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The document provides a case study about a startup 3D printing company called 3DMall that is experiencing rapid growth. It is facing challenges around strategy implementation and alignment between its goals and those of its manufacturer and suppliers. Multiple choice questions assess the reader's understanding of 3DMall's supply chain maturity, key misalignments, and potential actions to address issues.

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48 views4 pages

CSCP

The document provides a case study about a startup 3D printing company called 3DMall that is experiencing rapid growth. It is facing challenges around strategy implementation and alignment between its goals and those of its manufacturer and suppliers. Multiple choice questions assess the reader's understanding of 3DMall's supply chain maturity, key misalignments, and potential actions to address issues.

Uploaded by

raanasadik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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APICS CSCP Learning System

Module 1, Activity 1
Supply Chain Strategy Case Study: 3DMall Growth Pains
Participant Directions
This activity presents a case study of a 3D printer and printer cartridge company called
3DMall (fictitious). 3DMall has a patent on proprietary 3D printing technology and has
decided to sell these novel user-friendly 3D printers and cartridges to consumers. The
unique benefit to using 3DMall printers is that consumers do not have to design their own
products by using complex scanning and design programs which require a certain level of
technological expertise. Instead, they can choose to immediately print ready-made designs
they find on 3DMall’s online store.

The designs in 3DMall’s store are provided by third-party organizations who submit these
to 3DMall for sale. 3DMall hosts these designs, and consumers can browse and purchase
them via the app or 3DMall’s store website. When a consumer purchases a design through
the 3DMall store, they are purchasing a one-time use design from a third-party and using it
to print the item immediately using their own printer. 3DMall receives a percentage of
every purchase made in the store. Once a consumer has purchased a design and uses it, the
design automatically deletes itself from their printer.

• Read the case study below and answer the multiple choice questions.
• At the end of the activity, the instructor will review the steps of the activity and
share the correct answers for each question.
• This case study will be revisited in later activities.

Case Study Information:


3DMall is a startup private organization with some large investors. They used this money to
fund the initial in-house research and development and design, build and staff a headquarters
and a number of regional DCs with light manufacturing capability, and pay for outsourced
manufacturing, transportation, and supply. They also leased a cloud-based ERP system early on
and spent some time developing a less hierarchical organizational structure called a network
structure that focuses more on end-to-end process efficiency. Since all of the employees are
new, human resources staffed key roles with persons who had experience using this software
system and were comfortable working in a more empowered, collegiate environment.

The organization’s founders also felt that part of their mission needed to be to sell sustainable
products to support their environmental and a fair trade priorities. To this end, the initial
research and development team used “design for the environment” methodology by involving
many internal stakeholders in the design process. They also developed an ethics and
sustainability policy for manufacturers and suppliers. The manufacturer and suppliers agreed

© 2023 APICS 1-1 Version 5.1, 2023 Edition


All rights reserved
APICS CSCP Learning System

to these policies in the initial contract but at this time it is unclear whether these policies are
being put in practice, especially as the organization has started to grow rapidly and the
manufacturer added its own subcontractors to increase capacity.

Growth in sales in the first three years has been significant. The product and the marketplace
are gaining users but according to market research, growth would be even greater if there were
more designs in the online marketplace. However, too many firms are still skittish about losing
traditional sales to this new method they are participating in, and others are also upset that
start-up firms have sprung up using this medium to compete with them directly.

In general, the independent retail franchises are growing steadily but some did close in part
due to overambitious inventory ordering relative to sales. Revenue in the first year was US$60
million but they had total expenses of US$80 million for a net loss of US$20 million. Revenue
grew by 20 percent in the next year to US$72 million and due to some one-time startup
expenses, total expenses fell to US$70 million, for a first-time net profit of US$2 million. The
five-year strategic forecast predicts that revenue will continue to grow by 20 percent per year
for each of the next five years. However, further investments will be needed to increase
capacity and most of their expenses are variable rather than fixed so total expenses are
expected to rise each year as well for an increase in net profits of only 10 percent per year (i.e.,
US$2.2 million expected net profit in the third year of operations).

Question 1 of 5:
What is this organization’s stage of supply chain maturity?

a) Stage 1: Multiple Dysfunction


b) Stage 2: Semifunctional Enterprise
c) Stage 3: Integrated Enterprise
d) Stage 4: Extended Enterprise

Question 2 of 5:
Which provides the most important red flag that there are misalignments or gaps in the
organization’s strategy?

a) The manufacturer started using subcontractors to increase capacity.


b) It is unclear whether their manufacturer and suppliers are following the ethics and
sustainability policies.
c) They had a net loss of US$20 million in the first year.
d) Revenue is growing at 20 percent but net profit is only growing at 10 percent.

© 2023 APICS 1-2 Version 5.1, 2023 Edition


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APICS CSCP Learning System

Question 3 of 5:
Which is the best suggestion for resolving this major misalignment or gap in strategy?

a) Increase the proportion of costs that are variable relative to those that are fixed.
b) Build and own a manufacturing plant in the U.S. or the EU.
c) Get the manufacturer to develop better economies of scale or switch providers.
d) Increase the percentage fee charged to third party design providers to improve profits.

Question 4 of 5:
The organization decides to become a minority investor in the Thailand manufacturing
plant, providing funds for it to expand capacity and gaining significant cost savings from the
improved economies of scale as well as better prices due to the closer business
relationship. This dramatically reduces the organization’s projected total expenses over the
next five years. However, the expanded plant will have excess capacity for the next two
years since it was built to have sufficient capacity for the final three years of the strategic
plan.

During this first two years of this new relationship it costs US$100,000 to produce a batch
of 800 printer motors. A 3D printer competitor wants to outsource its motor purchases to
you, and offers to buy all available excess capacity for US$100 per motor. Doing so would
increase plant wear and tear and increase other costs for materials and so on by US$25 per
motor sold to the competitor. What should the manufacturer and organization do?

a) Accept the offer as is.


b) Reject the offer because it would be helping a competitor.
c) Reject the offer because you would be selling at less than cost.
d) Accept the offer but only if they pay US$150 per motor or more.

Question 5 of 5:
The organization conducts a SWOT analysis to determine what else it might be able to do to
further increase revenue growth or profitability. Which observation from that analysis
should be given the highest priority in terms of time and funding?

a) A weakness in the organization’s open organizational structure and corresponding open


office theme in its headquarters makes some employees get less done due to the lack of
cubicles.
b) Opportunity to market to potential third-party print design providers that this is just
another sales channel with very low costs and if not acted on will become a threat.
c) Threat of existing 3D printer competitor copying the organization’s business model in
three to five years but with additional colors of materials that can be printed.
d) Strength in high difficulty of refilling used printer cartridges or getting third party
cartridges to work in the organization’s printers.

© 2023 APICS 1-3 Version 5.1, 2023 Edition


All rights reserved
APICS CSCP Learning System

Activity Conclusion:
This activity shows that organizations need more than a great strategy to succeed. They need to
implement that strategy in the most effective manner possible if they are to continue growing
and satisfying investors.

© 2023 APICS 1-4 Version 5.1, 2023 Edition


All rights reserved

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