Chopra Sodhi

Question 1

SC efficiency vs. risk reduction

Answer 1

Recurrent risks (demand fluctuations) --> focus on efficiency & improving matching of supply and demand
Disruptive risks --> build resilience despite costs

Question 2

Reduce risk & improve performance

Answer 2

Segmenting SC

Regionalizing SC

Question 3

Segmenting SC

Answer 3

segment using volume, product variety and demand uncertainty
higher volume favors decentralizing (more segments)
high product variety means low volumes, so favors centralizing (fewer segments)
High demand uncertainty favors centralizing
ZARA

Question 4

Regionalizing SC

Answer 4

higher transport costs provides oppty to lower distribution costs and risk
Avoid disruptions being felt globally
NISSAN

Question 5

Reduce risk & limit impact on cost-efficiency

Answer 5

Reduce concentration on resources

Nudge trade-offs in favor of reducing risk by overestimating likelihood of disruptions

Question 6

Reduce concentration of resources

Answer 6

companies often pool inventory with fewer DCs or by having common parts –> high prob. of disruptions
Marginal benefits of concentration become much smaller over time
find optimal point
TOYOTA

Question 7

Nudge trade-offs

Answer 7

humans have tendency to underestimate events that happened long time ago
underestimating far more expensive in long run than overestimating
but small misestimates have small consequences
NOKIA/ERICSSON