SCM 300 Exam 2

1) From which parts of the world is coffee sourced? Why is that a concern for Starbucks?

- 50% from Latin America - 35% from Pacific Rim - 15% from East Africa - Most of the coffee producers were small to medium-sized family-owned farms.

Contract Manufacturer

- A company that produces goods on behalf of another organization - Examples of outsourcing and contract manufacturing: Apple designs numerous digital devices but they outsource manufacturing to companies like Foxconn and Pegatron. Foxconn and Pegatron would therefore be considered Apple's contract manufacturers.

CPFR (Collaborative, Planning, Forecasting, Rescheduling)

- A formalized effort by supply chain partners to share data and collectively develop forecasts in an effort to reduce supply chain costs through better planning.

Planogram

- A map of where every product goes on a retail store shelf.

Lean Manufacturing

- A production philosophy that strives to meet consumer demand and desires but with minimal inventory levels and minimal supply chain waste. - Ex. TPS(Toyota Production System/ Just- In Time)

Prototype Stores

- A series of stores that have common design, construction and layout - Example: Starbucks

Push System and Push System Characteristics

- A system in which consumer demand is known and expected. As a result a supply chain will preemptively buy materials, manufacture finished goods, and even deliver them to a store or a picking and packing facility where consumers can buy them at a later date. Inventory is "pushed" toward the consumer in anticipation of consumer demand.

Postponement

- A system that combines push and pull - pushing product elements that are considered standard and then allowing customers to pull product elements that can be customized. Those product elements that are standard will be produced in advanced, and then final production will be delayed (postponed) until the consumer places an order that specifies the customized elements.

Pull System and Pull System Characteristics

- A system that is activated by consumer demand. As a result a supply chain will not make and store finished goods inventory. Instead, the supply chain will wait for the consumer to place a specific order and only then will the supply chain react by perhaps buying raw materials and/or parts, and then assembling the desired goods, before quickly delivering them to the consumer. Inventory is "pulled" by the consumer by communicating a specific desire to those in the supply chain.

VMI (Vendor Managed Inventory)

- An arrangement where retailers allow vendors to monitor in-store inventories, initiate orders/shipments to the store when inventories are low, and also bring the items into the store and onto the shelf

Goals of Waiting Line Management

- Balance the cost paid by the customers (time) with the cost paid by the company (money paid to maintain the system)

3) What is CAFÉ practices and what is its purpose? What are the benefits to Starbucks?

- CAFÉ practices was a set of coffee buying guidelines designed to support coffee buyers and coffee farmers, ensure high quality coffee, and promote equitable relations with farmers, workers, and communities, as well as to protect the environment. - The program strengthened Starbucks' supply base, improved its marketing ability, and increased its visibility into the supply chain.

4) Reasons for Toy Recalls

- Excessive use of lead paint - Defects in product design - Potential for misuse

5) Describe Zara's Design and Production center in La Coruna.

- Her design and production center is attached to Inditex headquarters in La Coruna. - It consists of three halls: one for women's clothing lines, one for men's, and one for children's.

Square Root Rule - Risk Pooling

- Inv Future = Inv Present [ (SqRt WH Future ) / (SqRt WH Present ) ] - Inv Future = Total combined inventory needed in future - Inv Present = Total combined inventory in present system - SqRt WH Future = Square Root of total number of future warehouses - SqRt WH Present = Square Root of total number of present warehouses

1) What are some of the primary directives Wal-Mart has established for its Chinese suppliers?

- Issues related to Sustainability, Quality, and Transparency

3) How is Zara's supply chain different from most other supply chains in their industry?

- Keeps almost half of its production in-house - Far from pushing its factories to maximize output, Zara intentionally leaves extra capacity. - Rather than chase economies of scale, Zara manufactures and distributes products in small batches. - Instead of relying on outside partners, Zara manages all design, warehousing, distribution, and logistics functions itself. - Zara puts price tags on items before they're shipped, rather than at each store. - Zara tolerates, even encourages, occasional stock-outs.

