Supply Chain Analysis: Mergers, BioPharma, Groupon Case Studies

This case study delves into supply chain analytics, differentiating between responsiveness and efficiency. It explores the complexities of balancing these elements within supply chain design and management. The analysis includes case studies of Sleekfon & Sturdyfon merger, examining production facilities, costs, and transportation challenges. The BioPharma case study highlights profit declines, high costs, and surplus capacity, presenting a transportation model to minimize costs. Finally, the Groupon case study discusses the company's business model, subscriber acquisition, and the importance of merchant partnerships. The study references external resources for further exploration of supply chain optimization and related topics.

SUPPLY CHAIN ANALYTICS
Difference between responsiveness & Efficiency?
Responsiveness !
The process of action with quickly and positively is called responsiveness.
Efficiency!
Efficiency is the ability to avoid wasting stuff, efforts, money, and time is called
efficiency.
Balancing Responsiveness & Efficiency in supply chain!
The responsiveness of supply chains to changing customer needs and their overall
efficiency are major issues in supply chain design and management & currently
receive wide attention in the scientific community as well as in practice.
Responsiveness is like as the “ability to react purposefully and within an
appropriate time-scale to customer demand or changes in the marketplace, to bring
about or maintain competitive advantage.
A supply chain would be considered to be competent if the focus is on cost
reduction and no resources are wasted. Responsiveness and efficiency are directly
and indirectly linked and even involve evaluation. In supply chains, the
interrelationships between major parts of the system are complex. There are
various players in the supply chain, and each of them addresses condition of
demand, production, and supply management, distribution, planning etc.
Each of these conditions also interacts with the others. These interrelationships
form feedback loops that either intensify or cancel out management initiatives in
unintuitive paths. This is the case both when such initiatives are carried out by
individual supply chain players in an un-coordinated fashion as well as when
supply chain members coordinate their initiatives and try to align policies in the
supply chain.

SKEEKFON & STURDYFON!
Is one of the world mega mergers of two biggest cell phone manufacturers and
both market size are in the following countries:
N.AMERICA
S.AMERICA
EUROPE (EU)
EUROPE (NON EU)
JAPAN
ASIA
AUSTRALIA
AFRICA.
Sleekfon has three production facilities in Europe (EU), North America, and South
America. Sturdyfon also has three production facilities in Europe (EU), North
America, and Rest of Asia/Australia. The capacity (in millions of units), annual
fixed cost (in millions of $), and variable production costs ($ per unit) for each
plant.
Transportation costs between regions was very higher.
Duties are applied on each unit based on the fixed cost per unit capacity, variable
cost per unit, and transportation cost. Thus, a unit currently shipped from North
America to Africa has a fixed cost per unit of capacity of $5.00, a variable
production cost of $5.50, and a transportation cost of $2.20. The 25 percent import
duty is thus applied on $12.70 (5.00 + 5.50 + 2.20) to give a total cost on import of
$15.88.
The merged company has estimated that scaling back a 20-million-unit plant to 10
million units saves 30 percent in fixed costs. Variable costs at a scaled-back plant
are unaffected. Shutting a plant down (either 10 million or 20 million units) saves
80 percent in fixed costs. Fixed costs are only partially recovered because of
severance and other costs associated with a shutdown.

BIO PHARMA !
INTRODUCTION!
BioPharma, Inc. is a global company which is dedicated in manufacturing of bulk
chemicals .The BioPharma Inc. holds patents on two chemicals which, are called
Highcal and Relax internally. Her plants produced from six various regions.
Problem ?
BioPharma Inc. has experienced more than one problem and the serious ones are
three:
1. A sharp decline in profits
2. Very high costs at its plants in Germany and Japan
3. It has a surplus capacity in its global production network which overwhelm the
company
The researcher has outlined a transportation model and the mathematical model
thereof that can be applied to minimize transportation total cost for the BioPharma
Company.
The mathematical model is just a linear programming formulated to solve a
transport problem. We have calculated the minimized total transportation cost for
the company and about 12% of the cost can be avoided.
This is a big saving for the company and about UD$ 3.97 million per month will
accumulate in the company’s bank account. The optimal shipment plan provides a
reduction of the company’s burden by 12% by rearranging the network flow.
Likewise, the optimal network flow agrees with the original plan by closing down
the two Relax plants at Germany and Japan. This is mainly to avoid high running
costs of the plants due to their relatively higher cost raw materials.
Further work is needed to establish the reasons why the Solver failed to give a
sensitivity report. Sensitivity report could save a lot of effort for flexibility tests for
closing plants or increasing demands

SAVOR & GROUPON!
Groupon is an online marketplace through which coupons and discounted gift-
certificates for both local and national companies are offered to consumers.
Colloquially known as a “dailydeals” website, Groupon offers one or more deals
per day in each market it serves.
We have made significant investments to acquire subscribers through online
marketing initiatives, such as search engine marketing, display advertisements,
referral programs and affiliate marketing. In addition, our subscriber base has
increased by word-of-mouth. We intend to continue to invest in acquiring
subscribers so long as we believe the economics of our business support such
investments, however we have continued to shift our efforts towards converting
subscribers into customers who purchase Groupons. We do so by providing more
targeted and real-time deals, delivering high quality customer service and
expanding the number and category of deals we offer. We intend to continue
investing in the development of increased relevance of our service as the number
and variety of the deals we offer our subscribers increase and we gain more
information about our subscribers’ interests. Our investment in the growth of our
subscriber base and achieving optimal subscriber levels at any given time will be
directly linked to the breadth and location of our base of merchant partners. As
such, while total subscribers is a key metric to measure our progression over the
long term, it is not a key operational metric in the same manner as is our active
customer base, which we discuss below.
Expand with acquisitions and business development partnerships. Historically, the
core assets we gained from acquisitions were local management teams and small
subscriber and merchant partner bases, to which we then apply our expertise,
resource and brand to scale the business. More recently, our focus has shifted to
acquiring businesses with technology and technology talent that can help us
expand our business.

REFERENCES
http://files.shareholder.com/downloads/AMDAE2NTR/2192449792x0x577460/A1ADF349-
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AIMMS Paragon Decision Technology
http://www.aimms.com/aimms/download/manuals/aimms3om_networkflowmodels.pdf
Bertsekas Network Optimization: Continuous and Discrete Models
https://www.chegg.com/tutors/Business-Math-questions/CASE-STuDy-To-Savor-or-to-
Groupon1-Mr-Chang-the-owner-of-Enter-the-Dragon-a-high-end-Asian-restaurant-in-Chicago-
was-puzzled-by-the-choices-put-before-him-by-the-Groupon-sales-representative-He-could-
offer-a-daily-deal-at-Groupon-a-60-coupon-for-30-that-w--OAV4V/
https://www.demandsolutions.com/industries/pharma-bio/case-studies.html
https://www.academia.edu/8751498/Chapter_5_exercise_answers