Solution Manual for
Supply Chain Logistics Management, 6th Edition Bowersox
CASE 01- 13 Solutions
End of Book Questions Solution Set
SCLM 5th Edition End of Chapter Questions and Answers
CASE 1
Integrated Logistics for SES/BAS
Overview
This case finds Maxwell Stevens, sales representative for Specialty Engineering Services (SES),
in a situation common to today’s competitive sales environment. His company, as a supplier to
major manufacturer Boston Aerospace Group (BAG), is faced with changing times. BAG is in
the midst of a ―changing of the guard‖ as Mr. Steven’s long-time contact, Nathan Benson,
retires. Benson’s successor, Tyler Pinto, brings a new set of supplier expectations to the fore of
BAG’s purchasing strategy. Over the years, the quality of competitors’ products began to match
SES. To keep BAG as a customer, SES must improve its logistical performance to meet rising
expectations.
The case illustrates the ―shrinking service window,‖ a concept describing increasing customer
expectations regarding service levels, that is, higher fill rates and shorter order cycles. In BAG’s
case, a change in leadership is responsible for the new, higher expectations. The change,
however, is indicative of the realization that logistics has become a strategic weapon.
SES must either match competitors’ service or face losing a major customer.
Answers
1. See diagram.
Stages adding value: SES packaging
Inbound transportation from suppliers Manufacturing
, Product delivery Matching orders to paperwork
Stages not adding value: Materials receiving
―Dwell time‖ at remote warehouse Materials inventory
2. Minimum performance cycle time: 10 days
Because SES normally maintains a seven-day supply of each compound, the minimum
performance cycle would include time for manufacturing, warehouse shipping
preparation, and delivery. Production is completed within 6 to 8 days; warehouse
operations take 3 to 6 days; and a customer within 200 miles may be served by SES
trucks on a twice-per-week delivery route. Thus, minimum performance cycle time
would be 10 days, assuming delivery is scheduled.
Maximum performance cycle time: 29 days
The maximum performance cycle (worst case scenario) may require SES to wait on an
order for more compounds from a primary supplier. Assuming maximum delivery time of
up to 9 days for a polymer compound, 8 days to complete production, 6 days spent at the
warehouse, and up to 6 days delivery on a common carrier, the maximum performance
cycle time could be 29 days.
3. Yes, it appears that the performance cycle can be improved through the use of 25 percent
and 15 percent suppliers. For example, Company 3 offers both a shorter delivery time and
a higher fill rate than Company 1 for both A and B. Company 2 offers both a shorter
delivery time and a higher fill rate than Company 4 for both C and D. Using more reliable
suppliers may result in higher prices on materials, but this can be mitigated by reducing
SES’s material inventories. Greater certainty on the part of suppliers reduces the need to
maintain high stocks of inventory.
4. Answers may vary. Operations time in both manufacturing and warehouse are long and
variable. Because the manufacture of polymer feedstock has become highly standardized,
SES should look for methods and technologies that can reduce production time.
Streamlining steps at the warehouse that do not add value is another option. Upfront
investment in operations improvements and resistance to change are key challenges to
consider.
5. Answers may vary. Tyler Pinto clearly views polymer feedstock to be a commodity item,
so product quality, competitive price, and shorter, reliable lead times can only be a
―qualifying criterion.‖ Selling to BAG on the next bid will require showing that SES can
offer at least these features, plus a value-added service that can serve as an ―order-
winning criterion.‖ For example, SES could offer unique information-sharing capability,
vendor-managed inventory service, special shipping arrangements, and so on. (See
Chapter 4.) Over time, customers will continue to want even shorter lead times and up to
a 100 percent fill rate. Companies like BAG will look for new ways to improve what they
offer to their customers, so they will need companies like SES to offer more value-adding
services, as well. In this way, supply chain management requires ongoing communication
and coordination as industries and markets evolve.
