April 18, 2013 Individual Supply Chain Ai!n"en# order varia%ili#y* ,xhibit 1: Chain 2 po#ed #he hi!he# #o#al upply 'hain 'o# due #o i# hi!h 'o# in %o#h %a'klo! and inven#ory* Chain 8 pulled o(( #he lo)e# upply 'hain 'o# %y "ain#ainin! avera!e %a'klo! and inven#ory 'o# %elo) @300k* . -hich of the demand management techniques co)ered in the lecture slides would #ou choose to impro)e #our suppl# chain? -here possible, use data to illustrate how this technique would ha)e affected the game. Aa'k o( in(or"a#ion harin!, lead #i"e, %a#'h orderin!, and hor#a!e !a"in! 'on#ri%u#ed #o #he %ull)hip e((e'# in our roo# %eer upply 'hain i"ula#ion* <e"and "ana!e"en# B no#a%ly 'o""uni'a#in! de"and and in(luen'in! de"and B )ould have i"proved our upply 'hain* Alo, proa'#ive 'olla%ora#ive (ore'a#in! and replenih"en# i 'ru'ial* $he da#a reveal a 'lear #rend0 keepin! %o#h inven#ory and %a'klo! 'o# lo) i 'ri#i'al (or "ini"iCin! #o#al 'o# (or #he upply 'hain ne#)ork* A'hievin! 'o# avin! )i#hou# a'ri(i'in! 'u#o"er ervi'e i i"por#an#, ho)ever* Yuko Ueki OPIM 5110
April 18, 2013 Individual Supply Chain Ai!n"en# One #e'hniDue #o i"prove #he upply 'hain %y "ini"iCin! #he %ull)hip e((e'# i de"and "ana!e"en# and in(or"a#ion harin!* Uin! an e3ponen#ial "oo#hin! para"e#er, E or F 6 1& E, )e 'an ho) ho) re#ailer hare de"and in(or"a#ion dire'#ly )i#h i# upplier, #he )holealer and di#ri%u#or* $hi 'on'ep# lie a# #he 'ore o( vendor "ana!ed inven#ory -GMI/* .hen re#ailer hare de"and in(or"a#ion dire'#ly )i#h upplier, #he lead&#i"e, "oo#hin! 'oe((i'ien# -E, or e3ponen#ial (ore'a#in!/ and de"and 'orrela#ion -H/ 'oe((i'ien# o( ea'h #a!e )ill #ill 'aue in(or"a#ion di#or#ion, %u# i# )ill %e "ini"iCed* In(or"a#ion Bharin! in a upply 'hain )i#h 3&)eek lead #i"e i e3pe'#ed #o de'reae #he 'urren# %ull)hip %y 547* 1 !able *: .inimi/ation of 0-, through information sharing 2e#ailer .holealer <i#ri%u#or >a'#ory +., )i#hou# in(or"a#ion harin! 3*58 5:*9: 104*84 2:0*12 +., )i#h in(or"a#ion harin! 3*58 23*82 :8*3 103*25 GMI %uild on #he pra'#i'e o( 'olla%ora#ive plannin! (ore'a#in! and replenih"en#* Supplier and re#ailer !oal are ali!ned* $he po#en#ial dra)%a'k i #ha# #hi #a'#i' lean #o)ard a "ore 'en#raliCed 'o""and&and&'on#rol #ru'#ure* >inally, an in#ere#in! "en#ion, #here "ay %e a #rade&o(( %e#)een %ull)hip avoidan'e and 'u#o"er ervi'e* $he op#i"al "oo#hin!, F, o''ur a# #he !olden ra#io 0*818 )here %ull)hip plu ne# inven#ory a"pli(i'a#ion eDual 3*818* 2 *. !hin1ing of #our experience in the game, what effect do #ou thin1 communication has on suppl# chains? Co""uni'a#ion ha a i!ni(i'an# i"pa'# on #he upply 'hain, in #er" o( i# e((e'# on #he a"oun# o( inven#ory in a upply 'hain* $he a'#or in our i"ula#ion )ere no# allo)ed #o 'o""uni'a#e )i#h ea'h o#her* $he )holealer, di#ri%u#or, and (a'#ory only had a''e #o da#a (ro" #he a'#or dire'#ly %elo) #he"* ,a'h #a!e (or" #heir o)n de"and (ore'a# independen#ly %aed on in'reain!ly di#or#ed da#a* A a 'oneDuen'e, #hi 'rea#e )ide )in! in inven#ory, e3'e inven#ory, and )a#e* Io)ever, #he a''ura'y o( #he in(or"a#ion 'o""uni'a#ed i 'ri#i'al* Joie in #he ne#)ork due #o (lu'#ua#in! e3pe'#a#ion, (ore'a# error and un'er#ain (a'#or 'rea#e in(or"a#ion di#or#ion, )hi'h (ur#her e3a!!era#e #he %ull)hip e((e'#* .hile y#e"&)ide in(or"a#ion harin! 'anno# eli"ina#e #he %ull)hip e((e'#, i# 'an 'er#ainly redu'e i#* 1 Uin! #he (or"ula (ro" K* Kia, L* $akahahi, and K* .an!* MA #udy on #he i"pa'# o( un'er#ain (a'#or on in(or"a#ion di#or#ion in upply 'hainN Production Planning & Control: The Management of Operations* -Kan 2005/, pp 2& 11* 2 S*M* <iney, I* >arayn, M*2* Aa"%re'h#, <*2* $o)ill, and .*Gan de Gelde* Dampening Variability by sing !moothing "eplenishment "ules* 2e#rieved (ro" h##p0OOliria*kuleuven*%eO%i##rea"O123:58489O122828O1O0502*pd( Yuko Ueki OPIM 5110
April 18, 2013 Individual Supply Chain Ai!n"en# +. -hat barriers pre)ent communication across suppl# chains? -h# do #ou thin1 efforts to communicate sometimes fail? ,#a%lihin! #ru# i a %arrier #o 'o""uni'a#ion* A la'k o( #ru# "ay per"ea#e ne#)ork )here par#ner have no# (ully e#a%lihed rela#ionhip, i"pedin! 'o""uni'a#ion* Co""uni'a#ion %arrier are alo an inheren# par# o( de'en#raliCed y#e" )here independen# par#i'ipan# alon! #he upply 'hain "ay have 'o"pe#in! in#ere#* In addi#ion #o diver!en# !oal, a la'k o( #ranparen'y, #a#u Duo, and #radi#ional hierar'hy are alo %arrier #o 'o""uni'a#ion* In #oday? in'reain!ly %orderle )orld, 'o""uni'a#ion i "ore i"por#an# #han ever* Io)ever, )i#h !lo%aliCed upply 'hain 'onne'#in! "ore divere (ir" #han ever, i# alo "ean #ha# lan!ua!e and 'ul#ural di((eren'e are #hro)n in#o an e3pandin! "i3 o( 'o""uni'a#ion %arrier* An e((i'ien# and e((e'#ive upply 'hain depend on a 'o""uni'a#ion y#e" #ha# (o#er #ru#, repe'# and 'olle'#ive e((or#* $he #ru'#ure o( #he upply 'hain hould aid in developin! rela#ionhip #ha# en'oura!e 'o""uni'a#ion %e#)een par#i'ipan#* In #hi ene, environ"en# "ay play a key role in 'o""uni'a#ion* Jo# kno)in! one? audien'e i one 'ulpri# o( our (ailed e((or# #o 'o""uni'a#e* All #hee varia%le B #ryin! #o under#and )ha# #he o#her )an#, )ha# #hey kno), ho) #hey #hink, and #heir a##i#ude #o)ard you B a((e'# ho) you 'an (ra"e your "ea!e, i( one i even 'apa%le o( doin! o* In a 'o"pe#i#ive )orld, "any a'#or are un#ru#in! and #hi alo preven# in(or"a#ion harin! and 'o""uni'a#ion* ,ven (ear o( li#i!a#ion "ay ha"per e((or# #o 'o""uni'a#e* >inally, 'o!ni#ive %iae 'an preven# 'o""uni'a#ion, in #er" o( %o#h ho) )e 'onvey and a''ep# in(or"a#ion*