5) Brief Description of Each of the Recall Incidents

- Lee Der Industrial was responsible for the first set of recalled toys due to the use of an unapproved paint supplier that used an excessive amount of lead paint on the products. - Magnet Recalls - 18.2 million toys were recalled worldwide due to small magnets that are unsafe for children. Mattel improved the magnet retention design and relaunched the product.

3) Pressures on Chinese Manufacturers

- Mattel and its competitors had to continually reduce prices in order to meet the demands of the big retailers which put pressure on Mattel's suppliers to continually cut their costs. - They had the pressure of lowering costs to maintain their relationships with buyers because of the recalls that occurred.

Obstacles to Integration

- Obstacles to integration are all related to poor communication, an unwillingness to share, and/or lack of trust between supply chain partners

Shrinkage Calculation

- Order Size Required = (Actual Demand) / (Proportion of Acceptable Product per Order) - Always round up

Last Mile

- Portion of the supply chain between the final inventory holding facility and the end consumer

Omni-channel Retailing

- Retailers that are fully committed to engaging customers via catalogs, phone calls, websites, email, internet chatrooms, social media sites or mobile apps, and of course also in stores - Ex. Nordstorm

Rocks and Water Analogy

- Rock represented a different supply chain weakness: poor forecasting, high defect rates, unreliable suppliers, theft, unreliable shippers, etc. In each case more inventory might help hide these weaknesses. - Imagine if instead a company decided to remove the rock instead of hiding it with more water. In other words, imagine if they fixed the problem instead of hiding it with inventory. This is what companies that embrace lean systems try and do everyday."

2) Describe their supply chain: suppliers, processors...

- Suppliers in Latin America, Africa, South America, and Southeast Asia - Packed and shipped to over 10,000 stores worldwide - CAFÉ practices

Importance of Supply Chain Integration

- Supply chain integration is the only way for supply chain partners to achieve effectiveness, efficiency, and adaptability.

Sustainability

- Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their needs.

Bullwhip Effect

- The bullwhip effect is a supply chain phenomenon where fairly stable demand results in a proliferation in the amount of inventory that is carried as one travels upstream in the supply chain.

Business Process Outsourcing

- The outsourcing of office activities like accounting, human resources, customer service activities (like call centers and customer chat) - Sometimes these types of outsourced activities are referred to as back office activities. - Example: IBM offers business process outsourcing to companies in the US and around the world. IBM offers companies help in the areas of employee recruitment, supply chain services, customer care and management of financial data. If you owned a small company you might consider having IBM help manage these types activities rather than developing departments

9) What types of products does Zara produce themselves? Which items do they outsource?

- The simpler products, like sweaters in classic colors, are outsourced to suppliers in Europe, Africa, and Asia. - Zara reserves the manufacturer for more complicated products, like women's suits in new seasonal colors, for their own factories.

7) What are some positive customer behaviors Zara sees because of its operational plan?

- There is a sense of tantalizing exclusivity, since only a few items are on display - A customer thinks, "This green shirt fits me, and there is only one on the rack. If I don't buy it now, I'll lose my chance.

Chargebacks

- These are effectively penalties charged by retail organizations to their suppliers/vendors for any number of minor and major supply chain offenses

2) What are some of the things Zara can do because of the super-responsive supply chain it has built?

- They can ramp up or down production of specific garments quickly and conveniently because it normally operates many of its factories for only a single shift.

Rationalized Retailing

- This retail strategy has retail chains develop rigid control structures to develop and manage processes such that all the retail outlets are managed in the same way. - Example: Employee can work at different locations without much change.

1) What were the key lessons Ortega took away from his early scare?

- To be successful, "you need to have 5 fingers touching the factory and 5 touching the customer." - Translation: Control what happens to your product until the customer buys it.

3) What did one supplier cite as Wal-Mart's corporate culture problem?

- Wal-Mart has to change the internal culture—as one of the suppliers told me, "They sound serious, but with buyers it's still price, price, price."

