AMN445 A1 simulation and reflection report PDF

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This is the first assessment of AMN445
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AMN445 Meaningful Marketing: Value Creation and Customer Engagement

Assessment1 simulation and reflection report

Executive Summary

This reflection report used secondary research to analyze and identify the value chain analysis and describe the importance of employee training. Also, explain and analyze all the steps in the simulation in detail, including warehouses, factories, and showrooms. Moreover, comparing the results in two assessment rounds and give some improved methods. Comprehensively understanding the association in each step in this simulation, and I found out the value chain analysis is connected with the simulation. Through the SmartShoe simulation to know decision-makers should carefully consider all sections and control costs to obtain higher benefits. Therefore, I will use knowledge from this simulation to apply it in the future.

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Background

According to Sheehan (2021, the information of simulation), SmartShoe is a medium-sized shoe manufacturer which produces a variety of private-label footwear. It needs to provide the highest quality and sufficient quantity of shoes in ten weeks to AllStar Sports, which is the chief retail customer for SmartShoe. Moreover, I am the manager to do the mission which earns maximum profits from this specific order. However, the following of the four key features will impact the final margin. Which are consumption and profit, quality and quantity of shoes, employees will perform assembly steps, and delivery frequency. Consequently, when decision-makers are making strategy adjustments need carefully to consider all action.

Value chain analysis

Value chain analysis (VCA) is a framework that facilitates capturing the maximum valueadded in economic terms and performing operationally effective equipment chains (Dent et al., 2012). According to Helo and Holweg (2014), there are two senses to explain the value chain analysis. From the view of academic, the value chain and the supply chain are separate then there are different perspectives between them. The “value chain” is that considers features of value creation and contribution. Then the “supply chain” is that considers procedures and tools for designing and producing. However, from the view of the practical, both of them can combine. No matter which cases, these two appearances are both necessary components to a company’s supply chain strategy.

The fast-changing competing environment is a phenomenon these days, so building a new value chain is the main point. Reconfigure characters and relations among a constellation of 2

characters, such as suppliers, consumers, and associates to create a new value is key strategic planning (Normann & Ramirez, 1993).

Through the theory above, I found that each part of the simulation is related to the value chain analysis. Hence, the following are going to clarify each part of the value chain analysis for SmartShoe. First of all, the different functions in the supporting activities will be explained separately then analyzed of each part of the primary activities.

Figure1: Value Chain Analysis

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Support activities:

There are four parts be composed of the support activities. Firstly, the firm infrastructure is as same as the warehouse in the simulation. That is to select the customer value proposition, such as quantity and quality of the shoe materials. Secondly, the human resource management exactly is the factory in the simulation. That is to allocate and train assembly employees. Thirdly, technology is the process of developing new products to sell and improve assembly, just like the showroom in the simulation. Lastly, procurement is to decide the raw materials of the quantity to buy, such as join a buying group or receive just in time delivery. 3

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Primary activities:

There are five parts be composed of the primary activities. First, inbound logistics is responsible for receiving and storing raw materials. Second, operations are in charge of select assembly methods, and workers assemble. Third, outbound logistics are responsible for the shoe order and deliver shoes to consumers in two ways. Fourth, marketing and sales are a charge for adding extra features to the shoes, such as launch events. Then the last one is after-sale service is responsible for the warranty. Through this simulation, to know that the value chain analysis is closely related to it. Either the decision of the warehouse or the decision of the showroom will influence the final margins. As a result, the successful way in the value chain analysis is earning the maximum profits, so that each step of the support activities and primary activities are essential because they are all linked together.

Simulation process and result

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Warehouse

The warehouse is making inventory and final product delivery decisions. To Compare the first round and the second round of the assessment. There are some different sections between them. In the first assessment round, there are only some fundamental sections. Therefore, I decide to choose 3,500 units and 90 quality shoe materials to ensure my produce time and economize the material costs, and I select the batches in the section of the fulfillment method. Although, click the section of batches will increase the shipping costs. But it can make sure my customers take their products on time.

