Coyle_Chapter_7__PowerPoint_Slides

Coyle_Chapter_7__PowerPoint_Slides - Chapter 7 Demand...

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Chapter 7 Demand Management Learning Objectives n After reading this chapter, you should be able to do the following: n Understand the critical importance of outbound-to-customer logistics systems. n Appreciate the growing need for effective demand management as part of an organization’s overall logistics and supply chain expertise.
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Learning Objectives (cont.) n Know the types of forecasts that might be needed, and understand how collaboration among trading partners will help the overall forecasting and demand management processes. n Understand the basic principles underlying the sales and operations planning process. n Identify the key steps in the order fulfillment process and appreciate the various channel structures that might be used in the fulfillment process.
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Many organizations place significant emphasis on outbound-to- customer logistics systems n Chapter focus: ¨ demand management ¨ forecasting ¨ Sales and Operations Planning (S&OP) process ¨ collaborative forecasting approaches ¨ fulfillment process and the processes and methods
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Demand Management ¨ The ability of firms throughout the supply chain to collaborate on activities related to the flow of product, services, information, and capital. ¨ REASON - Create greater value to your customers ¨ Problems in achieving goal: n Lack of coordination between departments - silo mentality n Too much emphasis on forecasts of demand, with less attention on the collaborative efforts and the strategic and operational plans n Demand information is used more for tactical and operational than for strategic purposes - Primary emphasis should be on understanding likely demand as it occurs.
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FORECASTING: A MAJOR COMPONENT OF DEMAND MANAGEMENT Try to predict the amount that will be purchased, where it will be purchased, and when it will be purchased. What previous concept(s) or logistic definition does this sound like? Major common thread of all forecasting is that it will be WRONG !!! Key is to minimize the error between actual demand and forecast demand Forecasts used by Marketing and Operations to set goals and develop execution strategies. SOP – Sales and Operating Plan Two Types of Demand: Independent and Dependent
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INDEPENDENT DEMAND – demand for the primary item DEPENDENT DEMAND – directly influenced by the demand for the INDEPENDENT item. HOW DOES THIS AFFECT THE ENTIRE SUPPLY CHAIN ????
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Two Methods : External Balancing - Price and Lead Time Attempt to change manner in which customer orders to balance supply-demand gap Internal Balancing – Inventory and Production Flexibility Use production flexibility in attempt to balance supply and demand . Overtime for greater production or cut back in overtime to reduce gap. TRADE-OFF – Production Changeover costs and safety stock
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This note was uploaded on 06/01/2009 for the course SCM 301 taught by Professor Gardner,williams during the Fall '08 term at Pennsylvania State University, University Park.

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Coyle_Chapter_7__PowerPoint_Slides - Chapter 7 Demand...

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