2) What will Wal-Mart do if suppliers do not comply? At first? Long-term?

- Wal-Mart will work with suppliers that fail to comply, but "if after a period of time, the supplier does not improve, we will move our business."

Outsourcing

- When a company contracts an outside firm to perform services, operations, or business processes that were previously performed in-house.

Offshoring

- When a company moves manufacturing out of its "home" country to another country. - Example of offshoring: Ford Motors has a significant offshoring strategy. While the American company Ford Motors has manufacturing plants in the United States, it also has plants around the world in many countries including China, Germany, Brazil, Russia, and South Africa

4 Retailing Options

1) Brick and Mortar - All products and services are sold to customers from physical stores. Example: McDonald's 2) Online or E-tailing- All products and services are sold to customers through an online website. Example: Amazon.com 3) Bricks and clicks - Products can be bought from a physical store or from an online system. Example: Barnes and Noble and BN.com 4) Clicks and calls - In addition to taking orders via the company website, some companies will also offer sales via the phone. Examples: Lands' End and L.L. Bean

4 Managerial Considerations in Queues

1) Customers - How many are there? How quickly are they arriving? 2) The Waiting Lines - What types of lines? How many lines? 3) Employees - Who's working in the system? How many? Skill level and speed? 4) Service Facilities - How effective and efficient is the process? Tools?

4 Store Security Issues

1) Employees - Managers, store employees, and potentially vendors 2) Store Assets - Inventory, cash, store property 3) Customers and their Assets - Store visitors, their cars and also any other personal property 4) Data - Company, customer, and vendor data

4 Types of Retail Ownership

1) Independents - One store, one owner. Usually they are trying to satisfy a very specialized market or locale. Example: Family owned corner stores, Boutique store that is run by the owner 2) Chains - Multiple stores/facilities, one owner/company. Example: Home Depot, Wal-Mart, Costco, Gap, Macy's, Safeway (Amazon.com probably best fits this category) 3) Franchises - A franchisor owns the rights to a company and the name. A franchisee is allowed to open an outlet under that name. The franchisee must abide by the rules and processes of the franchise. Examples: Jiffy Lube, McDonald's, 7-eleven, Buffalo Wild Wings, Massage Envy 4) Cooperatives - Retailer that is owned by its customer members. These organizations typically try and fit the very special needs of the consumers that organized the cooperative. Examples: REI (Recreational Equipment Inc."

Parts of a Waiting Line System

1) Input Source - This is the population of people that might want service 2) Waiting Line - The area in which customers wait for service 3) Service Facility - The area in which customers actually receive service

3 Retail sources of supply

1) Manufacturers - These are the companies that actually create the finished goods. Retailers then buy the goods and that retailer is responsible for distribution and storage. 2) Wholesalers - These organizations purchase goods from manufacturers. Typically they purchase an assortment of goods from many manufacturers, thus a retail company could purchase all of their electronics from a single wholesaler versus having to purchase from each individual manufacturer. 3) Drop shippers - This one is not really a source of supply, but rather an organization that ties manufacturers and/or wholesalers directly to consumers.

8 Supply Chain Processes

1) Product development and commercialization: What does the customer want? When? Can we organize the right suppliers, manufacturers, distributors, and retail organizations to get the job done right? 2) Supplier Relationship Management: Finding suppliers. Developing relationships. Managing present and future purchases from the suppliers. Working together to improve quality. 3) Manufacturing Flow Management: Making the right items to meet customer expectations. Doing this using the least amount of resources possible. 4) Demand Management: Utilize forecasting to understand likely demand. Once a forecast is available manage the firm's facilities and resources to meet expected demand. 5) Order Fulfillment: If proper demand management has taken place, then it will be time to fulfill orders. This might include picking, packing, and shipping items to the customer. 6) Customer Relationship Management: Utilizing information to better understand the needs and desires of your customers today and into the future. 7) Customer Service Management: Communication between customers and the supply chain. Providing customers with product availability details and tracking information. Providing customers with product assistance and maintenance opportunities. 8) Returns Management: Dealing with reverse logistics issues such as damaged and unwanted products, product recalls, the return of pallets to the distribution center, etc. Understanding problems[...]"

