MG/IE 3400 Lab 5: Simulation of Time Wise Supply Chain
C-Term 2003
1. Objective of the Game
In this lab we are going to move our attention away from the operations in the manufacturing plant to the
design and control of the entire Time Wise supply chain. Specifically, the suppliers and customers will be
separated from Time Wise and are considered external partners of the company. Their locations will also
be moved to the outside areas of Rm 228. The objectives of this lab are fourfold:
(1) We will explore one major issue in supply/purchasing management: how to coordinate with
suppliers. Two approaches: multiple sourcing and single sourcing, will be tested, especially
their impacts on the entire chain performance in terms of cost and time.
(2) We will get a feeling of the effect of e-commerce on the supply chain. We will allow outside
customers to have multiple ways to place orders.
(3) We will examine the basic logistical impacts on the supply chain performance. Note that the
distances from the suppliers as well as the customers to the manufacturing plant are
lengthened, introducing the effect of travel/transportation into the system.
(4) We will see how to use a two-bin system to manage safety stocks to protect against the
uncertainties arising from the suppliers and production floor.
2. Description of the Supply Chain
The Time Wise supply chain is illustrated in Figure 1 and the detailed descriptions are given below. Note
that in this lab we will assume that the assembly line is operated efficiently but we will examine how the
plant can respond to customer's needs and suppliers' operations capabilities.
Supply
In this lab a new role called purchaser is created to deal with the external suppliers that provide the clock
hands. Two approaches will be used and described as follows.
Approach 1: Multiple Sourcing
The three suppliers provide the clock hands at the same quality level; however, their delivery time and
sales price vary, as displayed in the following table:
Supplier #
1
2
3
Delivery Time (in sec)
70
80
90
60
75
100
50
85
120
Sales Price (¢/pair)
25
20
15
20
15
12
30
18
10
The suppliers will sit in the lounge area outside Rm 228, so the delivery time includes the time spent on
counting materials and actual delivery. Note that the supplier's actual delivery time and his/her promised
delivery time may not match, creating uncertainty for the supply chain.
Whenever the hands are needed, the purchaser announces the request for quote (quantity and color) to
all suppliers, and the suppliers then individually indicate the delivery time and sales price by drawing the
card from the top of each stack, and then the purchaser selects the best supplier. No communication is
allowed among suppliers.
1
Approach 2: Single Sourcing
The company relies on only one supplier that has established a long-term relationship. This supplier's
delivery time is fixed or of little variation and the sales price changes according to the order quantity as
follows:
Delivery Time (in sec)
Sales Price (¢/pair)
 10 pairs 20
80
 20 pairs 15
 30 pairs 10
Internal Supply Chain
The internal supply chain has the following characteristics:

All materials are stored in each associated assembly station and are sufficient for the assemblies of
the face, back, and clock. The hand assembly station, however, relies on the external supply and is
controlled by a two-bin system: 1st bin for replenishment and 2nd bin containing safety stocks to be
used when the 1st bin is empty and the order for hands is on delivery.

The assembly line follows a single-part flow, meaning that only one clock is produced each time.
Quality control is performed and assured at each station.

The assembly line is controlled by a make-to-stock policy, that is, the production continues w/o the
impact of the demand; however, the production stops when the 1st bin (for replenishment) in the
warehouse is full and restarts when that bin is empty. While the 1st bin is empty, orders are
replenished using the 2nd bin (containing safety stock).
Delivery to Customers

Warehouse managers pick the finished clocks based on customer orders. A trucker delivers them to
the customer.

There is only one customer to be served by Time Wise. The customer is located in Rm. 216,
Washburn Shop, and places the orders in one or more of the following ways: (1) Web, (2) email, and
(3) cell phone. Each order includes information on quantity, color of clock and expected receiving
time.

