Lecture 5 Flashcards
Agility (def + example)
Agility
- Respond quickly to short-term changes in demand or supply
- Handle external disruptions smoothly
Positive: Nokia responding to the fire disaster in the Philips factory
Negative: HP hasn’t adapted its supply chain to the unexpected demand change, due to the forcing of high availability rate.
Bullwhip Effect definition
How to get rid of it?
The bullwhip effect is a supply chain phenomenon describing how small fluctuations in demand at the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw material supplier levels.
To get rid of it:
- Forecasting accuracy
- Better communication
7/11 (Agile, Adaptability, Alignment)
Agile
- Real-time systems to detect changes in customer preference.
- Relocates inventory among stores. Restocks at the right time
Adaptability
- Concentrates stores in key locations
- Suppliers in the same region consolidate shipments
- Expanded kinds of vehicles
Alignment
- Share rewards
- Delivers without verifying trucks contents
- Penalty pay
Adaptability (def + example)
Adaptability
- Adjust the supply chain’s design to meet structural shifts in markets
- Modify a supply network to strategies, products, and technologies.
Positive: Microsoft (and Flextronics, an EMS) moving Xbox production from Mexico and Hungary to China.
Negative: Toyota launched Prius – uncertainties were too great to allocate it to dealers based on past trends (transportation cost rose). Toyota hasn’t adapted its distribution system.
Alignment (def + example)
Alignment
- Alignment of interests of all firms in the supply chain with your own
- Lay down roles, tasks, and responsibilities clearly for suppliers and customers
Negative:
- Misalignment of Cisco’s interests with its contract manufacturers. Contractors accumulated large inventories for months without factoring in demand for Cisco’s products.
- HP not aligning interests of IC and printer divisions.
