REFLECTION 2: THE BUSINESS DIMENSIÓN OF SCM
As I mentioned above although we decided the strategy early on, in the first two rounds of the
simulation each of us tried to find out individually how to understand and process the data
available and with what kind of decision we could contribute to the team strategy. We chose
low cost strategy at the start and each of us felt that we could and must do something in order
to increase ROI along decreasing cost as much as possible.
Our sales head tried to lower the expectations of our customer by slightly decreasing service
level agreements. On purchase side the agreed delivery reliability of our suppliers was
decreased in order to get better contract index, meanwhile the head of supply chain
management drastically decreased safety stock and lot size, while I tried to cut back the
capacity on operation and warehousing. I don’t have to say, it was a total disaster and a great
shock, we did not have enough raw material since our suppliers were unreliable, we couldn’t
produce enough products in lack of components, therefore we could not deliver to our
customers, which resulted a great sum (almost 600k) of penalty and -12.18% of ROI.
I was angry because although we sat next to each other – which is not usual in real world –
some of us did not talk at all. We shared everything from sales and operational side, but
