Supply Chain Management Case Study

THE DEAR JOHN MOWER COMPANY

The Dear John Mower Company is an old-line manufacturer of gasoline-powered lawn mowers and riding mowers. Increased competition has resulted in Dear John’s share of the mower market declining to 10 percent. Profits have declined to the point that many are questioning Dear John’s ability to survive.

The firm employs three engineers who are responsible for the development and design of all new mowers. When the engineers are not involved in the development of new products, they apply their energy to value analysis work in an effort to engineer costs out of the firm’s products.

Material costs at Dear John range from 55 to 65 percent of the cost of goods sold. Supply management has been a routine function, responsible for issuing purchase orders confirming the sourcing decisions of the engineers and for issuing order releases against these purchase orders. Recently, Mr. Tom Dalton, CPM, was hired in an effort to reduce the cost of purchased materials. Mr. Dalton had some success through the application of price and cost analysis and professional negotiation concepts. Material costs have dropped an average of 12.5 percent. These savings have been the basis of a badly needed shot in the arm for Dear John’s financial report.

Tom believes that he’s done about all he can to reduce costs—short of getting himself and his key suppliers involved early in the design of new mowers. Tom has initiated discussions on this approach with John Steel, chief of engineering—to no avail. Mr. Steel is adamant that his engineers are the best in the industry and develop the industry’s finest mowers. He acted insulted when Tom suggested that early supply management and early supplier involvement would improve Dear John’s profitability.

Having had no success with engineering, Tom has initiated discussions on the matter with Mr. Helmich, COO of Dear John. Mr. Helmich has requested Mr. Steel and Mr. Dalton to meet with him to discuss the merits and possible implementation of early supply management and early supplier involvement.

As a consultant for THE DEAR JOHN MOWER COMPANY, you are required to assess the aspects of Supply Chain Management and use your own assumptions to answer the following questions:

QUESTION 1

Discuss the advantages of the inclusion of supply management and prequalified suppliers.

(10 Marks)

QUESTION 2

Discuss the disadvantages of excluding supply management and suppliers from the new product development process.

(10 Marks)

QUESTION 3

Assuming that the three executives agree on early involvement of supply management and suppliers, develop a plan to implement this new way of doing business.

(10 Marks)

END OF QUESTION

ANSWER:-

1. Massachusetts Institute of Technology Centre for Transportation Studies, “Integrated Supply Chain Management (ISCM)” is an integrated and process-oriented approach to procuring, delivering and producing products and services to customers. ISCM includes internal operations, sub-suppliers, suppliers, retail customers, trade customers and end users. It covers management of information material and fund flows.

Every organization is a part of one or more supply chain. Weather a company provides a service, sells directly to the end customer, manufactures a product or even extracts material from earth, it is characterized within its supply chain. Earlier, organizations placed little emphasis on organizations within their supply chain network. However, supply chain management had become a forefront of management’s attention due to three major developments(Balsmeier 1996)

1. The information revolution

2. Customer demands in areas of service and product cost, delivery, quality, technology and concept of cycle time brought about by increased global competition.

3. Emergence of newer forms of inter-organizational relationships.

These developments have nurtured the emergence and integration of supply chain approach. The following model illustrated the integration of supply chain in all the three developments mentioned above.

2. (Balsmeier 1996)The Supply Chain is considered as the set of frameworks and processes that have helped organizations in development and delivery of products. The supply chains represents the complex relationships of an organization with its trading partners through whom it sources materials, manufactures products and delivers products or services to the customers. The supply chain links all the activities in the procurement, transformation and storage of raw materials and intermediate products, and sale of finished goods.

The entire Supply Chain (Figure 1) is looked across my Supply chain management, rather than a single entity or level. The SCM aims to increase alignment and transparency of supply chain’s configuration and coordination, regardless of corporate or functional boundaries.

Supply Chain Management is considered as the integrated process of the management of all the networks of the businesses that are interconnected to each other. The Supply Chain Management is involved towards the provision for all product and services that are demanded by the customers. (Harland,1996). The SCM includes the varies tasks such as raw materials, work in process, inventory management and also the finished goods moment from the origin point to the point where they will be consumed.