, Company 1
60% of A 15% of E
60% of B 15% of F
Company 2
25% of A 15% of C SES Truck
25% of B 15% of D
Company 3
15% of A 25% of E
15% of B 25% of F
Materials
SES Remote
Inventory Manufacturing
Warehouse
BAG
Company 4 Receiving
(1 week)
60% of C
60% of D
Company 5
60% of E
60% of F
Company 6
25% of C
25% of D
, CASE 2
Woodmere Products
Overview
From Woodmere’s perspective, the HomeHelp partnership offers substantial rewards, but at a
price. This case demonstrates the all-encompassing change that is sometimes required for a firm
to maintain long-term competitive success. Change is very difficult to achieve in organizations
large and small. Laborers, managers, and executives alike establish ―comfort zones‖ that are
difficult to break. The Case follows John Smith as he first studies the potential benefits of
refocusing production and logistics strategies before promoting the idea to top management.
Answers
6. Answers may vary.
Woodmere faces an ultimatum: either implement a time-based service strategy or lose the
HomeHelp business. Implementing the time-based strategy would require new
approaches to production and logistical operations, as well as significant investments in
technology. The changes are likely to affect the way Woodmere conducts business with
other customers and channel participants (i.e., suppliers and transportation providers).
HomeHelp issued the ultimatum to Woodmere Products. If Woodmere turns down the
opportunity, HomeHelp will have to look elsewhere for products and services.
Both firms stand to gain a potential competitive advantage by being the first in their
respective industries to adopt time-based logistics practices. Ideally, alliances should
create synergy, by which both firms succeed at levels unachievable when on their own.
Successful implementation will require significant investment from each firm.
7. Woodmere Products
Benefits
Exclusive relationship with HomeHelp, ensuring generous future revenues.
Competitive advantage that can carry over into other business.
Replaces inventory with information, which improves customer service and lowers
the cost.
Barriers
Significant investment.
Unfamiliar strategy.
Time-based logistics is new to the industry, so Woodmere would face the challenge
of figuring out how to implement the strategy effectively. Implementation would
likely require extensive trial-and-error efforts and investment.
Fear of relying on close relationships, given the failure with Happy Home & Living.
Belief that the ―additional cost‖ will be pushed onto other customers.
HomeHelp
Supply Chain Logistics Management, 6th Edition Bowersox
CASE 01- 13 Solutions
End of Book Questions Solution Set
SCLM 5th Edition End of Chapter Questions and Answers
CASE 1
Integrated Logistics for SES/BAS
Overview
This case finds Maxwell Stevens, sales representative for Specialty Engineering Services (SES),
in a situation common to today’s competitive sales environment. His company, as a supplier to
major manufacturer Boston Aerospace Group (BAG), is faced with changing times. BAG is in
the midst of a ―changing of the guard‖ as Mr. Steven’s long-time contact, Nathan Benson,
retires. Benson’s successor, Tyler Pinto, brings a new set of supplier expectations to the fore of
BAG’s purchasing strategy. Over the years, the quality of competitors’ products began to match
SES. To keep BAG as a customer, SES must improve its logistical performance to meet rising
expectations.
The case illustrates the ―shrinking service window,‖ a concept describing increasing customer
expectations regarding service levels, that is, higher fill rates and shorter order cycles. In BAG’s
case, a change in leadership is responsible for the new, higher expectations. The change,
however, is indicative of the realization that logistics has become a strategic weapon.
SES must either match competitors’ service or face losing a major customer.
Answers
1. See diagram.
Stages adding value: SES packaging
Inbound transportation from suppliers Manufacturing
, Product delivery Matching orders to paperwork
Stages not adding value: Materials receiving
―Dwell time‖ at remote warehouse Materials inventory
2. Minimum performance cycle time: 10 days
Because SES normally maintains a seven-day supply of each compound, the minimum
performance cycle would include time for manufacturing, warehouse shipping
preparation, and delivery. Production is completed within 6 to 8 days; warehouse
operations take 3 to 6 days; and a customer within 200 miles may be served by SES
trucks on a twice-per-week delivery route. Thus, minimum performance cycle time
would be 10 days, assuming delivery is scheduled.