5) What are some of the challenges Starbucks faced in implementing CAFÉ practices?

1) Since some members of the supply chain had very poor information systems, it could be very difficult to gain economic transparency from these members 2) As C.A.F.E. Practices were updated and refined, it became a daunting job to effectively communicate the revised requirements and practices to farmers, suppliers, and other members of the industry

A grocery store estimates that customers arrive at the rate of 15 per hour. The cashier can serve customers at a rate 20 per hour. Calculate the average number of customers in a system.

1.25

Swift Chicken restaurant estimates that customers arrive in their cars at the rate of 8.5 per hour. The cashier can serve customers at a rate 10 per hour. What is the average number of customers in the system?

5.67

According to the eNotes, which shipping document serves three purposes: Contract between shipper and carrier, Receipt of goods, and certificate of ownership?

Bill of Lading

According to the eNotes, _____________ certification of your company can prove to other companies that your company is committed to sustainability at an organizational level.

ISO 140000

6) How does Zara control the bullwhip effect?

In an industry that allows retailers to change a maximum of 20% of their orders once the season has started, Zara lets them adjust 40% to 50% to avoid costly overproduction and the subsequent sales and discounting prevalent in the industry.

4) How does a company join CAFÉ practices (requirements)? What are the benefits once they join?

In order to qualify for CAFÉ Practices, suppliers have to be independently verified and meet minimum social responsibility criteria.

According to the eNotes, which of the following is a production philosophy that strives to meet consumer demand and desires but with minimal inventory levels and minimal supply chain waste?

Lean Manufacturing

7) What were the negative impacts to Mattel related to these recall issues?

Mattel suffered a huge blow in consumer confidence due to the new perceptions of the safety of Chinese made products

According to the eNotes, if the American company Mattel decides to manufacture their toys (to be sold in the US) in China at facilities owned and operated by Mattel, this would be considered _______

Offshoring

1) Provide a basic background of the recall problem

On Aug 2, 2007, Mattel recalled 83 products in its Fisher-Price toy lines (approx. 1.5 million toys recalled) due to the use of excessive lead paint.

8) Why does Zara prefer to own production assets?

Owning production assets gives Zara a level of control over schedules and capacities that would be impossible to achieve if the company were entirely dependent on outside suppliers.

According to the eNotes, _______ can be used to estimate warehouse inventory requirements for a risk pooling strategy

Square Root Rule

According to your assigned readings, which of the following companies is matched with their supplier certification program?

Starbucks - CAFE Practices

According to the eNotes, _________________ is development that meets the needs of the present without compromising the ability of future generations to meet their needs?

Sustainable Development

6) How did each incident occur? In particular, how did the lead paint incident occur? Who were the primary parties involved?

The lead paint incident occurred when Lee Der began to use an approved paint supplier, Dongxing New Energy. there had been no quality problems until in April 2007 when Dongxing ran out of yellow pigment and bough a supply of 200 kilograms from a company they found over the internet. This company provided a certificate that the pigment was lead free - a certificate that turned out to be false.

2) Explain Mattel's Supply Chain - Be able to discuss Mattel's basic supply chain structure from design to retail. In general, who was responsible for what? Core brand vs. non-core brands

The manufacturer, Lee Der, was responsible for the excessive use of lead paint. They used a paint supplier since 2002 known as Dongxing New Energy which was not on Mattel's list of eight approved paint suppliers.

4 Reasons to be Socially Responsible

• Avoid government fines and regulation - Governments are moving toward making many forms of social responsibility the law. Some companies seek to change before change is imposed upon them. • Seek positive public image - Being seen as a socially progressive company may expand your market and dissuade regulation that might directly impact your organization. • Demonstrate to customers and employees the company's goals and values - Customers and some of a company's best employees may value social responsibility. They might prefer if the company had similar values. • Protect the company's interests - Some would argue that being good has many long-term rewards, even in business

4) What are the three principles Zara lives by? Know what these principles mean and how they are carried out.

