Forecasting

The Supply Chain Management simulation was a very challenging but valuable learning experience. The use of this simulation definitely helped us to understand the complexity of managing a business, especially its Supply Chain’s value chain. We had to take responsibility of our own business and make important decisions regarding forecasting, procurement, manufacturing, distribution,transportation, generate demand and more. After each month, we received feedback and had the opportunity to make changes in order to improve our results. Management simulations support learning in a non-threatening but competitive environment of the kind that real managers face every day. This well-designed simulation provided students a realistic education and training experience that will help them to becomebetter managers in the future when they are in the actual work force.
However, since this simulation was a new project for most of the students, there was also a lot of misunderstanding involved. Many students, including myself, had difficulty analyzing all the aspects of their company and figuring out what decisions would be the best to take in order to achieve improvement and success. In thefollowing paper, I will discuss how the key management concepts discussed in two business articles (the “Five Mistakes that Cripple Profitability” and “Supply Chain Optimization”), which address real problems in today’s business world, could be applied to our decision making process in the simulation.
Transportation carries and freight costs
An efficient and effective transportation managementstrategy is a key determinant for a business success. In “Five Mistakes that Cripple Profitability” article, PDF PLS_OG_Whitepaper discusses the logistical challenges and transportation alterations that oil and gas companies will have to make after the increase of the gas extraction projects and fuel costs, and the shrink of transportation carries. Although they are discussing freighttransportation in the Oil and Gas industry, the principles can be applies to the simulation. These principles are related to evaluating your transportation strategy, making smart decisions that reduce your current freight spending, and avoiding common mistakes such as: relying exclusively on established relationships with asset-based, focusing only on motor carriers, making freight decisions in the field, notshopping freight rates, limited use of transportation management systems. For example, oil and gas industry suppliers ten to lean heavily on the same set of core carriers. We might tend to make this mistake in the simulation as well. Even though, having a trusty and well-established relationship with one particular carrier is important for businesses, this strategy may affect negatively theshipping capacity needed and customer demand satisfaction. Just like the oil and gas suppliers have to choose carriers for their transportation decisions, we also had to choose carriers from our different options such as carrier I, J, K, L, M or N. The particular carrier(s) we picked had the responsibility to ship our products from our DC1 to region 2 and region 3. All of these carriers presenteddifferent conditions regarding to costs and delivery performance. It was the students’ job to choose the carrier(s) that we believed were the finest to perform this important delivery task for our companies. Many students picked exclusively and only one carrier to perform the shipments to DC2 and DC3, and that was their mistake. Like this article says, the industry growth pulls your company into newgeographic regions, and having only one carrier to perform this task is not the best decision. Instead, it is recommended to expand your options and partner with at least two or more carriers in order to achieve a better delivery performance, lower freight costs and satisfy your customer.
This principle could be very useful and applied for any company, including ours in the simulation. In fact,...