Operations and Supply Chain: Competitive Advantage, Best Practices, and Balanced Scorecard

This document discusses the competitive advantage of Zentrill and Zara, best practices in the fashion industry supply chain, and the balanced scorecard approach for Fitness Pro Gym. It also includes a discussion on improving the bullwhip effect in the beer game.

Running head: QUESTIONS AND ANSWERS 1
Operations and Supply Chain
Name
Institution

QUESTIONS AND ANSWERS 2
Task 1
a). Competitive advantage for both firms
Zentrill competitive advantage
The source of competitive advantage for Zentrill Company is its market segmentation and
target market. The firm clearly identified and targeted customers in high street locations and
shopping malls in California and other Southern States. Focusing on women’s apparel offers the
company a competitive advantage to have a larger market share in women’s segment. Another
competitive advantage that Zentrill has is higher profit margins. This is attested by the fact that
the company would sell a coat for $1,000 after incurring production cost of about $200. This
offers the company an opportunity to maximize returns and profitability position of the company.
Furthermore, the company sells exclusive and stylish designs that give the company and added
advantage over others in terms of reduced competition through the exclusive and stylish strategy.
Since all products sold by Zentrill are manufactured by Lopez Industries it offers the
company an added advantage to streamline its supply chain process as a result of single supplier.
Besides, the two seasons in the northern hemisphere offers the company an added advantage to
maximize returns on products sold during these times. Moreover, the company has added
advantage because it supplier also relies on a single supplier which makes it favorable to
influence policy that will improve their supply chain.
Zara
Competitive advantage with respect to Zara arises from having more stores across the
world compared to Zentrill which is located in the United States. Zara has had significant growth
over the years which has enabled it to increase its market position compared to other competitors

QUESTIONS AND ANSWERS 3
who have had minimal growth (Kasra, Michael and Lewis, 2014). Another competitive
advantage is that the company has an agile supply chain network that which is centered on its
philosophy to control every aspect of the business to ensure the customer is satisfied. Zara enjoys
an elaborate distribution network which helps it to plan, manufacture and distribute new products
within a record time of 15 days across the world.
Similarly, the company has a higher number of sales compared to other players in the
market. Nonetheless, the company handles design, warehousing, distribution and logistics
function which helps it to closely monitor its supply chain process. Zara is competitive in the
retail industry as a result of channeling information quickly across its supply chain. As well, the
company strives as a much as possible to synchronize its supply chain process better compared
to others. Also, Zara leverages on capital assets to increase investments in production and
distribution facilities.
b). Zara business model application
Zara’s business Model can be applied to Zentrill context. This is because Zara’s supply
chain process is more agile compared to Zentill. Zara is capable of designing, manufacturing and
distributing products within a short time and deliver in its stores across the world. This implies
that the company is capable of meeting demands of customers who find limited products in their
nearby stores.
Another beneficial aspects that can allow mimicking of Zara’s model to Zentrill
Company is having a warm relationship between the business and its suppliers. Effective
collaboration contributes increasing efficiency and improving productivity in the supply chain
process.

QUESTIONS AND ANSWERS 4
c). Best practices
Fashion industry supply chain best practices
Developing a supply chain council
There is a specific classification of leaders required in almost every firm. Without these
leaders the supply chain is likely to have challenges in its strategy to increase efficiency and
functionality (Khurana & Ricchetti 2016). This requires a business to identify a team that will be
involved in addressing supply chain issues. Having a reliable force will assist an organization to
improve its communication and add value to the supply chain network.
Appropriate personnel
Staff members need to be trained and equipped with skills in all aspects of the
distribution for purposes of ensuring that the distribution network is operating smoothly. The
staff need to have a clear picture of the overall process (Marshall et al, 2016). Developing the
skills of the staff contributes in assisting a business to be more productive as well as minimizing
risk.
Technology adoption
Majority of businesses experience problems associated to the implementation of an
effective distribution technology. Consequently, business require to be proactive is minimizing
risks to identify potential areas that technology can be applied to increase efficiency. It is
significant to evaluate areas that require technology rather than implementing a technology with
the expectation of increasing performance (Da Giau et al, 2016). Technology used in the right