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The screenshot of warehouse in the first round

On the other hand, there are more sections in the second assessment round which are the additional options, the delivery method, and the additional buffer for final delivery.

There are three options in additional options that are the join a buying group, receive just-intime delivery and none. The following are going to discuss these sections separately. Firstly, in this simulation, I found out when I click the section of the join a buying group will influence the material costs and make them low. On the contrary, when I click the receive just in time delivery will increase the material costs. Secondly, there are two sections in the delivery method, which are in-house and outsource. Even though the outsource section could decrease the delivery costs, but this will increase the delay opportunity and influence the final margin. Lastly, the add buffer for the final delivery can limit the production time. Which could ensure products gives to consumers on time.

Therefore, I decided to choose the highest quality, 5000 units, and join a buying group in the section of the shoe materials in the second round. This not only can improve products materials and have enough quantity to earn higher profits but also can decrease the material casts. Also, join a buying group with other companies to earn a 15% discount from supplier 5

and a small risk of delayed delivery. In product delivery, the main point is to save costs and make products delivered on time. However, choosing the highest quality and high units in the above section will increase costs. So that, this needs to be controlled on this part. In order to save this problem, choosing the outsource in the delivery method is for making the low material costs. However, this might have the chance to delay products. Hence, in the section of fulfillment method to click batches, and then add a buffer for final delivery are to ensure consumers get their products on time.

The screenshot of warehouse in the second round

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Factory

The factory is to select production methods, employees, and station assignments. Then, the factory is going to divide into one station and all stations. The following are going to explain various benefits that make me chose all stations in both the assessment rounds. Firstly, all stations can decrease the production time. Secondly, it can maintain the rate of employee production, even though this will spend more coasts on factory, but this can ensure the station utilization of 100 percent in each employee.

So as to show the difference between one station and all stations, comparing the second practice round and the second assessment round to clarify them. The following are the screenshots of factory output. One of them shows that one hundred percent of the station utilization is the screenshot of the second assessment round. In this part, I click all the additional employee options and choose all stations. This means that all stations and the options of the offered training and overtime can maintain productivity.

The screenshot of second assessment round

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However, another screenshot is the second practice round. In this round, I choose one station results in the obvious disparity in the factory output. Moreover, the enormous productivity gap, which may lead to the outcome cannot earn profits.

The practice round of the screenshot

This part is going to describe the section of the additional employee options. Comparing the first round and the second, the section of the additional employee is the only difference. Elaborate on the additional employee options. There are two sections in it which are offer training and offer overtime. This is significant to choose those sections because that offered training can improve productivity, and the offer over time could limit the production time. Furthermore, I found out offer training to employees can improve productively. That could reduce the production time within three to four weeks. Then, there is a study to show that training employee is the important point for influence productively. According to Guan and Frenkel (2019), China is the country in manufacturing, to achieve pressure from Western retailers and global competition. China strives to improve 8

its structures and strategies, such as training employees. This might seriously affect the productivity and flexibility of employees.

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Showroom

Accessories could increase the price of the products, and higher quality products will allow a higher price gain per enhancement, but customers will not pay more for over-embellished goods. Besides, have the view of the customers is the successful point in this part.

These are four main sections of the showroom in the first and second rounds. These are the shoelace protector, the technology improvement, the customized flag add-on, and the upgraded performance insole. However, there are extra options in the second round that is the additional showroom options. This option includes the sections of the manufacturer’s warranty and the budget of the product launch event.

The following are going to describe two assessments round of the simulation. In round one, I click all the showroom sections because I want to earn more profits. But there is a mistake I made in this round, that is I do not notice the view of the customers also forget that customers may not pay for unnecessary expenses. As a result, this results in bad profits in round one. In the second round, I considered different perspectives and cared about the cost and benefit. Thus, I found that it is not necessary to select the customized flag add-on, which will influence customers are unwilling to pay. Because the cost of the section is low, but customers need to pay more than three percent.

