Test LOG

Name: Farah Qistina Binti Mohd Fadil
Class: DBS3D
No id: BDB2107-075

Essay Question

1. A) Facility location decisions = have a long-term impact on supply chain
performance because shutting down or moving a facility is costly. Designers of
supply chain networks must factor in the reality that manufacturers may remain in
the same location for a decade or longer. However, warehouses or storage facilities,
particularly those not owned by the corporation, can be relocated within a year of
the choice being made. A proper location choice can aid a supply chain's
responsiveness while lowering expenses.

B) The allocation of capacity to facilities = capacity decisions are more easily
changed than location decisions, they do tend to stay in place for several years. Too
much capacity allocated to an area leads to low utilisation and, as a result, greater
expenses. If demand is not met, allocating too little capacity results in poor response
or excessive costs if need is met at a distant facility.

2. The skills and characteristics that set a company apart from its competitors are
known as competitive factors. When designing supply chain networks, companies
must consider their competitors' strategy, size, and location. One of the most
important decisions businesses make is whether to position their operations near or
far from competition. This decision is influenced by the type of competition and
considerations such as raw material and labour availability. positive externalities
between firms Positive externalities occur when the collocation of multiple firms
benefits all of them. Positive externalities lead to competitors locating close to each
other. For example of positive externality occurs, when the presence of a
competition causes a developing area to construct appropriate infrastructure. Suzuki
was the first foreign automaker to establish a production facility in India. The
corporation put in a lot of effort to establish a local supplier network. Suzuki's
competitors have developed assembly plants in India because they now find it more
cost-effective to build automobiles there rather than import them due to the
country's well-established supplier base.

Taxes, tariffs, exchange rates, and transportation expenses are examples of
macroeconomic issues that are external to a company. Macroeconomic variables
have had a considerable impact on the success or failure of supply chain networks as
global trade has grown. As a result, when making network design decisions,
companies must consider these factors. Tax incentive and Tariffs are any fees or

taxes that must be paid when goods or equipment are transported across
international, state, or city borders. Tariffs have a significant impact on supply chain
location decisions. Companies either do not serve the local market or build up
production operations within the country to avoid paying excessive tariffs. Tax
incentives are reductions in tariffs or taxes offered by governments, states, and
localities to attract businesses to locate their operations in specified locations. Many
governments offer different incentives in different cities to promote investment in
areas with lesser economic development. Many plants use such incentives as a
deciding element in their final placement. BMW, for example, chose Spartanburg,
South Carolina as the location for its U.S. production due to the state's tax
incentives.

3. Phase I: Define a Supply Chain Strategy/Design =

The initial part of network design is to determine a company's overall supply chain
design. This includes establishing the supply chain's stages and whether each
function will be conducted in-house or outsourced. Phase I begins with a clear
definition of the company's competitive strategy, which is defined as the collection
of consumer needs that the supply chain attempts to meet. The supply chain
strategy then outlines the capabilities that the supply chain network must possess in
order to support the competitive strategy.

Phase II: Define the Regional Facility Configuration =

The second phase of network design aims to identify regions where facilities will be
located, as well as their possible functions and capacity. A Phase I analysis begins
with a demand projection by country or region. A forecast like this must involve a
measurement of demand magnitude as well as a determination of customer
requirements uniformity or variability across regions. Large, consolidated facilities
are preferred by homogeneous requirements, whereas requirements that differ
across countries favour flexible facilities or smaller, localised, dedicated facilities.

Phase III: Select a Set of Desirable Potential Sites =

The third stage is goal to identify a collection of desirable potential sites within each
region where facilities will be built. The vast geographic area where possible sites
may be located is first identified using models that minimise total expenses.
Following that, potential sites should be chosen based on infrastructure availability
to support the specified production techniques. Soft infrastructure requirements
include the availability of a skilled workforce, workforce turnover, and community

receptivity to business and industry. Hard infrastructure requirements include the
availability of suppliers, transportation services, communication, utilities, and
warehousing facilities.
Phase IV: Location Choices and Market Allocation =
The fourth is goal to choose a precise location and capacity allotment for each
facility from among the prospective sites. A more detailed calculation of location-
specific demand, fixed and variable logistics and facility costs, as well as tariffs and
tax incentives, is available given the probable sites. This data is utilised to create a
network that maximises total revenues while taking non-quantifiable aspects into
account.

As a result, a comparison of the recognised types of network structures in the
furniture sector is established from the perspective of their interdependencies
among actors, resources, and activities. The main contribution is a to divide the two
main types of network structures more formal structures with limited membership
fully observable from the outside, such as industry clusters and purchasing groups,
and those that are not fully observable from the outside and are analysed from the
perspective of the focal actor and, as a result, to identify and analyse various
network structures in the Polish furniture industry.

Case Study

1. A) Low oil recovery from oilseeds: This is a situation when the kernel oil crushed
from its seeds is extremely low

B) Shooting effect and uncomely decline in the efficiency of the expeller:
shooting effect is a technical term used to explain the abnormal noise in an expeller.
This leads to low productivity.

2. A) - Strategic level: strategic structure and configuration of the supply chain

- Tactical level: transportation and production policy, inventory management

- Operational level: operational policies and processes of local sites

B) Infrastructure factors : Infrastructure includes the farms, markets, and businesses

that support the farms within a given area. For example, in a region that grows corn and field
crops, the infrastructure would include the farm and farm family, their employees, the equipment
dealers, and the grain elevators to name a few.

C) Total logistic cost : based on article, total logistics costs include all costs
connected with logistics, such as transportation and warehousing, as well as inventory
management, administration, and order processing. The costs of administration and order
processing are proportional to the overall volume handled.

3. Impact of changes to the firm is when change is good, the organization's efficiency
and productivity increase, making it easier to meet the organization's goals and
mission. Morale has improved for both individuals and groups, and there is a general
sense of togetherness and well-being.

We discovered that having a good level of buffer inventories on hand at all times, rather
than trying to alleviate issues we couldn't feasibly foresee after they've developed, is the
most effective method to protect against supply chain delays having a knock-on effect on
our business. This demanded the growth of our warehousing capacity, as well as the change
of our stock rotation and warehousing procedures, as well as the accompanying
expenditures.

However, the elasticity and leeway this has given us in terms of our ability to avoid being
negatively impacted by supply chain delays of any kind and the breathing room it has given
us if we need to make other arrangements as a results has saved us far more time and
money in the long run than it cost us initially.