3. Integrating the supply chain to improve logistics efficiency is a key challenge. The composition today is not between the companies but between the supply chains. Hence, for the supply chains to be successful, it should integrate the three individual business processes of procurement, manufacturing, and distribution by consolidating the sub-components in each of the above functional areas(Ashkenas. R 1995).

Procurement: This is one of the major cost drivers in the supply chan. Procurement cost is influenced by the following factors:

1. The way procurement decision is made

2. Procedures adopted in the procurement process

3. Relationship with suppliers

4. Firms credibility

5. Market Intelligence

Procurement cost can be controlled through long-term relationships with suppliers by considering the supplier as an extension of the manufacturing facility. The philosophy of co-partnership is based on the sharing of resources and benefits on a long term basis. The major step in this process is reduction in supplier’s base and induction of a few reliable suppliers into the supply chain, who are ready to work for the firm and can align themselves with the policy framework and requirements of the supply chain.

Material Requirement Planning is a critical element in the procurement process. In an integrated supply chain, material planning will have a cascading effect in the entire supply chain. Hence, in co-partnership arrangements the material planning will cover inventory requirements in the entire supply chain, including both firms and suppliers.

Processing: For a lean supply chain the emphasis today is not on curtailing the processing/ manufacturing cost through economies of scale, but by curtailing the huge inventory carrying cost resulting from mass production ahead of demand. In the past, the emphasis was on building mega capacity factories to produce standard products in millions in order to reduce manufacturing costs and flood the market with low priced products. This approach resulted in the build up of a large reservoir of finished goods, which remain unsold and dead due to its inability to respond to the changing needs of the customers. Hence, today firms instead of banking on cost reduction through economies of scale are thinking of strategies of reducing the total supply chain cost through manufacturing flexibility to rapidly respond to changing markets demands of products volumes and varieties.

Distribution: Traditionally, the role of distribution in the business process is warehousing transportation. However, in the supply chain model, the major task of distribution is the management of demand, i.e. to make available the right product, at the right place, at the right time, and at the least cost. Demand management covers all the activities involving anticipating the customer requirements of products and fulfils that requirements against defined customer service norms. Requirement fulfilment is done through proper distribution network.

The first and foremost task in demand management is to forecast customer requirement accurately. This is done only if the firm is able to satisfy the customer as per the service level acceptable to the customer. Logistics play a vital role in understanding the demand through improved informational flow by way of quick response to customer’s demands.

Dale Carnegie’s Golden Book

Principles from How to Win Friends and Influence People


Become a Friendlier Person

1. Don’t criticize. Condemn or complain.

2. Give honest, sincere appreciation.

3. Arouse in the other person an eager want.

4. Become genuinely interested in other people.

5. Smile.

6. Remember that a person’s name is to that person the sweetest and most important sound in any language.

7. Be a good listener. Encourage others to talk about themselves.

8. Talk in terms of the pther person’s interests.

9. Make the other person feel important and do it sincerely.


Win People to Your Way of Thinking

10. The only way to get the best of an argument is to avoid it.

11. Show respect for the other person’s opinion. Never say, “you’re wrong”.

12. If you are wrong, admit it quickly and emphatically.

13. Begin in a friendly way.

14. Get the other person saying, “yes, yes” immediately.

15. Let the other person do a great deal of the thinking.

16. Let the other person feel that the idea is his or hers.

17. Try honestly to see things from the other person’s point of view.

18. Be sympathetic with the other person’s ideas and desires.

19. Appeal to the nobler motives.

20. Dramatize your ideas.

21. Throw down a challange.


Be a Leader

22. Begin with praise and honest appreciation.

23. Call attention to people’s mistakes indirectly.

24. Talk about your own mistakes before criticizing the other person.

25. Ask questions instead of giving direct orders.

26. Let the other person save face.

27. Praise the slightest improvement and praise every improvement. Be “hearty in your approbation and lavish in your praise”.

28. Give the other person a fine reputation to live up to.

29. Use encouragement. Make the fault seen easy to correct.

30. Make the other person happy about doing the thing you suggest.


Principles from How to Stop Worrying and Start Living

Fundamental Principles for Overcoming Worry

1. Live in “day-tight compartment”.

2. How to face trouble:

    a. Ask yourself, “What is the worst that can possibly happen?”

    b. Prepare to accept the worst.

    c. Try to improve on the worst.

