Chip Shortage Puts the Brakes on Automakers

Chip Shortage Puts the Brakes on Automakers

Deliveries of full-size pickups and SUVs are delayed because of a global chip shortage caused by temporary plant closures amid the pandemic.

This shortage, coupled with port closures that prevented shipments of auto parts from unloading, has further limited truck and SUV production at General Motors and Ford.


Video Spotlight: 


This post is based on the CNN article, Computer chip shortage starting to hit automakers where it hurts, by Chris Isidore, March 22, 2021, and the YouTube video in the Spotlight. Image source: Pavel Kirichenko/Shutterstock

Discussion Questions:

1. How did the chip shortage and auto parts delay affect MRP at General Motors and Ford?

Guidance: Chips and auto parts are essential dependent-demand components in vehicle production at General Motors and Ford.  Supply disruptions of dependent-demand components affect the accuracy of master production schedules, bills of materials, and inventory data because the assumption of constant lead times no longer holds.

2.  How did General Motors and Ford respond to the chip shortage and auto parts delay?

Guidance: General Motors and Ford used their chips on hand to keep Continue reading

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Do Detailed Contracts Make for Better Supplier Relationships?

Do Detailed Contracts Make for Better Supplier Relationships?

February 15, 2021

Building a strong relationship with suppliers is important, but in the event of questions or disagreements, we rely on the contract. Any supply chain contract should include these 5 key areas:

1) Protection of confidential information and defining ownership of intellectual property

2) Detailing quality and materials requirements

3) Protection of your intellectual property from counterfeits

4) Promotion of contractual performance

5) How to terminate the contract


Video Spotlight: 


This post is based on the Supply Chain Brain article, Five Key Provisions You Should Have in Your Supply-Chain Contracts, by Hannah Genton, January 10, 2021, and the YouTube videos in the Spotlight. Image source: in-future/iStock/Getty Images

Discussion Questions:

1.  Does a detailed contract, with strong performance standards for the supplier, help or hurt the long-term relationship between supplier and buyer?

Guidance: Students are likely to think an overly specified and stringent contract sets the tone for a negative relationship, as they often have not yet developed the ability to differentiate between Continue reading

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Forecasting Halloween During a Pandemic

Forecasting Halloween During a Pandemic

September 20, 2020

Tricky forecasting leaves chocolate companies wondering how candy sales will fare this Halloween.

Mars’ time horizon for planning for the Halloween season spans two years, yet no one could have known how different things would be this year because the pandemic.  For Hershey, Halloween spending comprises ten percent of annual sales.

No one is sure right now if “self-consumption,” when people buy Halloween candy to eat themselves rather than to distribute to others, will be enough to fill the gap of sales lost from trick-or-treating.


Video Spotlight: 


This post is based on the Fortune article reposted to Yahoo Finance, How scary will a COVID-19 Halloween be for candy companies?, by Beth Kowitt, August 29, 2020, and the YouTube video in the Spotlight. Image source: Shutterstock / Sandy Morelli

Discussion Questions:

1.   What role does aggregate planning play in the current availability of candy for Halloween of 2020?

Guidance: Many companies have a long planning horizon.  In part this may be to ensure adequate supplies of materials and resources when it comes time to manufacture product to meet demand. In addition, manufacturers need to Continue reading

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