Bull whip effect 3

Performance metrics include product quality data lead

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Unformatted text preview: on often shared in a supply chain include performance metrics and capacity. Performance metrics include product quality data, lead times, queuing delays at workstations and service performance. By sharing this type of information, the supply chain can identify the bottlenecks of the chain and improve the overall performance. Chrysler, for example, shares the quality and on-time delivery performance data of all its suppliers across the supply chain. Each supplier can log on to the system to check its performance and its relative standing among the suppliers in the same category. In the same spirit, supply chain partners can jointly develop a performance metric that measures the performance of the entire supply chain. For example, they can measure the sojourn time of an order in the supply chain tracking how much time each order spends at each workstation and stocking point. This metric will provide valuable information to improve the delivery time performance of the overall chain. Capacity information can contribute to mitigating potential shortage gaming behavior, thereby countering a potential source of the bullwhip effect. By sharing 9 planned capacity information with the downstream partners well in advance, supply chain partners can coordinate and prepare against possible shortages. Semiconductor foundries, for example, routinely share their capacity status with the buyers to weather through peaks and valleys of volatile demand. The extent of information sharing in a supply chain is expanding. A recent study on the PC industry is a case in point [24]. The study identified some advanced form of information sharing whereby a PC manufacturer shares with its supplier its own demand forecasts, as well as the demand forecasts from its customers Figure 2 shows how PC supply chain partners are sharing information with their partners. Figure 2: Information Sharing in the PC Supply Chain 3. Models of Information Sharing The system model of information sharing is fast evolving over time as the internet emerges as a new cost-effective platform. By the system model we mean the mode of business and its supporting syste...
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This note was uploaded on 11/06/2013 for the course ISYE 6202 taught by Professor Staff during the Fall '08 term at Georgia Tech.

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