Question 1
Chapter 12: Read the case â€œSupply Chain Design in Crayolaâ€ on page 520 of the textbook. Review the strategic implications of supply chains as described in the text. Does Crayola have efficient or responsive supply chains, or both? Explain your position (about 200-400 words).

Crayola, LLC is a profitable, wholly owned subsidiary of Hallmark Cards of Kansas City, Missouri. The companyâ€™s world headquarters are located in Easton, Pennsylvania, and house marketing, sales, operations and manufacturing, finance, R&D, Internet services, customer care consumer affairs, and corporate communications. Sales offices in Easton, Bentonville (Arkansas), and Minneapolis manage domestic accounts, while offices in Canada, Mexico, France, Italy, Japan, and Hong Kong handle international business. The Global Operations Division in Easton is responsible for the sourcing, quality, manufacturing, and logistics of Crayola products worldwide.

Two thirds of what Crayola sells globally is produced in its three Pennsylvania facilities in the Lehigh Valley. The â€œForks Iâ€ plant is devoted to manufacturing crayons and markers, the â€œForks IIâ€ plant handles plastic molding, and the Lehigh Valley Industrial Park (LVIP) plant creates paints, modeling compounds, activity kits, and Silly PuttyÂ®. A single 800,000-square-foot distribution center in nearby Bethlehem, Pennsylvania, handles finished goods for logistics to U.S. and international customers, and to global business units.

Each plant and its products have their own unique supply chains because the raw materials, suppliers, and requirements all differ. For example, paraffin wax for crayons comes from sources in Louisiana and Pennsylvania via rail tanker cars twice a week, so proximity to the railroad is essential for the Forks I plant making crayons. All raw materials for each supply chain are first evaluated by independent board-certified toxicologists so Crayola can assure its products are not only of the highest quality, but also safe and nontoxic. Then, design hazard and risk assessments are done for all products during development to ensure production meets the stringent standards set by the Art and Creative Materials Institute (ACMI).

Pete Ruggiero, Executive Vice Presidentâ€”Global Operations, and his team have responsibility for designing supply chains that are innovative, resilient, responsive, and sustainable while assuring quality, ethics, and cost considerations are met. Whenever the companyâ€™s marketing division develops a new product kit that might contain paints, clays, crayons, markers, or other products, the supply chain sourcing of the raw materials as well as the downstream production processes must be addressed to be sure the forecasted demand can be accommodated within the existing facilities. Not long ago, the company introduced an innovative product called ColorWonderÂ® that consists of pens that only write on the special paper they are packed with for sale. This required examining whether the existing supply chain could support the addition of producing the specialized ink markers, where to source the coated paper, and how to best create the kits containing both markers and paper.

Now in production, ColorWonderÂ® is a bestseller worldwide, with nearly 40 percent of Japanese sales coming from this product alone. Managers received feedback from the market that the pens in the kits were lasting longer than the paper, so the supply chain responded by creating separate paper packets so consumers may purchase just the paper after the initial pages in the kit are used. The result of this action has had a ripple effect on the demand for markers, which is now lower, since consumers are buying fewer full kits but more Color WonderÂ® books, so the supply chain and production had to adjust once again.

Another major challenge is the assembly of kits whose components are derived from diverse supply chains and assembled into finished products in the companyâ€™s LVIP plant. An example is the popular Washable Deluxe Painting KitÂ®. The kit consists of paints and watercolors, paint brushes, smocks for the artist, and sponges for special effects. The company wants to expand sales into the growing Asian market. The kitâ€™s paints and watercolors are made by Crayola in the United States, but the paintbrushes and sponges come from China and the smocks come from Vietnam. Labor costs for assembling the kits in the United States is a significant component, so if Crayola wants to sell the kits internationally, it needs to explore whether it makes sense to keep the existing supply chain design in place, or make a change to begin producing the kits closer to the growth in its international customer base. The lynchpin of this decision is that all components (including paint and watercolor trays historically manufactured in the United States) need to be made in Asia to make production efficient, and minimize duties and lead times. By producing the entire productâ€”including its components and packagingâ€”in Asia, Crayola is able to optimize its delivered cost to the markets. Producing this product in the United States and shipping it to Asia would be an impediment because of cost and lead time challenges.

Question 2
Chapter 13: Select two organizations, one in services and one in manufacturing. Provide a discussion that addresses the following questions:

ï€ What are the key factors that each organization would consider in locating a new facility? Rank the factors you identified according to their importance.
ï€ What data would you want to collect before evaluating the location options, and how would you collect the data?

Question 3
Chapter 14: Discuss some of the important risks and challenges faced in managing global supply chains (about 400-500 words).

