Upload
viet-pham
View
222
Download
0
Embed Size (px)
DESCRIPTION
This is for supply chain course.
Citation preview
CREATING THE RESPONSIVE SUPPLY CHAIN
Lesson 1: Agility
Sense and Respond
Sense
Respond
Agility
Demand is supported by deploying inventory in anticipation of projected sales levels and location
OrderAnticipatory
Forecast
Actual Demand
Inventory Deployment
Inventory Replenishment or
Reclamation
When and How Much to Order?• Min-Max, Visual Review, Weeks of Supply• Distribution Resources Planning (DRP)
Anticipatory Fulfillment
Reduce uncertainty by managing demand and order cycle time variance
OrderCollaborative
Plan
Actual Demand
Small Inventory Deployment
Flexible, Rapid Response
Synchronization of activities through shared information Process reengineering Supplier partnerships/delivery lead time and variance reduction, quality improvement Reduce process and network complexity Performance cycle acceleration and postponement Use appropriate metrics
Lean Fulfillment – “Containing little fat”
Eliminate uncertainty by postponing form and/or time and place utility untilorder received and then rapidly respond when order is received.
CapacityCollaborative
Plan
Actual Demand
Flexible, Rapid Response
Agile Fulfillment – “Nimble”
• Customer Focus vs. Product Focus• Cross-functional and cross-organizational process
integration• Leveraging relationships• Information visibility
AGILE
LEAN
High
Low
Low High
Volume per variant
Varie
ty/V
aria
bilit
y
Source: http://www.martin-christopher.info/resources/powerpoints
AGILE
LEAN
High
Low
Low High
Volume per variant
Varie
ty/V
aria
bilit
y
“Lean” works best inhigh volume, lowvariety and predictableenvironments.
“Agility” is needed inless predictableenvironments wherethe demand for varietyis high.
Source: http://www.martin-christopher.info/resources/powerpoints
Functional Products
Innovative Products
Lean Mgt Match Mismatch
Agile Mgt Mismatch Match
Matching a Supply Chain with Products
Functional Innovative
Aspects of Demand Predictable Demand Unpredictable Demand
Product life cycle > 2 yrs < 1 yr
Contribution margin 5 – 20 % 20 – 60 %
Product variety Low (10 – 20 variants/category) High (many variants/category)
Average forecast error 10% 40 – 100%
Average stockout rate 1 – 2% 10 – 40%
Average end-of-season markdown
0% 10-25%
Leadtime for MTO products
6 – 12 months 1 – 2 days
Key Product & Demand Characteristics
Time
Do
llar
s
0
Profits
Sales
IntroductoryStage
GrowthStage
MaturityStage
DeclineStage
AGILE LEAN LEAN
Stages of the Product Life Cycle (PLC)
AGILE
Sense and Respond
Sense
Respond
Agility
Why didn’t you produce enough?
I better get to work since
we will probably
have a big order in June
With
out D
eman
dIn
form
ation
With
Dem
and
Info
rmati
onIn June
In May
Sales are Up!
May
Big Order!
June
Supply Chain Visibility Types (Sensing)
Source: Williams, B.D., Roh, J., Tokar, T., Swink, M. 2013. “Leveraging Supply Chain Visibility for Responsiveness: The Moderating Role of Internal Integration” Journal of Operations Management 31(7-8), 543-554.
Market
• Market-level demand
• Market-level supply
Customer
• POS• Forecasts• Inventory
levels• Promotional
plans
Supplier
• Inventory levels
• Order lead time/delivery
• Advanced shipment notices (ASNs)
• Finished goods location status
Sense Respond Agility
Respond
VolumeFlexibility
VarietyFlexibility
CustomizationFlexibility
New Product
Flexibility
Source: Williams, B.D., Roh, J., Tokar, T., Swink, M. 2013. “Leveraging Supply Chain Visibility for Responsiveness: The Moderating Role of Internal Integration” Journal of Operations Management 31(7-8), 543-554.