in Europe and the USA. One of the main supermarket chains in the
Netherlands is Albert Heijn. This operating company is the leading edge in applying new concepts in
retail and supply chain management.

Modern retail thinking centers on the term ECR: Efficient Consumer Response. ECR means that the
consumer is the trigger for the supply chain process within the food chain.

Questions

1. In chapter 1 of the ‘Guide to Supply Chain Management’ book, the authors describe the Supply
Chain Architecture. Please give an example of an ipothetical Albert Heijn Extended Supply Chain
architecture. (4 points)

2. How can Ahold take advantage of the ECR? What advantages can be achieved by its
implementation? (4 points)

Case study - Apple's Supply-Chain Secret? Lasers.

About six years ago, Apple design guru Jony Ive decided he wanted a new feature for the next MacBook:
a small dot of green light above the screen, shining through the computer’s aluminum casing to indicate
when its camera was on. The problem? It’s physically impossible to shine light through metal. Ive called
in a team of manufacturing and materials experts to figure out how to make the impossible possible,
according to a former employee familiar with the development who requested anonymity to avoid
irking Apple. The team discovered it could use a customized laser to poke holes in the aluminum small
enough to be nearly invisible to the human eye but big enough to let light through. Applying that
solution at massive volume was a different matter. Apple needed lasers, and lots of them. The team of
experts found a U.S. company that made laser equipment for microchip manufacturing which, after
some tweaking, could do the job. Each machine typically goes for about $250,000. Apple convinced the
seller to sign an exclusivity agreement and has since bought hundreds of them to make holes for the
green lights that now shine on the company’s MacBook Airs, Trackpads, and wireless keyboards.

Questions

3. In chapter 3 of “Guide to supply chain management”, Colin Scott et al., the concept
category sourcing is introduced. Define category sourcing in your own words. (4 points)

4. Part of the category sourcing process is profiling the category group. In this step a
category sourcing (CS) team will establish how many suppliers there are and what
power they have. According to the case description, and based on the sourcing category
matrix adapted from Kraljic (1983), what is the appropriate category group for apple’s
lasers? Explain your answer. (4 points)

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Case study – IKEA BILLY Bookcase
Source: NewsroomIKEA.com, 2016 (adapted)

At IKEA we believe that automation is the key to providing good jobs and quality products at affordable
prices. Our largest BILLY bookcase supplier, Swedish Gyllensvaans Möbler, has more than doubled their
efficiency in the last 15 years. Today, each co-worker produces on average 33000 products per year,
compared to 13000 in 2001. “We have always tried to stay at the forefront of technological
development. Automation has been a necessity to us. You can’t produce in a high cost country and sell
to the rest of the world unless you invest in efficient production set-ups,” says Erik Gyllensvaan, CEO and
part owner at Gyllensvaans. The number of employees at Gyllensvaans has remained approximately 200
since 2001. However, the amount of furniture produced by each co-worker has constantly increased due
to more and more automated production. The most significant increase in efficiency took place between
2008 and 2010, when Gyllensvaans went from an annual output per worker of 24000 to 31000 products.
The increase was made possible by investments in a completely new production set-up, with high
automation and less manual work Many smaller improvements are made on a daily basis. The machine
operators make follow-ups on all the daily production errors in order to find bottlenecks and areas in
need of improvements. “We are especially trying to find production errors that happen often and are
easy to adjust, but sometimes bigger improvements are needed. The last, bigger improvement of this
packaging line was made this Christmas,” says Ulrika Waller, machine operator of packaging line 7 at
Gyllensvaans. Packaging line 7, built in 2006, is one of the most automated lines at Gyllensvaans. It is
operated by three machine operators and packs BILLY bookcases with folded backs at a speed of up to
18 bookcases per minute. The current production at Gyllensvaans is adapted to product cycles running
for many years. Increasingly however, more flexible production lines are required due to shorter
product cycles. Currently, Gyllensvaans is running a pilot test on packaging robots with optical
monitoring. This new technology opens up for a faster and more adaptable packaging line.

Questions

5. There are five classic manufacturing methods according to chapter 4 of the book “Guide to
Supply Chain Management” (Make). What type of production method is used to manufacture
the “BILLY Bookcase”? Explain your answer. (4 points)

6. Chapter 4 of the book “Guide to Supply Chain Management (Make) refers to how lean thinking
can improve the make process. Provide one example in the Billy bookcase of lean
manufacturing. Explain your answer. (4 points)

Case study - Zara logistics

Source: thecasecenter.org, 2014 (adapted)

Until 2003, Zara had only one distribution center next to its headquarters in Arteixo. It occupied a five
story building with 500,000 square meters of storage space and used the latest technology. Almost all
products passed through this large and sophisticated distribution center. However continued expansion
of the company had necessitated addition of new distribution capacity. In mid-2001, when Arteixo
distribution center was working at essentially 50% capacity, Zara announced that it would build an
additional distribution center in Zaragoza (Spain). Costing € 120 million, the 190,000 square meter
Zaragoza distribution center was completed in October 2003. It was allocated to distribution of most