3. Remind yourself of the exorbitant price you can pay for worry in terms of your health.


Basic Techniques in Analyzing Worry

1. Get all the facts.

2. Weigh all the facts – then come to a decision

3. Once a decision is reached, act!

4. Write out and answer the following questions:

a. What is the problem?

b. What are the causes of the problem?

c. What are the possible solutions?

d. What is the best possible solution?


Break the Worry Habit Before it breaks You

1. Keep busy.

2. Don’t fuss about trifles.

3. Use the law of averages to outlaw your worries.

4. Cooperate with the inevitable .

5. Decide just how much anxiety a thing may be worth and refuse to give it more.

6. Don’t worry about the past.


Cultivate a Mental Attitude that will Bring You Peace and Happiness

1. Fill your mind with thoughts of peace, courage, health and hope.

2. Never try to get even with your enemies.

3. Expect ingratitude.

4. Count your blessings – not your troubles.

5. Do not imitate others.

6. Try to profit from your losses.

7. Create happiness for others.


The Perfect Way to Conquer Worry

1. Pray


Don’t Worry about Criticism

1. Remember that unjust criticism is often a disguised compliment.

2. Do the very best you can.

3. Analyze your own mistakes and criticize yourself.


Prevent Fatigue and Worry and Keep Your Energy and Spirits High

1. Rest before you get tired.

2. Learn to relax at your work.

3. Protect your health and appearance by relaxing at home.

4. Apply these four good working habits:

a. Clear your desk of all papers except those relating to the immediate problem at hand.

b. Do things in the order of their importance.

c. When you face a problem, solve it then and there if you have the facts necessary to make a decision.

d. Learn to organize, deputize and supervise.

5. Put enthusiasm into your work.

6. Don’t worry about insomnia.

GRIFFIN TANK CLEANING EXECUTION PLAN

0.0 Introduction


The purpose of this document is to provide a brief work scope to be carried out by International Shipcare partially awarded to Teranga S/B for removal of water and residue from 2 nos ballasting tanks for the purpose of preparing the tanks for full inspection and thickness gauging. The following are the data available:

i) 2 nos (P&S) Ballast tanks with capacity of 5000m3 each

ii) Both are assumed to be more than 90% full

iii) Tank dimensions are 50m X 6.3m X 22.9m

iv) Both tanks have corrugated bulkheads and double bottoms

v) It is assumed that the level of residue in the tanks shall not exceed 0.5m

vi) Tank 3 stbd contains a layer of oil but the amount is not known. This will be pumped into slop tank for disposal at a later stage.

vii) It is assumed that the water containment is only sea water and that the residue is considered a non toxic waste.



1.0 Task Pre-requisites



Before work can begin on the pumping out of water, the following must be carried out 24 hours before commencement of actual work.

i) Both tank manholes (all manholes) must be open and ventilated to atmosphere. Although the possibility of toxic gases buildup over the years is slim due to the tanks being full, the ventilation and subsequent gas test is mandatory

ii) The vessels balasting calculations should be in Order. It is assumed that the vessel is even keel before pumping out begins. It is the responsibility of the owner to provide the balasting calculations.

iii) A dipstick can be used as a basic measurement to gauge the level of oil in no 3 stbd tank.

iv) It must be confirmed by the owner that all the sea chests are in excellent condition and that that there will be no leakage into the double bottom once the water has been pumped out.

v) Proper Safety measures shall be mandatory and shall consist of minimum the following:

a) Coveralls

b) Workvests

c) Safety helmets, boots and gloves

d) Harnesses on standby

e) Authorised gas testers

f) Confined space entry JHA

vi) Transportation of all equipment from loadout point to vessel. Vessels crane must be utilized to offload equipment from supply boat. Maximum equipment weight is not expected to exceed 2MT





2.0 Job execution sequence



The job will be executed in the following sequence

1. Transportation of all equipment and loading onto vessel

2. Connection of pumps to power supply and connection/laying of hoses

3. Skimming of oil from no 3 stbd into slop tank. A dispstick wil be used to gauge the level of oil and when skimmed into the slop tank, 20% more water will be pumped to ensure that all oil water mixture has been removed.

