lgw 3 ppt

8/8/2019 LGW 3 ppt

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Question Answers

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By Adekunle KehindeWang Yi

8/8/2019 LGW 3 ppt


T he Bullwhip Effect

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Question1

8/8/2019 LGW 3 ppt


Bullwhip Effect (1)

Phenomenon: the variation of demandincreases up the supply chain fromcustomer to supplier.T he further away a company from the endcustomer, the larger is this variation.E.g: Manufacturer²² lowest variation of demand.

3 rd tier²²largest variation of demand

8/8/2019 LGW 3 ppt


Bullwhip Effect (2)

Reasons of occurrence:Lead time of information and material

Batch orderingPrice fluctuationDemand forecast based on orders of

the next tier or historical record

8/8/2019 LGW 3 ppt


Bullwhip effect (3)

Ways of overcoming itPlan to reduce lead time of information andmaterial (e.g JI T )Decrease variability of prices.Cooperation with supplier on issues of demand and capacity.

8/8/2019 LGW 3 ppt


Customer/retailer

Demand surge& oscillation

Demand surge& oscillation

Distributor

extended lead-time, falseincrease indemand

extended lead-time, falseincrease indemand

Manufacturer

insufficient rawmaterials,insufficientcapacity,extended leadtime

insufficient rawmaterials,insufficientcapacity,extended leadtime

8/8/2019 LGW 3 ppt


Inventory velocity & Information velocity

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Question2

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Inventory velocity

T he speed at which business can movesits stock.IV = cost of goods sold

Average inventory for the period

³Inventory velocity is one of a handful of key performance measures we watch very closely. It focuses us on working with our suppliers to keepreducing inventory and increasing speed.´« MichaelDell

8/8/2019 LGW 3 ppt


Information velocity

T he speed of information flow about aproduct in a market«wiktionary

8/8/2019 LGW 3 ppt


T hese importance of these 2 velocities are:It helps in determining / improvingprofitabilityHelps in determining / improving ROIHelps in eradicating obsolete products inthe warehouseIt provides more predictable supply chain

8/8/2019 LGW 3 ppt


S trategic Partnering

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8/8/2019 LGW 3 ppt


S trategic Partnering (1)

An formal alliance between twocommercial enterprisesFormalize by contrast and form a legalpartnershipMaximize benefits of operation by utilizeother company¶s strengths to make bothstronger

8/8/2019 LGW 3 ppt


S trategic Partnering (2)

Aims:T ake a long-term perspective on needs,costs and solutions.Involve shared risks, costs and rewards.Have agreed problem resolution methods.

Have join governance arrangements.Be capable of change and development.

8/8/2019 LGW 3 ppt


E-business

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Question4

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E-business

E-business

E-commerc

e

E-procurem

ent

E-collabora

tion

8/8/2019 LGW 3 ppt


Impacts on S C

It helps supply chain network partners to identify &respond quickly to changing customer demandover the internet

It allows companies to use internet for procuringdirect or indirect materialsIt helps companies build more value addedservices

Less documentation & human contactReplaces inventory with information ± Reduces logistics & inventory cost

8/8/2019 LGW 3 ppt


More impacts

Fast payment channelIt gives competitive advantage by sharingthe same database system

It allows monitoring of demand in real-timeBoost efficiencyReduce bullwhip effect

8/8/2019 LGW 3 ppt


Effects on Macro-economy

Improves/reduces monetary value ± Less inflation, more stable economic output,

shareholder value

It reduces product price ± Globalization, logistics costs, production

volatility

Labor savings ± Increase unemployment

8/8/2019 LGW 3 ppt


CPFR

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Question5

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CPFR

CPFR: Collaborative Planning, Forecastingand ReplenishmentEnhance supply chain integration

S hared information between suppliers andretailer S eek cooperative management of inventorythrough joint visibility and replenishment of productsIncrease efficiency, update inventorycontinuously and decrease expenditures

8/8/2019 LGW 3 ppt


T hanks for attention Any question?

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