311_session_23_supply_chain_bullwhip

311_session_23_supply_chain_bullwhip - Maximize profits of...

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1 Supply Chain Coordination BUAD311 Session 23
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2 Objectives How information and incentives impact the performance of a supply chain? Supply Chain Coordination Vertical Integration Bullwhip Effect
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3 Manufacturers Wholesale  Distributors Suppliers Customers  Information Flow Goods  Flow Retailers A Simplified Supply Chain Revenue Flow
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4 Supply Chain Management (SCM) Supply Chain Management (SCM) concerns the coordination and optimization of all supply, manufacturing, distribution and logistics activities from raw materials to finished goods to the customer. SCM strives to use the supply chain as a mutually beneficial competitive tool.
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5 Multiple Perspectives Raw Materials Suppliers Component Manufacturer Systems Integrator Assembler Integrated Manufacturer Logistics Provider Distributor Customer
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6 SCM Goals
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Unformatted text preview: Maximize profits of all supply chain partners How to do it? Get the right product, in the right quantity, to the right customer at the right time with minimum cost, proper documentation and financial reconciliation Difficulty: Each partner has its own goal 7 Bullwhip Variance of order quantity increases as you go up the supply chain. Product shortages or overstocks that increase in severity as one moves up the supply chain and away from the retail customer. Even for a product whose demand is stable. Result in huge supply chain 8 Causes Demand forecast updating Order batching Price fluctuation Rationing and shortage gaming 9 How to solve it? Improving information sharing Improving channel alignment Improving operational efficiency...
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311_session_23_supply_chain_bullwhip - Maximize profits of...

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