4. Testing of water samples to be carried out by client before commencement of pumping water overboard

5. Commencement of pumping water overboard. Both tanks will be done simultaneously. The construction of the tanks means this has to be done in stages. Once one stage has been completed, a man has to be sent into the tank to reposition the hose to the next level.

6. Since the tank drawings are not available, it is assumed that the Ballasting tanks have double bottoms and corrugated bulkheads. As such, the water can only be pumped out to a certain level.

7. It is important to note that the actual level of residue/sludge at the bottom of the tanks cannot be ascertained at this time.

8. Once the water has been pumped out to the maximum level, residue removal will take place. Since the residue is only likely to contain mixture of sand, mud water and minimum debris, it is not considered a hazardous substance or toxic material. Unless the client objects, the majority of this residue can be safely pumped overboard.

9. The remainder of the residue will have to be cleared manually. Please note that this is a long painstaking and labor intensive process due to the bulkheads and double bottom providing restricted access. This will be done using buckets, shovels and pulley winches. Men will have to crawl through bulkheads and into the double bottom. They will then have to transfer the residue from section to section until it is convenient to be removed using a pulley and winch.

10. Residue will be disposed overboard unless client insists on treating residue as toxic wastes. Then, they will be loaded into open top containers and disposed onshore in accordance to DOE requirements. We feel however that this is not required.

11. Demobilisation of equipment and personnel

3.0 Project Schedule


The project duration is expected to be 15 days. This is based on daily transfer to and from vessel and working hours from 8am to 5pm daily.

Prince William Sound Drifting Incident

Chronology of Events


0620 hrs: Comm’s Centre guy reported to Duty Engineer after confirmed PWS slowly moving out from original position.

0621 hrs: All teams notified and immediately heading to ISC Base.

0630 hrs: First emergency respond team leaded by T/S Ater departed from base using Lynx boat.

0645 hrs: Lynx boat arrived vessel and team embarked. They prepared for emergency anchor release on port side but then the anchor failed to fall by gravity. Start swapping new cable to port anchor.

0700 hrs: Second emergency team leaded by Capt. Edmund departed from ISC Base using Cougar boat.

0715 hrs: All personnel embarked vessel. Vessel GPS position at 5⁰ 11.570’N 115⁰ 19.691’E and SOG: 0.4

0720 hrs: Electrical panel for anchor windlasses checked and prepared by electrician.

0734 hrs: Start port anchor windlass (hydraulic powered).

0735 hrs: Start lowering anchor until 2 shackles down.

0745 hrs: Stop port anchor windlass. Vessel GPS position at 5⁰ 11.571’N 115⁰ 19.724’E SOG: 0.3

0755 hrs: Pilot onboard. Vessel GPS position at 5⁰ 11.573’N 115⁰ 19.746’E SOG: 0.4

0800 hrs: Vessel GPS position at 5⁰ 11.579’N 115⁰ 19.768’E SOG: 0.3

0807 hrs: Tugboat Baracuda approaching vessel fwd side.

0809 hrs: Start heaving up port anchor. Another team picked up tugboat towing line using rope.

0814 hrs: Tugboat towing line made fast, secured to vessel.

0815 hrs: Vessel GPS position at 5⁰ 11.579’N 115⁰ 19.768’E SOG: 0.3

0817 hrs: Tugboat starts towing vessel to new position.

0820 hrs: Anchor fluke heaved up until touch just about on waterline. Brake applied and windlass stopped.

0900 hrs: Vessel GPS position at 5⁰ 10.714’N 115⁰ 19.711’E SOG: 0.3

0920 hrs: Start port anchor windlass.

0930 hrs: Vessel arrived at new position: 5⁰ 10.631’N 115⁰ 19.674’E SOG: 0.2

0933 hrs: Start lowering port anchor.

