Newcastle Business School: Supply Chain Simulation Analysis

This report is a reflective analysis of a Global Supply Chain Management Simulation, detailing the student's experience over four years of operation. The student, acting as a supply chain manager for mobile phone manufacturing, discusses decisions related to product add-ons, demand forecasting, and supplier selection. The report highlights successes, such as achieving a 28.97% margin in the final year, and challenges, particularly the mismanaged inventory in year two. The student reflects on the importance of forecasting, supplier management, team consensus, and board reviews. The simulation provided valuable insights into the practical application of supply chain management principles, emphasizing the impact of product features on demand and the critical role of supplier relationships. The student concludes by advocating for simulations as effective learning tools for aspiring professionals.

Task 1 – Supply Chain Simulation Reflective Report
The Global Supply Chain Management Simulation was a roller coaster ride and I
enjoyed my 4 years of operation to simulative business. I was thrilled to be the supply
chain manager for the manufacturing of the mobile phone at such large scale and handle
all aspects of the supply chain starting from choosing the right product add-on for the
mobiles, forecasting the demand and aligning the suppliers to ensure we never run out
of stock or end with too huge a inventory.
At the onset of the year, I started with understanding the business model and my team
members and based on consensus of the team and projected growth of net profit margin
for $5,000, upgraded the offering to improve the communication and make it look more
stylish as in the modern world that we live in today, people look for smarter options. I
forecasted the demand based on the average and estimated sales above the average
number given that I have enhanced the features of the mobile phones thus making it
more desirable. For suppliers I chose suppliers in two categories including far far away
and also those who are pretty close to keep costs, lead time, and inventory costs in
control. At the end of year 1, I made a gross margin of 26.60%.
The good practices in the trade that I learnt the hard way was in year 2, where for
Model A, I constantly faced a stock out situation and whereas for Model B, ended up
with an inventory cost of $2.9 million. The loss of sales against Model A and huge
inventory costs under Model B, reduced my gross margin to 15.13% in year 2. It was
during the review meeting with the Board, that I understood the Board’s view on
modifying the purchase order after benefit analysis.
Year 3 was a great start, where I added the features of durability and high audio quality
to the product range and forecasted above average sales for the products. The suppliers
chosen this time were ones very close as compared to pretty close. I did not modify the
purchase order given the fact that the penalty cost of $2 million was higher than the
stock out and inventory costs combined. I ended the year with a gross margin of
24.05% registering a growth of nearly 60% from the margin of 15.13% in year 2.
For the final year, I made my products super slim to make them more impressive and
handy and updated features made me a margin of 28.97% (highest in all the 4 years).
Cumulatively, I was able to make a margin of 24.11% with a total revenue generation
of $704 million.

At on overall level, I am happy with the decisions that I made in the game apart from
the falter in year 2, where my inventory levels were highly mismanaged with Model
A reaching a stock out level and Model B with the highest unsold inventory. This
game was as exciting as challenging where I learnt various aspects of supply chain
and how each one of them must correspond to each other to align the chain perfectly.
The course module has been specifically helpful for me while forecasting the demand
for the product in the “Forecasting room”. I applied the logic of predicting an above
average sales for both the models given the fact that I was adding on features to them
in terms of upgraded communication, better audio, stylish, super slim and highly
durable. All of these positive incorporations work in direct proportion to the demand
of the product. And this is what exactly happened in the game where my actual
demand of the product was often better than the projected demand.
The second aspect of the learning was how managing the supplier is most important
for any supply chain. I wanted to host the conference for the suppliers, but the tight
budget and no nod from the board members restrained me from doing that.
The lessons learnt from the simulative environment are important as we get a chance
to apply the skills and see the results immediately. They also offer chance for
correction, which is obviously very costly in the real world. Simulations in my
opinion are one of the best tools to foster learning and growth for aspiring
professionals. My experience with the Global Supply Chain Management simulations
has made be better equipped with how forecasted demand varies with every feature
that we add-on to the product offering, how consensus among the team members
matter in every decision we take, how suppliers are managed with upfront purchase
orders to predict supplies and how a review with board members is quintessential.
The review matrix in the simulation was something I look forward the most as it is in
the board meeting that I got to know my performance and how other departments are
getting affected by the management of the supply chain in the organization.