Maximum performance cycle time: 29 days
The maximum performance cycle (worst case scenario) may require SES to wait on an
order for more compounds from a primary supplier. Assuming maximum delivery time of
up to 9 days for a polymer compound, 8 days to complete production, 6 days spent at the
warehouse, and up to 6 days delivery on a common carrier, the maximum performance
cycle time could be 29 days.
3. Yes, it appears that the performance cycle can be improved through the use of 25 percent
and 15 percent suppliers. For example, Company 3 offers both a shorter delivery time and
a higher fill rate than Company 1 for both A and B. Company 2 offers both a shorter
delivery time and a higher fill rate than Company 4 for both C and D. Using more reliable
suppliers may result in higher prices on materials, but this can be mitigated by reducing
SES’s material inventories. Greater certainty on the part of suppliers reduces the need to
maintain high stocks of inventory.
4. Answers may vary. Operations time in both manufacturing and warehouse are long and
variable. Because the manufacture of polymer feedstock has become highly standardized,
SES should look for methods and technologies that can reduce production time.
Streamlining steps at the warehouse that do not add value is another option. Upfront
investment in operations improvements and resistance to change are key challenges to
consider.
5. Answers may vary. Tyler Pinto clearly views polymer feedstock to be a commodity item,
so product quality, competitive price, and shorter, reliable lead times can only be a
―qualifying criterion.‖ Selling to BAG on the next bid will require showing that SES can
offer at least these features, plus a value-added service that can serve as an ―order-
winning criterion.‖ For example, SES could offer unique information-sharing capability,
vendor-managed inventory service, special shipping arrangements, and so on. (See
Chapter 4.) Over time, customers will continue to want even shorter lead times and up to
a 100 percent fill rate. Companies like BAG will look for new ways to improve what they
offer to their customers, so they will need companies like SES to offer more value-adding
services, as well. In this way, supply chain management requires ongoing communication
and coordination as industries and markets evolve.
, Company 1
60% of A 15% of E
60% of B 15% of F
Company 2
25% of A 15% of C SES Truck
25% of B 15% of D
Company 3
15% of A 25% of E
15% of B 25% of F
Materials
SES Remote
Inventory Manufacturing
Warehouse
BAG
Company 4 Receiving
(1 week)
60% of C
60% of D
Company 5
60% of E
60% of F
Company 6
25% of C
25% of D
, CASE 2
Woodmere Products
Overview
From Woodmere’s perspective, the HomeHelp partnership offers substantial rewards, but at a
price. This case demonstrates the all-encompassing change that is sometimes required for a firm
to maintain long-term competitive success. Change is very difficult to achieve in organizations
large and small. Laborers, managers, and executives alike establish ―comfort zones‖ that are
difficult to break. The Case follows John Smith as he first studies the potential benefits of
refocusing production and logistics strategies before promoting the idea to top management.
Answers
6. Answers may vary.
Woodmere faces an ultimatum: either implement a time-based service strategy or lose the
HomeHelp business. Implementing the time-based strategy would require new
approaches to production and logistical operations, as well as significant investments in
technology. The changes are likely to affect the way Woodmere conducts business with
other customers and channel participants (i.e., suppliers and transportation providers).
HomeHelp issued the ultimatum to Woodmere Products. If Woodmere turns down the
opportunity, HomeHelp will have to look elsewhere for products and services.
Both firms stand to gain a potential competitive advantage by being the first in their
respective industries to adopt time-based logistics practices. Ideally, alliances should
create synergy, by which both firms succeed at levels unachievable when on their own.
Successful implementation will require significant investment from each firm.
7. Woodmere Products
Benefits
Exclusive relationship with HomeHelp, ensuring generous future revenues.
Competitive advantage that can carry over into other business.
Replaces inventory with information, which improves customer service and lowers
the cost.
Barriers
Significant investment.
Unfamiliar strategy.
Time-based logistics is new to the industry, so Woodmere would face the challenge
of figuring out how to implement the strategy effectively. Implementation would
likely require extensive trial-and-error efforts and investment.
Fear of relying on close relationships, given the failure with Happy Home & Living.
Belief that the ―additional cost‖ will be pushed onto other customers.
HomeHelp