However, the manufacturer warranty and the budget of the product launch event in the additional showroom options are necessary to select. Because of that, these will improve the 9

willingness of customers to pay. Then, I found that the material quality connected with the budget. If the material quality higher, the budget for the launch event must choose higher that will affect the final margin. Consequently, I choose 10,000 budgets for the product launch event and choose six months of the manufacturer’s warranty in the second round. To provide high-quality products and services to customers.

The second round’s screenshot of the showroom

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First round result

There are only basically sections in the first round, so profits are not more than the second round. Even though I consider the quantity will influence the production time. Thus, I only choose the quantity of 3,500 units, but I choose too many sections in other options. For instance, select all sections in the showroom. Therefore, this is results in the cost per unit is higher than the price per unit, which is more than 26.31.

This is the screenshot of the simulation results in the first round 10

However, if I have the opportunity to do the first round of the simulation again. In the first step, I will choose the quantity of more than 3,500 units with the same quality because sufficient quantity can control costs. In the second step, I will choose the same decision in the factory part. Making all the employees can provide the certain products so that could reduce the time to produce. Then the last step of the showroom I will choose sections of the technology improvement and the upgraded performance insole. Because the technology improvement is the option with the highest cost, but it can earn the most profit, and the upgraded performance insole is to spend the medium cost, but it can earn the second most profitable option. This decision not only can save costs but also can obtain most of the profits from customers.

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Second round result

There are more options in the second round of the simulation, so the profits are better than in the first round. I choose the quantity of 5,000 units and the same quality in this simulation. However, there is a different result to show that is I obtain the profit per unit in 25.10.

This is the screenshot of the simulation results in the second round

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Although other sections in each part will impact the result too. But the sufficient production quantity is the main point to affect the profit per unit. Compare with the following pictures can found that the principle of price is based on quantity.

(Their cost difference is eight dollars, but the difference in quantity is 1,500)

Changes in the second round have significant benefits. Whether in the simulation or the real world, additional options in the second round will be helpful in these two parts. There is a screenshot to show the profits after the change from the first round.

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Personal reflection: From my perspective, simulation is a wonderful choice to do the marketing test because this can make the company reduce risks of the actual operation and make students learning the physical situation. There are some experiences I learned from this simulation. Firstly, I learned the importance of the employees' training. There is indeed data to show the training employees is helpful to increase profits and reduce the time to produce products in this simulation. If I am the manager in the future, I will care more about this part. Secondly, used this simulation to learned the knowledge from the value chain analysis. Then understood every section are inseparability and will influence the profits. Lastly, a comprehensive understanding of what the role of the manager needs to do, then reduce the chance of making mistakes in the future.

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Reference List

Dent, B., Garcia Martinez, M., & Fearne, A., (2012). Dimensions of sustainable value chains: implications for value chain analysis. Supply Chain Management, 17(6), 575–581. https://doi.org/10.1108/13598541211269193

Guan, X., & Frenkel, S. (2019). How perceptions of training impact employee performance: Evidence from two Chinese manufacturing firms. Personnel Review, 48(1), 163–183. https://doi.org/10.1108/PR-05-2017-0141

Helo, P., & Holweg, M. (2014). Defining value chain architectures: Linking strategic value creation to operational supply chain design. International Journal of Production Economics, 147, 230–238. https://doi.org/10.1016/j.ijpe.2013.06.015

Normann, R., & Ramirez, R. (1993). From value chain to value constellation: designing interactive strategy. Harvard business review, 71(4), 65–77 https://europepmc.org/article/med/10127040#similar-articles

Sheehan, N. (2021). Strategy Simulation: Value Champion. Harvard Business Publishing Education. https://forio.com/app/harvard/value-champion/#/information

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