Question 4
Chapter 15: Read the case â€œSupply Chain Sustainability at Clif Bar & Companyâ€ on page 616 of the textbook. Provide a discussion that addresses the following questions (about 200-400 words):

ï€ In what ways does Clif Bar & Company have a sustainable supply chain?
ï€ What issues or risks to sustainability could Clif Bar & Company encounter if it chose to expand to international markets?

When Gary Erickson started out on one of his typical long-distance bike treks in 1990, he expected to have a great ride. What he did not expect was to come home with the idea for a sports nutrition energy bar that became the genesis of Clif Bar & Company.
After consuming most of his supply of Power Bars partway through the 175-mile ride, Erickson could not face the prospect of consuming another one. Instead, he figured he could come up with something better. Something sports enthusiasts would not mind eating in quantities while out on the road or the trail. The result? The CLIFÂ® BAR, an all-natural combination of grains, nuts, and fruit, with far more taste appeal than the standard energy bar of the time.

Today, the Berkeley, Californiaâ€“based company has over 100 stock-keeping units, or SKUs, in its product mix, including numerous flavorful versions of the original CLIF BAR plus brands such as LUNAÂ®, The Whole Nutrition Bar for Womenâ„¢; CLIF Kid Organic ZBaRâ„¢, The Whole Grain Energy bar for kids; CLIF Mojoâ„¢, The Sweet & Salty Trail Mix Bar; and CLIF NectarÂ®, an organic fruit and nut bar made with just five ingredients. CLIF BARs were originally distributed through cycling shops and other niche retail outlets but can now be found in a wide variety of retail outlets in the United States, such as Whole Foods, Trader Joeâ€™s, REI, and even your local grocery store.

From the beginning, CLIF BARs were made from wholesome ingredients. Yet as Erickson looked at the ingredients being sourced for CLIF BAR, he realized that making a healthy food product and sourcing ingredients from farmers, ranchers, and cooperatives using organic growing techniques was a â€œnaturalâ€ fit. The company made a commitment to both sustainable growing techniques and using only organic raw ingredients back then, and by 2003, had made CLIF BAR 70 percent certified organic. Since then, six of Clif Bar & Companyâ€™s CLIF and LUNA brands are now made with 70 percent organic ingredients or more.

The impact on the supply chain for sourcing organic ingredients is tremendous. First, there is a limitedâ€”but growingâ€”number of organic growers for the ingredients Clif Bar uses. Second, growers who do not use pesticides, herbicides, and genetically modified plants are sometimes at risk of producing lower crop yields. Third, it can be more costly to store the ingredients. And fourth, as more companies commit to environmentally responsible programs and organic ingredients, competition is great for the available global supply.

The companyâ€™s forecasters and planners work hard to manage both the raw ingredient inventory flows from upstream suppliers and the finished goods flows to downstream customers to be sure products are available in the right quantities and right locations. Ordering on raw materials and packaging materials is aggregated to provide efficient sourcing. Production is planned, based on both input and output forecasts, to maximize customer service and minimize inventory. Several times a year, production plans are shared with business partners at all points of the supply chain to make sure the flow of ingredients and products is smooth, and that inventories do not accumulate at any point in the supply chain beyond planned volumes. Monthly forecasts and changes to plans also are communicated to all supply chain partners.

Clif Bar & Company managers know that consumersâ€™ tastes for products change regularly, so new flavors and brands are periodically introduced into the various brands. Likewise, flavors are sometimes retired to make room for new ones. As the companyâ€™s research and development team prepares to move a new product idea from the test kitchen to the manufacturing plant, supply chain managers must get to work to ensure any new ingredients can be procured.

As a smaller and privately owned company, Clif Bar does not own its manufacturing plants and distribution centers, and relies on contractual agreements with outsourcers in the United States. These supply chain business partners are carefully chosen for their ability to manufacture and distribute Clif Barâ€™s products, their commitment to quality, and their alignment with Clif Barâ€™s own value system. This value system, referred to as the companyâ€™s â€œFive Aspirations,â€ holds that Clif Bar & Company will work toward sustaining its people, brands, business, community, and the planet. Greg Ginsburg, Vice President of Supply Chain, wants to be sure all parts of the supply chainâ€”owned or notâ€”are in agreement with these aspirations. â€œWe look at their energy sourcing, labor practices, and workplace environments. And where we source products from small cooperatives, weâ€™ll go as far back as possible to assure those tiny growers know about our expectations,â€ says Ginsburg.

Question 1 Chapter 12: Read the case â€œSupply Chain Design in Cra...