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1、7/18/2022S.Chopra/Coordination1Supply Chain CoordinationThe role of Information Technology7/18/2022S.Chopra/Coordination2Learning ObjectivesWhat is coordination?Obstacles to coordination: The Bull-Whip EffectCountermeasures to achieve coordinationThe role of information technology in a supply chain7
2、/18/2022S.Chopra/Coordination3Information Coordination: The Bullwhip EffectConsumer Sales at Retailer010020030040050060070080090010001357911131517192123252729313335373941Consumer demandRetailers Orders to Wholesaler010020030040050060070080090010001357911131517192123252729313335373941Retailer OrderWh
3、olesalers Orders to Manufacturer010020030040050060070080090010001357911131517192123252729313335373941Wholesaler OrderManufacturers Orders with Supplier010020030040050060070080090010001471013161922252831343740Manufacturer Order7/18/2022S.Chopra/Coordination4Impact of the Bullwhip Effect7/18/2022S.Cho
4、pra/Coordination5Bull Whip Effect - Operational Obstacles (Batching)Contributing factorsHigh Order CostFull TL economiesRandom or correlated orderingCounter MeasuresEDI & Computer Assisted Ordering (CAO)Discounted on Assorted Truckload, consolidated by 3rd party logisticsRegular delivery appointment
5、Volume and not lot size discountsState of PracticeMcKesson, Nabisco, .3rd party logistics in Europe, emerging in the U.S.P & G7/18/2022S.Chopra/Coordination6Bull Whip Effect - Pricing ObstaclesContributing factorsHigh-Low Pricing leading to forward buyDelivery and Purchase not synchronizedCounter Me
6、asuresEDLPLimited purchase quantitiesScan based promotionsState of PracticeP&G (resisted by some retailers)Scan based promotion7/18/2022S.Chopra/Coordination7Bull Whip Effect - Incentive ObstaclesContributing factorsIncentives based on sell-in leading to forward buyCounter MeasuresFocus sales force
7、on increasing sell-thruIncentives based on rolling horizonSales force do not compete with each other but with the competition7/18/2022S.Chopra/Coordination8The Bullwhip Effect: Information Processing ObstaclesContributing factorsNo visibility of end demandMultiple forecastsLong lead-timeCounter Meas
8、uresAccess sell-thru or POS dataDirect sales (natural on web)Single control of replenishmentLeadtime reductionState of PracticeSell-thru data in contracts (e.g., HP, Apple, IBM)CFAR, CPFR, CRP, VMI (P&G and Walmart)Quick Response Mfg. Strategy7/18/2022S.Chopra/Coordination9Bull Whip Effect - Operati
9、onal Obstacles (Rationing Game)Contributing factorsProportional rationing schemeIgnorance of supply conditionsUnrestricted orders & free return policyCounter MeasuresAllocation based on past sales.Shared Capacity and Supply InformationFlexibility Limited over time, capacity reservationState of Pract
10、iceSaturn, HPSchedule Sharing (HP with TI and Motorola)HP, Sun, Seagate7/18/2022S.Chopra/Coordination10Managerial Implications of the Bull Whip Effect - Behavioral FactorsContributing factorsLack of trustLocal reactionCounter MeasuresBuilding trust and partnershipState of PracticeWal-Mart and P&G wi
11、th CFAR7/18/2022S.Chopra/Coordination11Role of Information in Supply Chain Success7/18/2022S.Chopra/Coordination12Information Technology in a Supply Chain: Legacy Systems7/18/2022S.Chopra/Coordination13Information Technology in a Supply Chain: ERP SystemsSupplierCustomerRetailerDistributorManufactur
12、erStrategicPlanningOperationalERPPotentialERPPotentialERP7/18/2022S.Chopra/Coordination14Information Technology in a Supply Chain: Analytical ApplicationsSupplierCustomerRetailerDistributorManufacturerStrategicPlanningOperationalSupplierAppsSCMMESDem PlanTransport execution &WMSAPSTransport & Invent
13、oryPlanningCRM/SFA7/18/2022S.Chopra/Coordination15Information Technology in a Supply Chain: Future Trends and IssuesBest of breed versus single integratorThe role of application service providers (ASP)The role of the Internet and B2B exchanges7/18/2022S.Chopra/Coordination16Summary of learning objec
14、tivesCoordination in the supply chainBullwhip effectObstacles and CountermeasuresThe role of information technology in a supply chainFuture issues in information technology7/18/2022S.Chopra/Coordination17Information Infrastructure: Required TechnologiesBasic EDI communication systemPerpetual invento
15、ry systemTechnology to share forecast informationTechnology to transfer promotional and one time ordersSales incentives will have to be transferred from shipment driven to consumption driven (EDLP between supplier and retailer)7/18/2022S.Chopra/Coordination18Transportation Infrastructure: Cross Dock
16、ingThe movement of materials directly from receiving to shipping with minimum dwell time in between.Required informationWhat is coming? How is it coming? Quantity and configuration? Markings and identifications?Where is it to be moved when unloaded? Interim and final destination?Any special handling
17、?Advance Ship Notice (ASN): Key to improving cross docking efficiency7/18/2022S.Chopra/Coordination19Receiving Infrastructure: Automated Receiving TechnologiesDEX (Direct EXchange)Supplier uses hand held terminal to build delivery invoice as product is being delivered. Transmits to receiver who verifies delivery. Used for direct store delivery since it provides flexibility.NEX (Network EXchange)Automated invoices transmitted electronically from supplier headquarters and available to receiver when delivery sh
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