MODULE 1

E-SUPPLY CHAIN MANAGEMENT SIMULATION

Course : ISYE 6055– E-Supply Chain Management
Year : 2018
 AGENDA

• Practicum = 80 minutes
• Quiz = 10 minutes
• Weekly Reports = 10 minutes
 OBJECTIVES OF MODULE 1

• To determine the overview of Supply Chain

Management.
• To determine the role of each entity in the Supply
Chain Management.
• To determine the concept of e-Supply Chain
Management.
• To determine the definition of Bullwhip Effect in the
Supply Chain Management.
 WHAT IS SUPPLY CHAIN MANAGEMENT?

Supply Chain Management is defined as

encompassing all activities associated with the flow and
transformation of goods from the raw materials stage
(extraction), through to the end user, as well as the
associated information flows. Material and information
flow both up and down the supply chain (Ross, 2016).
 THE ROLE OF EACH ENTITY IN THE
SUPPLY CHAIN MANAGEMENT

There are five main roles in Supply Chain Management:

1. Supplier
2. Manufacturing
3. Distributor Supplier
4. Retailer
5. Customer
Manufacturing
Customer

Retailer Distributor
 E-SUPPLY CHAIN MANAGEMENT CONCEPT

E-Supply Chain Management is a tactical and strategic

management philosophy that seeks to network the
collective productive capacities and resources of
intersecting supply channel systems through the
application of internet technologies in the search for
innovative solutions and the synchronization of channel
capabilities dedicated to creation of unique,
individualized sources of customer value.
E-SUPPLY CHAIN MANAGEMENT
CONCEPT (cont.)
 E-SUPPLY CHAIN MANAGEMENT
CONCEPT SIMULATION
1. Monte Carlo Simulation
2. BeerGame (Bullwhip Effect Simulation)
a. Bullwhip effect definition

The Bullwhip Effect is an empirical phenomenon where

small fluctuations in downstream demand (e.g., retail
demand) result in much larger fluctuations in upstream
demand (e.g., production) in supply networks
 E-SUPPLY CHAIN MANAGEMENT
CONCEPT SIMULATION
Four broad causes of the Bullwhip Effect:

• Demand forecast errors caused by delayed and

distorted signals from downstream customers

• Burstiness in local demand caused by batching

orders, shipments, or production

• Forward buying or delayed demand resulting

from price fluctuations like promotional pricing

• Downstream customers placing fictional orders

in order to get a larger share of inventory during
the rationing of scarce supplies.
E-SUPPLY CHAIN MANAGEMENT
CONCEPT SIMULATION
 Grafik Jumlah Stock
400

300

200

100
Ending Inventory

-100

-200

-300 Week

Manufacturer Distributor Wholesaler Retailer

THANK YOU ☺