Supply Chain Management Review

Front 1

Discuss how the following helps alleviate the Bullwhip effect

E-commerce and the Internet

Back 1

- Allow suppliers to have access to more accurate demand information

- It mitigates the Bullwhip Effect by preventing distortion and miscommunication of demand information and reducing the lead time in order processing.

Front 2

Discuss how the following helps alleviate the Bullwhip effect

Express Delivery

Back 2

- Reduces lead times, and the associated demand variance.

- note that the variability of demand is proportional to the lead times in the system

Front 3

Discuss how the following helps alleviate the Bullwhip effect

Collaborative Forecasts

Back 3

- Help all stakeholders in the supply chain to n arrive at a common, agreed-upon forecast of end-customer demand and reduce the bullwhip effect.

Front 4

Discuss how the following helps alleviate the Bullwhip effect

Everyday Low Pricing

Back 4

- Periodic promotions create artificial demand peaks and bottoms and increase the variance in customer demand which amplifies the bullwhip effect.

- Thru Everyday Low Pricing, demand fluctuations can be prevented, alleviating the bullwhip effect.

Front 5

Discuss how the following helps alleviate the Bullwhip effect

Vendor-Managed Inventory

Back 5

- Allows the supplier to monitor downstream demand and to make a well-informed decision about how much to keep on-hand and how much to ship to customers.

- Thus, the supplier doesn't have to rely on order data to forecast demand --> reducing the Bullwhip Effect.

Front 6

Pros of sharing information among different supply chain members

Back 6

- Higher level of cooperation

- Decreases info distortion

- Facilitates collaborative/more accurate forecasting

- Decreases the effect of behavioral biases, such as overreaction to demand shifts or shortage gaming.

- Decreases bullwhip effect

Front 7

Cons of sharing information among different supply chain members

Back 7

- Risk of info leakage

- parties may have less motivation to share info with others supply chains

- Need for proper contracts to increase info sharing and collaboration motivation.

Front 8

Discuss 5 Ways that lead times within a supply chain can be reduced

1.) EDI

Back 8

- Electronic Data Interchange reduces the information lead time in the order process

Front 9

Discuss 5 Ways that lead times within a supply chain can be reduced

2.) Cross-Docking

Back 9

- Reduces/eliminates the time items spend in inventory

Front 10

Discuss 5 Ways that lead times within a supply chain can be reduced

3.) Share Inventory

Back 10

- Sharing inventory with nearby retail stores reduces the lead time during stock-outs

Front 11

Discuss 5 Ways that lead times within a supply chain can be reduced

4.) Share Demand Information

Back 11

- Sharing demand info throughout the supply chain allows companies to be able to respond to demand fluctuations quickly.

Front 12

Discuss 5 Ways that lead times within a supply chain can be reduced

5.) Delayed Differentiation

Back 12

- Delayed Differentiation pushes generic products down the supply chain as much as possible, and allows the supply chain to more easily accomodate demand for a variety of related products.

Front 13

Pros of Location Pooling

Back 13

- Decrease inventory costs including the decrease in the level of safety stock

- Decrease inbound transportation due to aggregation

- The ability to provide high service to customers at low cost.

- Decrease in inventory holding costs

Front 14

Cons of Location Pooling

Back 14

- Inconvenience for the retailers and sales people.

- Low Customer Service

- Customers unable to see the product before buying it

- Being Far from the Customers

Front 15

Pros of Product Pooling

Back 15

- Decrease Inventory costs

- Decrease in demand variability

- less expensive to produce/procure because each component is needed in a larger volume

Front 16

Cons of Product Pooling

Back 16

- May not provide key functionality to consumers with special needs

- May eliminate brand/price segmentation opportunities

- no differentiation or variety

Front 17

Pros of Delayed Differentiation

Back 17

- Allows for differentiation at low cost

- low inventory cost

- ability to adjust the product mix based on the demand patterns

Front 18

Cons of Delayed Differentiation

Back 18

- More expensive to produce or manufacture

- Need for high flexibility in the production system

- Can become expensive due to the flexibility required

Front 19

What 3 factors led Walmart to own its truck although many retailers outsource all their transportation?

Back 19

1.) Scale: Large scale it is unlikely that a 3rd party can achieve further scale economies and increase the surplus

2.) Uncertainty: If requirements are highly variable over time, 3rd party can increase the surplus thru aggregation

3.) Specificity of Assets: If assets are specific to a firm, a 3rd party is unlikely to increase the surplus.

Front 20

How can a supplier with a lower price end up costing the buyer more than a supplier with a higher price?

Back 20

- Lower price can be achieved by sacrificing product quality/reliability and process control. (Ultimately will cost outsourcer more than the total variable cost saved)

- The cost of coordination is often underestimated. ( The outsourcer offloads relatively low-skilled labor but increases the burden on the mid-upper management in controlling the production.

- Firms may also lose customer/supplier contact that causes them to miss opportunities that may have been recognized with a more direct relationship