The customer will keep track of the order cycle time for each order, which is the time between the
placement of an order and the receipt of that order.
Performance Measures
In this game, we will focus on the measurement of the entire supply chain performance. In particular, we
will measure
Measure
Order Lead Time
Mfg Lead Time
Supply Lead Time
TimeWise Revenue
Description
From the moment when the customer places the order to the moment when
the customer receives the order
The time between the beginning of 1st assembly to the end of last assembly
From the B/H station sending the signal to production manager to the
receipt of the materials at the station
# of sales x unit clock price ($5/clock for all clocks)
2
External Suppliers
of Hands
2nd Floor lounge
Two Approaches
1: Multiple Sourcing
Supplier 1
Supplier 2
Supplier 3
2: Single Sourcing
Supply
Supplier
Internal Supply Chain
Face
Assembly
• Single-part flow
• Assembly line
• Make-to-stock system
Black
Blue
Clock
Assembly
Back/Hand
Assembly
Two Bin
Rep
Two Bin
SS
SS
Warehouse
Rep
Distribution
Place orders via
• Web
• Email
• Cell phone
Figure 1: Time Wise Supply Chain
3
Customer
Rm 216 Washburn
3. Base Scenario and Player Responsibilities
We will run the following scenario as a basis for future comparison and redesign of the supply chain. You
will be encouraged to make recommendations and suggestions for possible improvement.
(1) Customer: order 12 clocks (6 blue + 6 black) and 8 clocks (4 blue + 4 black) every 2 minutes.
(2) The need for ordering clock hands depends on the safety stock level at the back/hand assembly
station
(3) Suppliers: each supplier has two sets of cards: one set for delivery time and the other for price. When
the purchaser announces the request for quote, each supplier individually (w/o contacting others)
draws the cards from the top of the stacks and displays his/her delivery time and price. The purchaser
picks the supplier (based on his/her own judgement).
(4) The assembly line is operated by single-part flow and is stopped and restarted by the production
manager based on the safety stock level of the warehouse.
(5) Safety stock at warehouse: guess versus theoretical
(6) Safety stock at hand assembly: guess versus theoretical
Player Responsibilities
#
1
2
3
4
5
6
7
8
9
10
Player
Customer
Order taker
Supplier 1
Supplier 2
Supplier 3
Purchaser
Purchasing associate
Face assembler 1 (blue)
Face assembler 2 (black)
B/H assembler 1 (blue)
11
B/H assembler 2 (black)
12
13
14
15
16
Clock assembler 1 (blue)
Clock assembler 2 (black)
Clock assembler 3 (blue)
Clock assembler 4 (black)
Warehouse manager 1
17
Warehouse manager 2
18
Trucker
19
20
Production Manager
Supervisor
Major Responsibility
Place orders and keep track the total cycle time of each order
Take the orders and then give each order info to warehouse manager
Determine the delivery time and sales priced based on each request for
quote. If selected, deliver the materials to the purchaser’s receiving area,
and the purchaser then delivers to the B/H assembly station
Deal with suppliers and choose the best quote each time
Work with purchaser and keep track all needed information
Assemble the face of blue clocks
Assemble the face of black clocks
Assemble the hand and back of blue clocks and monitor the inventory
level of hands. When the replenishment bin is empty, notify the
production manager to order clock hands.
Assemble the hand and back of black clocks and monitor the inventory
level of hands. When the replenishment bin is empty, notify the
production manager to order clock hands.
Assemble the clock of blue clocks
Assemble the clock of black clocks
Assemble the clock of blue clocks
Assemble the clock of black clocks
(1) Pick the clocks based on the order, coordinate the work with the
other manager, and make sure each order is fulfilled. (2) Monitor the
inventories of finished goods; when the replenishment bin is empty,
notify the production manager to start production.
(1) Pick the clocks based on the order, coordinate the work with the
other manager, and make sure each order is fulfilled. (2) Monitor the
inventories of finished goods; when the replenishment bin is empty,
notify the production manager to start production.
(1) When each order is complete, deliver the items to the customer. (2)
Keep track the sales information, i.e, the revenue
(1) Work together to manage the entire internal supply chain. (2)
Determine when and how much to order the clock hands. (3) Determine
when to stop and restart the production line. (4) Coordinate the
information flow.
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