2.

Discuss with any of the supply chain manager/ executive, and find out how they avoid creation
of phantom (false) demands by downstream channel partners. What are these difficulties in doing
so
!ns. "hey can avoid creation of phantom (false) demands by downstream channel partners as
following#$
1. "he downstream channel pattern has implications for efficiency on various levels. !t the
macro level, it induces poor service levels, inefficiencies in production and production
costs, scheduling, sourcing, distribution, revenue generation and revenue reali%ation.

2. !t the operational level, it generates more inventories and &eeps it in the most
inappropriate place to meet a specified service level. !t a performance level it can reduce
the velocity of cash, destroy potential revenue, and significantly erode revenue reali%ation
through price discounts. 't can potentially dilute competitive strategy and position and
therefore can be a (strategy buster).
3. Order batching $ larger orders result in more variance. *rder batching occurs in an
effort to reduce ordering costs, to ta&e advantage of transportation economics such as full
truc& load economies, and to benefit from sales incentives. +romotions often result in
forward buying to benefit more from the lower prices.
4. Lead time: ,ong lead time is a potential driver of the downstream channel patterns.
"oyota experience lead time problems with deliveries from their suppliers. 't is possible
that long lead times add to the other significant problems - that of struggling to reduce
cycle time and that of balancing inventory levels.
5. Visibility: ! lac& of supply chain visibility leads to the downstream channel patterns.
'ntegration of internal information systems is indicated as a significant problem. "his is
in line with the ac&nowledgement of the problem of dated technology. ,in&ed to this is
the problem of integrating technology with suppliers and customers.
6. Relationships and coordination: .ood relationships and coordination are important for
efficiency in supply chain and a lac& thereof can lead to the bullwhip effect. +roblems
with trusting some suppliers and customers are indicated as significant problems. "he
relationship with certain customers is also a problem.
7. !sh in"entory strategy: ! push strategy is used when products are manufactured in
anticipation of demand and production is based on long$term forecasting. "he real
demand is therefore, uncertain. +ush$based supply chains are associated with high
inventory levels and high manufacturing and transportation costs, due to the need to
respond /uic&ly to changes in demand.
Difficulties in doing this are as follows#$
1. #emand $orecasting: Downstream channel patterns appear when ordering is based on
forecasting and not on real customer demand. 0eing dependent on forecasting is another
significant problem for "oyota. !s a possible conse/uence of demand forecasting,
customer orders to update according to real mar&et demand. 1luctuating repair orders put
"oyotas) capacity under pressure and they battle to balance their inventory. !s a result of
cancellations of orders "oyotas have excessive and slow$moving inventory.
2. O"ertime e%penses and increase ra& material costs: 1or extra and changing mats
during this incident had increased overtime expenses and cost of raw material.
3. Lengthened lead time: "oyota have to redesign all their manufacturing which eventually
lengthened their lead time. Wor&ers have to do different 2ob which also the reason for
lengthened lead time.
4. "hese last$mentioned three problems are experienced only with a fraction of the suppliers
and customers. (!dvanced communication about mar&et demand), (too dependent on the
business of a particular customer) and (little or no assistance from customers in
complying with their customers) re/uirements). "hese problems tend to point towards
signs of a silo mind$set in automotive supply chains, where the different parties are
mainly interested in their own interests and the benefits they stand to gain. "his &ind of
behavior creates various problems such as antagonism among parties in the supply chain3
not receiving any feedbac& on the conse/uences of one)s own reaction on other parties in
the supply chain3 a lac& of trust between the parties3 and duplication of effort.
5. 'nnecessary ad(!sted capacity.

6. )ns!$$icient and e%cess capacities.