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women garments globally. In 2007, Zara opened a third major distribution center, with 180,000 square
meters storage space, in Meco, near Madrid. Costing € 150 million, Meco specialized in children
garments and few other items. The scale of operations in these distribution centers was impressive. The
three DCs handled over a million pieces in a typical day in early 2014, and had the capacity to do much
more. Fast changing fashion garments represented the major share of these items, resulting in a very
large number of stock keeping units (SKUs), which created additional complexity in inventory
management, order picking and fulfillment. Zara used only trucks and air for transporting orders from its
distribution centers to stores. Since orders for each store normally required items from all three
distribution centers, they were consolidated in Zaragoza. The shipments did not stay more than a few
hours in Zaragoza. Stores in most of Europe were supplied by trucks, carrying Zara’s name but owned
and operated by contractors. These truck from Arteixo and Meco to Zaragoza and from Zaragoza to
stores ran on published schedules (like bus timetables). Shipments by air were also on published
timetables using scheduled flights. In some countries, the contractors had established “docking stations”
where the shipments from Spain were transferred to smaller trucks for local distribution. Typically,
stores in Europe received their orders in 24 hours, in the United States in 48 hours and in Japan in 48 to
72 hours. Speed was clearly an overriding concern; as Lorena Alba (General Director of Logistics) put it:
“For us, distance is not measured in kilometers, but in time.” For example, orders from stores in Tokyo
would be usually on the flight next morning and in Japan the following day, picked up by a third party
contractor and delivered to the Zara stores the next day. The goods could be displayed as soon as they
were taken out of the truck because they had already been labeled and priced.

Questions
7. According to the description given by the above case study, what type of warehouse represents the
Distribution Center in Zaragoza? (4 points)

8. As it is written in the Zara case description, Zara shipped its products using both trucks and
airplanes. Please mention one advantage and one disadvantage when using each transportation
mode. (4 points)

Case study - Zara returns

Source: https://www.zara.com/nl/en/help/how-to-return-h37.html

These are the Zara terms and conditions regarding returns (End Consumer to Zara):
You have 30 days from the shipping date to return your purchase from Zara.com FREE OF CHARGE.
These are the options for returning your items:

 At a Zara store: Take your order and receipt to any Zara store in the same country/region in
which you made the purchase.
 At a drop-off point: Access your order information through request a return. If you placed your
order as a guest, you will be able to access this information through the link included in the
order confirmation email. We will send you a label so that you can take the items you wish to
return to the PostNL.

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Questions
9. Chapter 6 of the book “Guide to Supply Chain Management” mention 5 stages of the product return
process. To which stage is the above description referring? (4 points)

10. Chapter 6 of the book “Guide to Supply Chain Management” describes the “Golden rules” for return
management. Please give an example of how Zara considers these golden rules in their return
management. (4 points)

11. Chapter 10 of the book “Guide to Supply Chain Management” introduced two different types
of customers: “Internal” and “external”. Please give an example of Zara’s internal and
external customer. (4 points)

12. Evaluating the customer service, is critical for any organization, for Zara as well. Especially
because providing a certain service level costs money to the organization. In the month of
May, out of 130 returned items, only 45 were returned within 30 days by the end-
consumers. What would be the rate of Zara “FREE OF CHARGE” returns? (4 points)

Answers: (please write your answers below)

1. A hypothetical extended supply chain for AH could be their oat meals. The cardboard boxes
are produced by one supplier, then the oats are produced by another, the dried fruit and
nuts by a third. All of these are bought by an oatmeal company which supplies Albert Heijn.
Albert Heijn then sells to the end customers.
2.
3. Concepts where the goods or services provided by an entity are broken down into distinct
classes of similar products. This strategy organizes procurement tools to concentrate on
different spending areas.
4. The appropriate category group for apple’s lasers is “critical” because these are items
bought in large quantities and can be more expensive and high in risk which describes
apple’s lasers. Without them not all of the features can be added to the devices.
5. The “BILLY Bookcase” is provided on a repeat basis in large volumes and process is divided
into a chain of activities that take place after each other which describes batch
matufacturing process.
6. As lean manufacturing suggests BILLY Bookcase uses the right level of man, machine and
material to produce what is required. The company started working way more efficiently
adding more automated production but leaving the employee number the same an
constantly makes improvements.
7. Cross docking  because they are unloading materials from an incoming and loading these
materials directly into outbound trucks, trailers, or rail cars, with little or no storage in
between.

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8. Air transport is very fast but the disadvantage is that it is expensive, for trucks it is the slow
transportation but they are reliable.
9. Support