Supply Chain Resilience in the Telecom Industry

This case study attempts to cover an important topic that we do not have time to discuss in

class: risk management in supply chains. Based on the case and the data provided, answer the

following questions. When answering, you should: a$)$ show how you calculate the values in

detail and with logic, b$)$ make any assumptions that you think are necessary.

$1.$ Given $6$ examples of risks that can lead to supply chain disruption.

$2.$ Given $6$ examples of consequences of disruption.

$3.$ Focusing on the first five components $($ABN$002,$ ABX$001,$ BBR$474,$ BLY$283,$ BNT$172),$ map

TelCo$$s supply chain with the following steps: Components, Configurations and Markets.

$4.$ Considering the usage of the different components across the different CAS

technology configurations and the type and number of configurations currently

deployed in each market, evaluate the number of customers affected by a disruption

of each particular component.

$5.$ For each component, estimate the demand rate from the current operations $($using

the MTTF metric if the demand rate has not been measured$)$ and from future

project development. Based on the average inventory levels, estimate for each

component the $$Time to Survive $($TTS$),$ i$.$e$.,$ how long TelCo can continue its current

operations and planned project development without disruption even if the

component vendor experiences a shortage. $($Hint: you may want to use Little$$s Law$)$

$6.$ Try to evaluate the impact of shortage for all items in Table $1.$ Please use at least three

factors to measure the impact, including Criticality in Table $2.$

$7.$ Based on your results in Q$6,$ identify three items that have the greatest impact of shortage.

Among the identified items, pick the one with the highest unit price $($denoted as Item H$)$

and the one with the lowest unit price $($denoted as Item L$).$ For both items, please explain

why the company does not carry more inventory, respectively.

$8.$ Focusing on Item L$,$ suppose its Time to Recover $($TTR$)$ is $9$ weeks. Calculate the length of

risk exposure upon disruption $($denoted as LRE$)$ in weeks. Assuming the annual inventory

holding cost is $20\%$ of the unit item cost, what would be additional cost of holding LRE

weeks of inventory for Item L$?$

$9.$ Continuing with Item L$,$ let$$s try to estimate the benefit of holding LRE weeks of inventory

for Item L$,$ based on the following assumptions:

a$.$ New projects will be delayed upon disruption.

b$.$ Upon disruption, any unfulfilled demand will carry over to the next week.

c$.$ Once the firm recovers from disruption, it can immediately satisfy all unfulfilled

demand during the disruption.

d$.$ Average revenue per user $($ARPU$)$ is $$200/$user$/$week$.$

e$.$ Make any additional assumptions that are necessary for your estimation.

$10.$ What can you learn from the calculations above? In particular, recall that we mainly focus

on minimizing cost in this course, does it make a supply chain more vulnerable to

disruptions $($Explain with at least three examples$)?$

$11.$ Traditional methods to identify risks in supply chains would be: a$)$ identify sources of risks,

b$)$ identify the causes of the risks, c$)$ estimate the likelihood, d$)$ estimate the financial

impact, e$)$ calculate the expected impact $($likelihood multiplied by the impact$).$ Compared

with traditional methods, what advantages does the method used in this case have?

$12.$ In general, are supply chains more prone to disruption nowadays? Explain with examples.