• Close the communication loop - goal is to close information loop between the end users and the upstream operations of design, procurement, production, and distribution as quickly and directly as possible • Stick to a rhythm across the entire chain - spends money on anything that helps to increase and enforce the speed and responsiveness of the chain as a whole • Leverage your capital assets to increase supply chain flexibility - make capital investments in production and distribution facilities and use them to increase the supply chain's responsiveness to new and fluctuating demands

4 Tools for managing Ethical SC

• Continuous Education and Awareness Programs- Everyone thinks they know how to be ethical. Don't take their word for it, provide opportunities for people to learn about how to identify and avoid unethical behavior. • Security across the supply chain - In our modern world, a company that does not protect its products, people, and data is creating an unsafe environment. • Establish a whistleblower program - If an employee discovers an ethical breach who can they tell? Will this employee be safe if their superiors are perpetrating the unethical behavior being reported? • Monitoring and Auditing Programs - While these types of programs have their limitations, not attempting to monitor and/or audit supply chain partner and employee behavior?

SA8000

• Developed by Social Accountability International, SA8000 is certification that focuses on social responsibility in the work place. May be of value to companies seeking the approval of customers and/or present and prospective supply chain partners. o Child labor o Health and Safety o Discrimination of any type o Payment/Compensation - Fair and legal pay. Workers are provided a living wage. o Unionization Rights - Freedom to form and join labor unions and also the right to collective bargaining o Forced labor - Includes prison labor. Organization does not motivate employees to stay by withholding payment or driving workers into debt. o Disciplinary practices - Fair treatment of all workers. No mental or physical punishment. No abuse of any type. o Working hours - Abides by laws of the state. Also complies with work weeks of no more than 48 hours. No more than 6 consecutive days of work. o Ethical Management Systems- Being a complaint organization is not enough. Companies must have a standardized system that supports and nurtures a social responsible work place."

3 Links between SCM and SR

• Eliminate waste - Good supply chain and business sustainability both value efficiency. • Legal and Ethical Business Practices - Treating customers, employees, and supply chain partners well is vital to controlling costs, maximizing productivity, and increasing sales. • Improve quality of life - While supply chains are supposed to efficiently deliver valuable products and services to customers, we can also extend this point to say that the best supply chain practices in business, government, and military can be useful to organizations that seek to save lives

5 Methods for Controlling the Bullwhip Effect

• Every day low pricing (EDLP) - When suppliers resist the urge to have sales promotions and instead offer their lowest (and most competitive) prices each day, buyers do not see an advantage to buying in bulk. Instead buyers are more likely to purchase at levels that are closer to their actual demand levels. This is a positive two-way communication. Suppliers are saying "these are our best prices". Customers are saying "at these stable prices we will buying only what is needed. These are our actual demand levels." • Vendor Management Inventory systems (VMI) • Information sharing between supply chain partners. • Develop strong buyer-supplier relationships that result in the sharing of supply chain responsibilities and even strategy and planning. • Practicing lean manufacturing across the supply chain. Defects, waste, and a general lack of supply chain stability results in higher levels of uncertainty. Sound supply chain practices result in good products produced with minimal resources. These positive results require less safety stock to meet a much lower level of uncertainty.

Recap of Supply Chain Basics

• Focus on People - Good supply chain decisions positively impact customers, employees, and investors. • Competitive Priorities - Good supply chains deliver the right mix of cost, quality, speed, and flexibility to their target market. • Measuring success - The best supply chains are effective, efficient, and adaptable. Effective - Creating and delivering great products and services customers want. Efficient - Using minimal resources and eliminating waste. Adaptable - Ready for change, constantly evolving. • Maximize Value - Provide customers the best possible product and service bundle at the lowest possible cost and in the most convenient way possible. • Productivity - Maximize a company's high quality output using the fewest resources possible."

