Coordinating and Managing Supply Chains - Harvard Business School MBA Program

Coordinating and Managing Supply Chains

Course Number 2125

Professor Janice H. Hammond
Winter, Q4, 1.5 credits
14 Sessions

Course Introduction

Coordinating and Managing Supply Chains (CMSC) builds on aspects of the First-Year Technology and Operations Management (TOM) course. However, whereas first-year TOM focuses primarily on producing and developing products and services, CMSC emphasizes managing product availability, especially in a context of rapid product proliferation, short product life cycles, and global networks of suppliers and customers. Hence, topics not examined in first-year TOM such as inventory management, distribution economics, and retailing operations are explored in depth in CMSC.

CMSC also differs from first-year TOM in that first-year TOM concentrates primarily on material and information flows within an organization, whereas CMSC focuses on managing material and information flows across functional and organizational boundaries. The course emphasizes the "general manager's perspective" in supply chains. The course makes clear that suitable information technology and knowledge of analytical tools are necessary, but not sufficient, ingredients for supply chain integration.

Career Focus

This course is appropriate for students interested in pursuing careers in any management function (e.g., operations, marketing, and finance) in firms that make, sell and/or distribute physical products, as well as in companies (e.g., consulting firms, investment banks, private equity firms, and software providers) that offer products and services to those firms or analyze, evaluate, and/or invest in those firms.

Course Structure

The CMSC course comprises two modules:

Planning and Execution This module provides an introduction to the basics of supply chain management, with an emphasis on how to design and manage a supply chain to ensure that product supply meets product demand. The module highlights the significant costs of excess or insufficient inventory in a supply chain, and helps students recognize that excessive or insufficient inventory is often a symptom of underlying problems. Students identify various levers that can be used to better match demand with supply, such as transportation alternatives, production flexibility, production planning, lead-time reduction, demand forecasting, and delayed product differentiation. This module also introduces students to common supply chain execution problems, the magnitude of their impact, and how they exacerbate planning challenges.

Several sessions in the module focus on analytical techniques such as inventory modeling, forecasting, and production planning. These sessions are intended to build students' abilities as general managers to be "intelligent consumers" of these techniques, that is, to be aware of the capabilities, assumptions, and limitations of each technique. For example, a general manager should be capable of understanding the assumptions implicit in the use of a particular technique and whether the technique is appropriate in a specific business context. These analytical sessions do not, however, create experts in analytical techniques: students interested in becoming experts in these analytical techniques are advised to extend their knowledge beyond that imparted by this course.

Logistics and Coordination This module examines how supply chain partners are linked together physically and through business processes. The module's cases outline the basic elements of a logistics system and how they fit together. The materials cover topics such as transportation economics, network design, and the role of distributors for the efficient and effective flow and storage of goods and information in a supply chain.

The module also explores the different perspectives and incentives of various members of the supply chain. Problems often arise due to conflicting channel incentives. In some cases channel performance is poor not because channel partners don't know what they should do to improve channel performance, but because they don't have the right incentives to make those choices. Indeed, incentives often lead members of the channel to maximize the performance of their individual function or firm at the expense of overall channel performance. To provide a framework for analyzing these issues, the module introduces students to the basics of principal-agency theory and shows how the insights derived from the theory apply to supply chain management.