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    Session 05-Supply Chain Coordination and Use of Technology

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    Umair Hussain Khan
    This document discusses coordination challenges in supply chains and how technology can help address them. It describes the "bullwhip effect" where small demand changes are amplified as they move up the supply chain. This can lead to boom-bust cycles. Coordination obstacles include misaligned incentives, poor information sharing, and behavioral factors. Technologies like ERP, SCM, RFID can help with data capture, analysis, planning and coordination across the supply chain to smooth fluctuations and align partners. Standards like CPFR also promote collaborative forecasting, replenishment and reduce exceptions between companies.

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    Session 05-Supply Chain Coordination and Use of Technology

    Uploaded by

    Umair Hussain Khan
    175 views12 pages
    This document discusses coordination challenges in supply chains and how technology can help address them. It describes the "bullwhip effect" where small demand changes are amplified as they move up the supply chain. This can lead to boom-bust cycles. Coordination obstacles include misaligned incentives, poor information sharing, and behavioral factors. Technologies like ERP, SCM, RFID can help with data capture, analysis, planning and coordination across the supply chain to smooth fluctuations and align partners. Standards like CPFR also promote collaborative forecasting, replenishment and reduce exceptions between companies.

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    This document discusses coordination challenges in supply chains and how technology can help address them. It describes the "bullwhip effect" where small demand changes are amplified as they move up the supply chain. This can lead to boom-bust cycles. Coordination obstacles include misaligned incentives, poor information sharing, and behavioral factors. Technologies like ERP, SCM, RFID can help with data capture, analysis, planning and coordination across the supply chain to smooth fluctuations and align partners. Standards like CPFR also promote collaborative forecasting, replenishment and reduce exceptions between companies.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    175 views12 pages

    Session 05-Supply Chain Coordination and Use of Technology

    Uploaded by

    Umair Hussain Khan
    This document discusses coordination challenges in supply chains and how technology can help address them. It describes the "bullwhip effect" where small demand changes are amplified as they move up the supply chain. This can lead to boom-bust cycles. Coordination obstacles include misaligned incentives, poor information sharing, and behavioral factors. Technologies like ERP, SCM, RFID can help with data capture, analysis, planning and coordination across the supply chain to smooth fluctuations and align partners. Standards like CPFR also promote collaborative forecasting, replenishment and reduce exceptions between companies.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 12

    Supply Chain

    Coordination
    and Use of Technology
    Amir Manzoor
    Management Sciences
    Department

    The Bullwhip Effect


    Small changes in product demand by the consumer
    at the front of the supply chain translate into wider
    and wider swings in demand experienced by
    companies further back in the supply chain.
    Companies at different stages in the supply chain
    come to have very different pictures of market
    demand and the result is a breakdown in supply
    chain coordination.
    Companies behave in ways that at first create
    product shortages and then lead to an excess
    supply of products.

    Boom-to-bust business
    cycle
    The cycle starts when strong market demand creates a shortage of
    product.
    Distributors and manufacturers steadily increase their inventories
    and production rates in response to the demand.
    At some point either demand changes or the supply of product
    exceeds the demand level.
    Distributors and manufacturers do not at first realize that supply
    exceeds demand and they continue building the supply.
    Finally the glut of product is so large that everyone realizes there is
    too much.
    Manufacturers shut down plants and lay off workers.
    Distributors are stuck with inventories that decrease in value and
    can take years to work down.
    A good example is telecommunication industry.

    Coordination in the
    Supply Chain
    Obstacles in Coordination
    Incentive Obstacles
    Information Processing Obstacles
    Operational Obstacles
    Pricing Obstacles
    Behavioral Obstacles

    Coordination in the Supply


    Chain (contd.)
    Managerial Levers to achieve
    coordination
    Aligning goals and incentives
    Improving information accuracy
    Improving operational performance
    Designing pricing strategies to stabilize
    orders
    Building strategic partnerships and trust

    Flow of Inventory through


    a Synchronized Supply Chain

    Collaborative Planning, Forecasting,


    and Replenishment (CFPR)

    To facilitate the coordination that is needed in supply chains, an


    industry group known as the Voluntary Interindustry Commerce
    Standards (VICS) group has set up a committee to investigate
    collaborative planning, forecasting, and replenishment issues
    (CPFR).
    This committee documents best practices for CPFR and creates
    guidelines to follow for CPFR.
    The CPFR process is divided into the three activities of planning,
    forecasting, and replenishment. Within each activity there are
    several steps:
    Collaborative Planning
    Negotiate a front-end agreement on responsibilities of
    collaborating partners
    Build a joint business plan
    Collaborative Forecasting
    Create sales forecasts, identify and resolve any exceptions or
    differences between companies
    Collaborative Replenishment
    Create order forecasts, identify and resolve exceptions between

    Information Systems that Support the Supply Chain


    Data Capture and Data Communications
    The Internet
    Broadband
    EDI
    XML

    Data Storage and Retrieval


    Database technology

    Data Manipulation and Reporting


    Enterprise Resource Planning (ERP) (gather data from across multiple functions in a
    company)
    Procurement Systems (focus on the procurement activities)
    Advanced Planning and Scheduling (analytical applications whose purpose is to assess plant
    capacity, material availability, and customer demand)
    Transportation Planning Systems (calculate what quantity of materials should be brought to
    what locations at what times)
    Demand Planning (use special techniques and algorithms to help a company forecast their
    demand)
    Customer Relation Management (CRM) and Sales Force Automation (SFA) (automate many of
    the tasks related to servicing existing customers and finding new customers)
    Supply Chain Management (SCM)
    Inventory Management Systems
    Manufacturing Execution Systems (MES) (carrying out the production activities in a factory)
    Transportation Scheduling Systems (less analytical and more focused on daily operational
    issues)
    Warehouse Management Systems (WMS) (support daily warehouse operations)

    Assessing Technology and


    System Needs
    Know your goal
    Do not let the complexity or the
    details of any technology or system
    be a distraction from this basic truth.

    E-Business and Supply Chain


    Integration
    Four key impacts of E-business on
    supply chain integration
    Information integration
    Planning and Synchronization
    Workflow coordination
    New business model

    Case Study

    Integrated Logistics
    Management System

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