Keys to Lean Manufacturing

• High Performance Quality • Consistent Quality • Quality at the source - Empowering every employee to be a quality inspector and manager • Continuous Improvement - Being lean means being devoted to the consumer. • Poka-yoke - Mistake-proofing. Lean companies will find ways to completely eliminate certain types of errors. • Close supplier ties - Good relationships, trust, and information sharing reduce uncertainty and thus will result in fewer unwanted supply chain surprises. • Small lot sizes • Standardized components and work method • Dedication to the Workforce - Lean systems require finding errors, fixing errors, identifying opportunities for improvement, and relationship management with supply chain partners." • Using Automation when Appropriate • Short Set-up/Change-over - Set-up time is the amount of time it takes to change a system from producing one product to producing a different item. Keeping short set-up times allows systems to run "leaner". o Consider the EOQ formula for manufacturing: EOQ = Sqrt [(2*Demand* Set-up Costs) / Holding cost]"

ISO 14000

• ISO 14000 certification of your company can prove to other companies/potential supply chain partners as well as customers that your company is committed to sustainability at an organizational level.

3 Parts of Social Responsibility (SR)

• Legal and Ethical Behavior - Acting within the law in all of the nations in which they conduct business. It might also include treating stakeholders well - employees, business partners, and customers. • Sustainability - Earth-friendly business practices. Having business practices, products, and services that do not harm the environment in the present nor in the future. • Commitment to the Community - Investing in the well-being of the communities in which the business operates as well as the greater world.

Challenges of being Sustainable

• Motivating supply chain partners - Some companies still do not see value in sustainable programs. • Customers want things that last - More durable items often don't break while you own them. That's the problem; they may not easily breakdown once tossed into a landfill. • Local versus Global management- If every city, state, province, and country has different sustainability laws and programs, your company may need to create a different sustainability plan for each region. • Lack of understanding/knowledge - Some companies realize they have problems and are very willing to fix the problem. The only problem they may face is confusion. Global supply chains are extremely complex. Changing something in procurement may have unforeseen impacts on distribution. Companies want to change but don't know how. • Metrics - You can't fix a problem unless you can find it and measure how bad the problem is. Similarly, you can't prove the problem has been solved unless you can measure the level of improvement • Managerial support - Is your boss willing to fund and support new technologies, materials, and business practices in an effort to make your company greener?"

Examples of Ethical Issues in SCM

• Obey laws - Whether in your country or abroad. • Choosing ethical business partners - Some companies may seek to pass on the responsibility of unethical business practices to their supply chain partners. In this way they can hide behind excuses and lies. • Do not bully supply chain partners and/or employees; Large companies with lots of power may use their influence to abuse companies and/or people. They may also force them to do things that are illegal or unethical. • Conflicts of interest - Some suppliers may seek to ensure a contract with your company by giving expensive and/or inappropriate gifts to your procurement manager. Other types of conflicts of interest may include special favors for family members or capitalizing on financial insider information. • Protect the environment, workers, and consumers - Causing harm to people or our planet is unacceptable. • Breaches in intellectual property, consumer and employee personal data, and confidential business information

4 Causes of the Bullwhip Effect

• Order Batching- When companies place large and infrequent orders from their suppliers. Typically this is done to take advantage of quantity discounts and economies of scale in purchasing and delivery. The problem is that the infrequent orders leave large communication gaps (uncertainty) for suppliers and it may also require suppliers to carry large amounts of inventory so they can be prepared when those large orders are actually placed. • Forward Buying - This is the result of suppliers offering sales. Buyers are motivated to buy in large quantities to take advantage of low prices. Buyers are not buying based on demand, but rather on price. Therefore, true demand is unknown by sellers (uncertainty). Sellers experience the uncertainty of demand due to their own short-term drops in price for their customers. • Rationing- Sometimes, despite their best efforts, suppliers do not have enough inventory to satisfy the demand of all of their customers. If this is the case, suppliers may ration their inventory and send each of their customers only a fraction of the inventory that was ordered. • Shortage Gaming - Rationing can often lead to shortage gaming. In rationing, customers only receive a fraction of their placed order. This leaves the customer short of their desired inventory level. If customers feel that this rationing may occur again, customers may try to "game" the system by placing an order larger than their expected demand