QUESTIONS AND ANSWERS 5
areas will assist in providing accurate reporting data and informs the stakeholders of need for
improvement.
Maintaining healthy supplier relationship
In order for fashion retail industry to succeed, businesses have to develop good working
relationship with their suppliers (Macchion et al, 2017). Essentially, it would imply forming a
business alliance where the goal is to offer customers reliable products and services. Among
characteristics of a successful relationship is two-way communication, shared objectives, value,
measure of performance and rely on leaders to resolve conflicts.
Collaborate in sourcing
Successful supply chain process relies on the ability to ensure more suppliers collaborate
in the decision making process (Dubey et al 2017). This is significant because suppliers may
have information on how markets are performing which can be significant in planning for future
goals and strategies. Strategic sourcing plays a vital part in the distribution network because it
streamlines activities, reduces costs and enhance responsiveness.
Focus on cost of ownership
Most businesses tend to focus on price rather than the total cost of ownership when
selecting suppliers. This implies that businesses should be able to prioritize value and
sustainability rather than factors affecting price in supply chain process.
Contract management should be under supply chain processes.
Contracts in the retail industry play a crucial role. However, majority of companies never
focus on these contracts once the negotiations are completed. Integrating contract management

QUESTIONS AND ANSWERS 6
as part of the supply chain process will ensure that these contracts are collected and stored in a
central location where they can be easily accessed for review.
Optimizing the inventory
Inventory provides a business with insight on distribution network. Effectively managing
the distribution network contributes to improving effectiveness of the distribution process. This
requires collaborations with suppliers in order to address demand planning and forecasting
strategies with respect to the inventory.
Regular monitoring
Stakeholders in the industry should be able to meet on a regular basis for purposes of
reviewing procedures and policies that ensure compliance. Therefore, minimizing risks in the
supply chain process will streamline operations and reduce theft and fraud.
Developing green initiatives and social responsibilities
In order for businesses to survive in the rapid changing environment. They are expected
to be aware of carbon footprint in the supply chain as well as environmental impact of suppliers
(Chan, Ngai, & Moon, 2017). This role is tied to social responsibility which influences
consumers purchasing patterns. Therefore, policies and procedures need to be aligned with goals
to enhance relationship between the business and the community.
Task 2
Improving bullwhip effect
The beer game assumes that there is one player involved in the stages of the distribution
network process. It implies that a factory manufacturing beer will order resources and supply

QUESTIONS AND ANSWERS 7
beer to the distributor who has placed an order with the factory. Further, the wholesaler makes an
order which is fulfilled by the distributor (University, 2012). Lastly, the retailer also orders the
products from the wholesaler who delivers the needed beer.
This traditional structure of supply chain process is one of the principles that are used in
the beer game along with network and operating process. In this regard, network relates to one
participant at each stage while operating process reflects ordering beer, managing inventory and
shipping beer. The beer game context provided in video comprises two categories which include
the demand forecast and performance goal (Hofmann, 2017).
Under demand focus, it is mid-May, in Michigan and temperatures are on the rise, beer is
seasonal and demand rises when summer and holidays, the demand has remained steady at 4
pallets per week and sales are expected to rise with increase in temperature, memorial weekend
and after sales promotions. Under performance, pricing is market driven so maximizing profits
depend on minimizing cost, $1 inventory holding cost per pallet per week and $2 backorder cost
per pallet per week.
The objective of the game is to manage the inventory so as to reduce the total cost of the
distribution network. In the game, the distributors are expected to order the beer according to a
number of factors such as demand for the beer in the supply chain with respect to inventory cost.
The participants try to minimize the inventory cost by gaming the system and optimizing the
system (Blass & Corbett, 2018). The game suggests that a step change is required in order to
disrupt the dynamics of the system. Moreover, this is a strategic calculation that is normally done
in order to minimize the cost and maximize returns (Zhao et al, 2018).