0935 hrs: First shackle on deck. Vessel GPS position at 5⁰ 10.578’N 115⁰ 19.666’E SOG: 0.2

0938 hrs: Second shackle on deck. Vessel GPS position at 5⁰ 10.574’N 115⁰ 19.658’E SOG: 0.2

0942 hrs: Third shackle on deck. Vessel GPS position at 5⁰ 10.568’N 115⁰ 19.646’E SOG: 0.2

0945 hrs: Fourth shackle on deck. Vessel GPS position at 5⁰ 10.602’N 115⁰ 19.654’E SOG: 0.2

0953 hrs: Fifth shackle on deck. Vessel GPS position at 5⁰ 10.621’N 115⁰ 19.692’E SOG: 0.2

0955 hrs: Sixth shackle on deck. Vessel GPS position at 5⁰ 10.638’N 115⁰ 19.688’E SOG: 0.1

0958 hrs: Seventh shackle on deck. Vessel GPS position at 5⁰ 10.668’N 115⁰ 19.695’E SOG: 0.0

1002 hrs: Eighth shackle on deck. Vessel GPS position at 5⁰ 10.667’N 115⁰ 19.699’E SOG: 0.1

1007 hrs: Eighth shackle on the water. Vessel GPS position at 5⁰ 10.664’N 115⁰ 19.694’E SOG: 0.1

1009 hrs: Windlass brake applied and stopper bar secured. Port anchor windlass stopped.

1010 hrs: Vessel GPS position at 5⁰ 10.666’N 115⁰ 19.697’E SOG: 0.0

1012 hrs: Tugboat towing line disconnected from vessel.

1013 hrs: Tugboat leaving vessel area.

1014 hrs: Start stbd anchor windlass (hydraulic powered).

1017 hrs: Pilot disembarked from vessel.

1018 hrs: Start heaving up stbd anchor chain.

1020 hrs: Vessel GPS position at 5⁰ 10.671’N 115⁰ 19.674’E SOG: 0.1

1038 hrs: The eleventh shackle reached on deck with end chains. All other 10 shackles found lost.

1040hrs: Windlass brake applied and stopper bar secured. Stbd anchor windlass stopped.

1040 hrs: All completed. Vessel GPS position at 5⁰ 10.682’N 115⁰ 19.676’E SOG: 0.0



Prepared by:

M. Ashraf Kamal

Duty Engineer of the day

M. T. APOLLO 16 ANCHOR DRAGGING

Date incident occurred: 20th January 2011


Initial lay-up position: 05º 08.25’N, 115º 20.32’E

Location: Brunei Bay Lay-up Anchorage

The incident happened on 20th of January 2011. Tanker vessel Apollo 16, drifted from its anchor position at approximately 0.3 knots and off position of about 0.72 nautical miles from her original layup position.

ISC communication center received an alert from the vessel at 0710hours reporting that the vessel is dragging and moving in a NW’ly direction.

Calls were immediately made in accordance with the ISC Emergency Response Flow Chart. Emergency Response team left the base at 0720 hours to Apollo 16 for immediate response. They arrived at 0737 hours, assessed the situation and began preparation for operating windlass and winch machinery. Once all machinery checked and run, the (S) anchor was lowered under power to 2 shackles on deck to stop the drift.

Drafts upon arrival (P) Forward 9.2m; Mid 9.8m; Aft 10.2m
                            (S) Forward 9.2m; Mid 9.8m; Aft 10.2m

Immediately after, the (P) windlass was run to recover the (P) anchor chain. It was hoisted to the 9th shackle where it was noticed the common link end was broken. The chain was hoisted in all the way up into the hawse pipe and secured.

Pilot boarded at 0905, plans for re-anchoring were discussed. With the tug boat made fast, vessel was then towed to planned position Lat N 05 08.1 & Long E 115 20.7, at 0950 hours.

1115 hours, vessel arrived at the re-anchoring position and (S) anchor was lowered under power.

The anchor chain was lowered to 8 shackles in the water and all secured.

The tug was cast off and the Pilot’s away soon after.

The new anchor position of the vessel Apollo 16

Lat N 05 08.28; Long E 115 20.74

GPS alarm settings were checked and all parameters reset to the current anchor position.

With all secured the Emergency Team departed the vessel back to the base.

End of Report

ISC – Hsseq