6 Jan Obsolescence
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Transcript of 6 Jan Obsolescence
!!BA#244:#Supply#Chain#Management#
Reminders#
! CASE STUDY: Nike
! 20 minutes + 10 minutes ONLY
! Ask questions!
! You will grade the group ! 40% - Content and SCM Analysis ! 30% - Visual Ease and Presentation Flow ! 30% - Interaction with Audience
! Don’t grade your own group
Differences#
Parameter' Q)Model' P)Model'
Order!Volume! Constant! Variable!
When!to!Order! When!we!reach!re6order!point,!R!
A;er!a!fixed!>me,!T!
Stock!Level!Upda>ng! Each!>me!product!is!drawn!from!or!replenished!in!the!inventory!
Only!during!stock!review!at!end!of!T!
Inventory!Size! Less!than!P6Model! Larger!than!Q6Model!
Effort!required! More!than!P6Model!due!to!constant!monitoring!
Less!than!Q6Model!
Category!Type! High!value!and!Cri>cal!Products!
Low!value,!rou>ne,!and!non6cri>cal!products!
Modified#P@Model:#Optional#Replenishment#System##
! Check!inventory!a;er!every!fixed!period,!T!
! Order!is!placed!only!if!the!level!is!below!a!set!amount!
Modified#P@Model:#One#Bin#System#
Modified#Q@Model:#Two#Bin#System#
!!
Other#Techniques#
Technique' Solu6on'Approach' Characteris6cs'Linear!Programming! Op>mizing! Computerized;!linear!
assump>ons!not!always!valid!
Spreadsheet! Heuris>c!(trial!and!error)!
Intui>vely!appealing,!easy!to!understand;!solu>on!not!necessarily!op>mal!
Simula>on! Heuris>c!(trial!and!error)!
Computerized!models!can!be!examined!under!a!variety!of!condi>ons!
Spreadsheet#&#Simulation#Models#
! Computerized!models!that!can!be!tested!under!different!scenarios!to!iden>fy!acceptable!(although!not!always!op>mal)!solu>ons!to!problems!
! In!majority!of!organiza>ons,!planning!is!done!on!the!basis!of!experience!along!with!trial6and6error!methods.!Why?'
Why?#
! Level!of!mathema>cal!sophis>ca>on!discourages!greater!use!
! Assump>ons!required!in!certain!models!appear!unrealis>c!
! Models!may!be!too!narrow!in!scope!
Spreadsheet#&#Simulation#Models#
Spreadsheet#&#Simulation#Models#
Spreadsheet#&#Simulation#Models#
Obsolescence#
! as!a!process!whereby!goods!or!services!no!longer!meet!the!needs!of!the!current!user!
! Four!main!types:!! Technical!or!func>onal!obsolescence!! Planned!obsolescence!! Style!obsolescence!! Postponed!Obsolescence!
Technical#Obsolescence#
! New!or!more!func>onal!product!or!technology!superseding!the!old!!
! A!product!targeted!for!technical!obsolescence!will!typically!cost!more!to!repair!than!to!replace!
! Product!or!service!may!even!be!withdrawn!from!service!
! e.g.!Microso;!withdrawing!its!service!support!for!Windows!95!opera>ng!systems!in!2002!
! e.g.!video!casse^es!to!digital!versa>le!disks!(DVDs)!
Planned#Obsolescence#
! Deliberate!introduc>on!of!obsolescence!into!the!marke>ng!strategy.!Why?!
! Results!in!the!consumer!reducing!the!period!between!purchases,!and!thereby!genera>ng!sales!for!the!organiza>on!
! Incongruent!with!CSR!–!waste!of!resources!and!exploits!customers!
! Necessary!enabler!of!innova>on!and!economic!growth!
! e.g.!Japanese!electronics!manufacturer!Toshiba!and!Sony!are!in!discussions!over!the!format!of!the!next!change!in!technology!from!DVDs!to!Hi!Defini>on!(HD)!DVDs!
Brazilian#lawsuit#accuses#Apple#of#‘planned#obsolescence’#with#fourth@gen#iPad#(2013)#
! 66month!difference!
! “Apple!could!have,!when!launching!iPad3,!implemented!all!of!the!technological!upgrades!introduced!in!iPad4”!
! “Consumers!thought!they!were!buying!high6end!equipment,!not!knowing!it!was!already!an!obsolete!version”!
Style#Obsolescence#
! refers!to!a!change!in!style!that!results!in!a!product!no!longer!being!required!as!a!result!of!market!changes!
! Examples?!
! e.g.!automo>ve!industry!with!styling!on!motor!vehicles!being!implemented!annually!
! e.g.!clothing!industries!with!clothing!fashions!changing!seasonally!
Postponed#Obsolescence#
! Where!technological!improvements!are!not!introduced!even!though!they!could!be!
! e.g.!car!manufacturer!develops!a!new!feature!for!its!car!but!does!not!include!the!feature!in!the!cheaper!version!of!the!car!
! e.g.!base!model!Camry!does!not!have!electric!windows!or!seats!but!the!capability!is!there!
Drivers#of#Obsolescence#
! The!product!life!cycle!
! Changes!in!the!market!
! The!effect!of!compe>>on!
! The!business!risks!of!inaccurate!forecas>ng!
! Changes!in!produc>on!methods!
! Legisla>ve!and!Poli>cal!Environment!
Legislative#and#Political#Environment#
! Chlorofluorocarbon!(CFC)!/!Freon!! In!refrigera>on,!air6
condi>oning,!and!aerosol!cans!
! 1987!! In!response!to!a!drama>c!
seasonal!deple>on!of!the!ozone!layer!over!Antarc>ca!
! Montreal!Protocol,!which!called!for!dras>c!reduc>ons!in!the!produc>on!of!CFCs!
!!End#