QUESTIONS AND ANSWERS 8
The Bullwhip effect refers to acting on something with limited insight which results in
stock outs and overstocking. Therefore, in order to improve the bullwhip effect, the distribution
network needs to collaborate with customers and suppliers (Seles et al, 2016. Collaboration helps
companies to work with customers in order to understand their plans and forecasts. In this
regard, there are supply chain software that have functionalities that allow collaboration such as
supplier portals, EDI transactions and event alerts (Stadtler, 2015).
As well, improving forecast accuracy contributes in improving the bullwhip effect. Most
companies need to plan for items and demand from customers. Steps to increase accuracy
involves using the right algorithm to forecasts demand with respect to input from sales and
customers. Moreover, enabling faster decision making process and visibility contributes to
minimizing the bullwhip effect. This implies that without any degree of insight, supply chain
stakeholders tend to rely on rule of thumb or unsubstantiated claims (Wang & Disney, 2016). In
addition, a business is needed to implement to a demand driven distribution network
management approach which will play a vital role in reducing overreliance on limited
information.
Task 3
a). Balanced Scorecard
Perspective Goals Measures
Financial
perspective
Revenue
Growth
Increase income for
facility
Attract new
customers
Build sustainable
customer base
Increase in number of
revenue and customers
Customers Quality
Retention
Satisfy customers
needs
Build sustainable
customer base
Increase in number of
satisfied customers
Increase in membership
Processes Fitness Increase Number of classes per

QUESTIONS AND ANSWERS 9
Client Services
Equipment Maintenance
participation and
personal trainers
Increase customer
service experience
week
Client hours
Weekly child hours and
increase in operations
and maintenance
Learning
and
Growth
Program development
Facility development
Organizational development
Professional
development
Quality services
and equipment
Improved
leadership qualities
% of new lessons
Number of innovative
suggestions
% of equipment and
modifications
Renovations
Number of directors
Number of full time
managers
Table 1. Balanced scorecard for Weight Club
Figure 1. Trend of BSC strategy
b). Approach
The design of the balanced scorecard was approached by first considering the concept of
the framework. In this respect, the definition of a balanced scorecard was necessary. Therefore,
the balanced scorecard was defined as a productivity measuring tool that is used in strategic
management for purposes of identifying and improving internal functions of the business. The
tool works by providing feedback to organization after collecting and analyzing information for
better decision making process.

QUESTIONS AND ANSWERS 10
Primarily, a balanced scorecard is used for purposes of reinforcing appropriate behavior
in an organization with respect to finances, customers, business processes and learning and
growth. The tool is centered on accomplishing objectives, measurements, initiatives and goals as
a result of the four components (Akkermans & Van Oorschot, 2018). Similarly, this tool helps
companies to identify factors that hinder business performance make necessary changes to
influence future scorecard. The balanced scorecard is able to provide information about a
company from an investor’s position. Organizations tend to use a balanced score card approach
to implement strategies that add value to the organization.
The financial aspect of the scorecard is concerned with sales, expenditure, income and
financial performance of the organization. Customer aspect involves factors that contribute to
customer satisfaction based on the tenants of customer encounter triad. Business activities are
assessed by considering manufacturing process to minimize supply chain challenges. Lastly,
learning and growth involves training and development needs to increase competitive advantage
of a company.
In context of Fitness Pro Gym, the balanced scorecard aimed at determining the factors
that influence Weight Club with respect to the four elements of a balanced scorecard. The paper
determined that dimension of focus with respect to financial perspective is revenue and growth
while that of customers perspective relates to quality and retention (Hansen & Schaltegger,
2016). Business processes dimensions with respect to Fitness Pro Gym included fitness, client
services and equipment maintenance. Learning and growth dimensions involved the
development of programs, facility development and organizational development.
The objective that the company aims to achieve based on the scorecard for Weight Club
is generating revenue and attracting new customers for financial objectives. Customers’

