MT236 Unit 9 Seminar Reflection Example

The Drought I Feared and the Filler I Overlooked: A Unit 9 Seminar Reflection on Time to Survive and Time to Recover

[Student Name]

Purdue University Global

MT236: Introduction to Supply Chain Management

Unit 9 Seminar Reflection

[Instructor Name]

[Date]

Alamo Ridge Pepper Co., its links and every time estimate are composite and illustrative; the sources cited are real.

Where I Started

My plan going into the seminar was to recommend a second pepper growing region. Alamo Ridge buys nearly all its jalapenos and habaneros from one processor in Chihuahua, the harvest comes once a year, and drought has hit northern Mexico in recent years. A failed harvest, I reasoned, would stop the business, so the company should contract with growers in another region, perhaps New Mexico, even at a higher price.

The Session's Method

The instructor introduced a method from Simchi-Levi et al. (2014). For each link in the chain, estimate two numbers. Time to survive is how long the company can keep meeting demand if that link stops, using inventory, alternate sources or other buffers. Time to recover is how long the link would take to return to normal after a disruption. Where time to recover is longer than time to survive, the company has a gap it cannot ride out, and that is where risk planning should start.

We filled in the two numbers for five of Alamo Ridge's links during the session.

The Five Links

Pepper mash came first. Because mash ferments for months and the company holds most of a year's supply in drums at the processor and in its own cooler, it could survive about seven months without new mash. A failed harvest might take up to eleven months to recover from, until the next one, but the company could buy mash from other processors at a higher price within a month or two. The real gap is small.

Glass bottles came second. The company holds about four weeks of bottles, and the Houston distributor from Unit 3 could deliver within days, so time to recover is short.

Caps came third, with about six weeks of stock and a four-week recovery through a second molder.

The carrier came fourth. If the contracted carrier failed, other carriers could be booked within days.

The bottling line came last. Alamo Ridge has one filling and capping line. Finished goods cover about three weeks of shipments. If the filler broke, its specialized parts come from a manufacturer in Italy, and a classmate who works in food manufacturing said a major repair could take eight weeks or more. No other line in the company can fill bottles, and no co-packer has been qualified.

The pepper I worried about had seven months of cover; the filler had three weeks.

What Changed

The table reversed my ranking. The harvest is the risk that feels largest because it is visible and dramatic, but the company has already built a buffer against it through fermentation and stock. The filler is the risk that would actually stop shipments, because its recovery time is far longer than its survival time. Sheffi and Rice (2005) argued that companies build resilience either through redundancy, such as extra stock or a second source, or through flexibility, such as the ability to move production. Alamo Ridge has neither for its line.

Why I Missed It

Looking back, I chose the harvest because it was the risk I could picture: dry fields, a news story, a price spike. The filler is a machine in a back room that has run without trouble for six years, so it felt safe. The seminar showed me that a risk's visibility says little about its size. A link that has never failed may simply be one whose failure nobody has planned for. I also noticed that my original plan would have cost real money every year, paying a premium for New Mexico peppers, to protect against a gap the company had mostly closed already.

What I Would Recommend Now

I would recommend two steps before a second pepper region. First, qualify a regional co-packer that can fill five-ounce bottles to Alamo Ridge's recipe, with a test run each year, so the company could move production within a week or two if the filler failed. Second, keep a small stock of the filler parts most likely to fail, such as seals and capping chucks, which would shorten many repairs from weeks to days. Chopra and Sodhi (2004) warn against a single all-purpose remedy, since each kind of risk calls for its own, and here the answer to a breakdown risk is a backup source of capacity, not more raw material.

For Unit 10 I want to find out whether the co-packer arrangement could also help with the grocery chain's uneven orders, since a second source of capacity might absorb the spikes the next unit will examine.

References

Chopra, S., & Sodhi, M. S. (2004). Managing risk to avoid supply-chain breakdown. MIT Sloan Management Review, 46(1), 53-61.

Sheffi, Y., & Rice, J. B., Jr. (2005). A supply chain view of the resilient enterprise. MIT Sloan Management Review, 47(1), 41-48.

Simchi-Levi, D., Schmidt, W., & Wei, Y. (2014). From superstorms to factory fires: Managing unpredictable supply-chain disruptions. Harvard Business Review, 92(1/2), 96-101.