Ways SC can be more Sustainable

• Procurement - Purchasing better materials, fewer materials, safer materials • Logistics - Transportation efficiencies, reduce fuel consumption • Manufacturing and Operations, Facilities - Energy consumption, defect reduction, minimize emissions • Reverse logistics - Recovery of packaging, damaged items, parts, etc. for reuse, refurbishing, re-sale, recycling • Supply chain sustainability catalysts - Large powerful companies can become catalysts often have the power to motivate thousands of suppliers to become sustainable. This not only impacts the catalyst's supply chain, it impacts every other company that buys material from that supplier. • Rethink design - Poor design will always yield poor outcomes. Sometimes companies need to start from scratch and develop a new design. Example: Electric car engines instead of gasoline powered engines • Sustainability Accounting - Companies cannot fix a problem until they can find the source. With the help of accounting supply chains can identify primary areas of costs related to unsustainable business practices. • Develop Sustainability Metrics - Metrics help companies find problems, track improvement, and they can also motivate employees to change their behavior. • Life Cycle Analysis - A systematic approach that attempts to quantify the environmental impact of every step in the supply chain. This helps companies identify different types of problems in different parts of the supply chain.

Basic Waiting Line Terminology (Queue, Channel, Phase, Infinite/Finite Population of Customers, Balking, Reneging)

• Queue - Line. • Channel - Line. Here it often refers to the number of lines available at each step. • Phase - A single step in a process. Example: Phases in college enrollment might include: Application process, Registration, Orientation, Scheduling your courses for the first semester. • Infinite population of customers - The number of possible customers that may come into the store is very high (or unlimited). When a customer enters the system, the odds of another entering the system are not impacted in any significant manner. • Finite population of customers - The number of customers is limited. Example: If you have a bus company that has 10 busses, then your company's repair shop has a finite population of 10 busses. If 1 bus is in the shop only 9 others are left in the population. The odds of a 2nd bus entering the system decline. • Balking - When a potential customer sees the line, but never joins the line because they think it looks too long and/or too slow. • Reneging - When a customer joins the line, gets frustrated and leaves the line.

Sustainability framework (terms/concepts)

• Triple bottom line - Companies should consider the possible economic, environmental, and social outcomes associated with business decisions. • Reduce, reuse, recycle - Rather than have everything end up in a landfill as garbage, companies should consider ways to conserve materials and energy, maximize the use of their resources, and find new uses for items that are no longer valuable. • Cradle to grave design vs. Cradle to cradle design - In the past items were designed to be purchased and used for some purpose. Little if any thought was devoted to what would happen when the item was no longer useful. This was cradle to grave design. All items were destined for landfills. • Closed loop supply chains - Utilizing the idea of cradle to cradle design, this extends the same concepts to supply chain. Supply chains that seek to create a loop of materials through sustainable procurement, manufacturing, logistics, as well as reverse logistics."

Challenges of being SR

• What's the right thing to do? - Throughout history companies and activists have developed programs and practices intended to result in better social outcomes. Some of the most logical ideas have turned out to result in poor if not dangerous outcomes. Even in our modern society with some much knowledge about commerce, culture, and science, sometimes finding good answers can be extremely difficult? Investigate almost any socially responsible product or business practice and you are likely to find detractors that will argue it causes more harm than good. • Monitoring supply chain partners (and yourself) - Companies in aerospace and automobile manufacturing may have over 1,000 first-tier suppliers. Can any company feel truly confident that all business practices at every organization on every single day are socially responsible? It's difficult to guarantee that every one of your employees is acting in a socially responsible manner everyday. Imagine the difficulty in monitoring behaviors at all levels of your supply chain. • Tracking outcomes across the supply chain- Can you really fix problems across your supply chain without tracking employee behaviors, customer behaviors, resource usage, government fines, etc.