QUESTIONS AND ANSWERS 11
objectives included satisfying customer needs and building sustainable customer base. The
objectives for business process that would be considered include enhancing client experience,
facilitate use of services and maintaining equipment in working conditions. The objectives with
respect to learning and growth perspective included the development of professional staff
members, offering first-class facilities and equipment and developing skills of managers and
administrators.
Lastly, the key performance indicator aimed at measuring percentage increase in revenue,
customers, satisfaction and membership renewal. Other areas to be measured included the
number of exercise classes scheduled in a week, numbers of client hours per week, percentage of
involvement in customer experiences, number of bookings and time needed to check in. In
addition, the percentage of fully operational, new classes and equipment was considered (Keyes,
2016). These are some of the findings that the balance scorecard was able to provide based on
the case study and requirements of weight club.
c). Critical Success factors for BSC
The major difference between a successful balanced scorecard and a poor one is based on
the impact in the long-run. Therefore, a successful balanced scorecard is one that will focus on
the entire team. The team has to be fully aware of the key scorecard concept and learn how to
apply them in a business context (Mehralian et al 2017). This implies that training and
development is crucial in ensuring that stakeholders resonate with the factors influencing their
business to express connection with the four components of a balanced scorecard. Once the tool
is developed, it can have a significant part in the collection, reporting and measuring aspects of
the organization.

QUESTIONS AND ANSWERS 12
A balanced scorecard is an effective strategic tool that puts strategies into actions. This
implies that a business is required to have a strategy before it can develop a balanced scorecard.
Therefore, a balanced scorecard is structured in order to evaluate the current strategy and modify
it to suit the objectives of a company.
Essentially, the value of a balanced scorecard is pegged on the engagement of the team.
The engagement requires staff members to facilitate the process and challenge the current
principles with an aim to have a better understanding of the business and gain insight on
important aspects that need to be managed to realize expected objectives of an organization.
Therefore, both senior management among other stakeholders must come together and
brainstorm for purposes of creating a successful balanced scorecard. Furthermore, a successful
balanced scorecard is one that explicitly define the relationship between the business
performance and the four components of a balanced scorecard (Valmohammadi & Ahmadi,
2015). Besides, each components captures requirements and opportunities for effective strategy
implementation.
Another critical success factor is to ensure that a business is measuring the right things.
This is because the underlying principle of scorecard is to manage aspects that can be measured
in order to be able to improve these areas. As a result, it is significant to ensure that objectives of
the business are clearly stated with respect to the four components for purposes of being able to
understand what needs to be measured.
Since the goal of a balanced scorecard is to influence the behavior, it requires developers
of the tool to focus on executions in a few key areas. These key areas comprise marginal
measures that minimize the influence of the scorecard. Moreover, businesses need to create a
balance between lead and lag measures. In this context, lag measures refers to the past results

QUESTIONS AND ANSWERS 13
while lead measures offers early indicators of future performances. Successful balanced
scorecard aim to use the measures as basis for decision making process (Cooper & Ezzamel,
2016).
Decision making has to be based on informed choices as a result of the balanced
scorecard developed. This is because there is no other way to make decisions without using the
findings of a scorecard. In conclusion, the balanced scorecard may be used as a basis of ongoing
process. Continuous process often allows companies to monitor various stages of business
operations in order to make comparison and decision that are aimed at enhancing performance.
Lastly, a business should consider critical insight into the drivers of a business to increase its
benefits.
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QUESTIONS AND ANSWERS 14
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QUESTIONS AND ANSWERS 15
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QUESTIONS AND ANSWERS 16
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