Designing
and
Managing
the
Supply
Chain:
Concepts,
Strategies
and
Case
Studies.
ISBN:
978-‐007-‐127097-‐7
1
,
Contents
1.
INTRODUCTION
TO
SUPPLY
CHAIN
MANAGEMENT
6
1.1
INTRODUCTION
6
1.2
THE
DEVELOPMENT
CHAIN
6
1.3
GLOBAL
OPTIMIZATION
7
1.4
MANAGING
UNCERTAINTY
AND
RISK
7
1.5
THE
EVOLUTION
OF
SUPPLY
CHAIN
MANAGEMENT
7
1.6
THE
COMPLEXITY.
8
1.7
KEY
ISSUES
IN
SUPPLY
CHAIN
MANAGEMENT
8
2.
INVENTORY
MANAGEMENT
AND
RISK
POOLING
10
2.1
INTRODUCTION
10
2.2
SINGLE
STAGE
INVENTORY
LEVEL
11
2.2.1
THE
ECONOMIC
LOT
SIZE
MODEL
11
2.2.2
THE
EFFECT
OF
DEMAND
UNCERTAINTY
11
2.2.3
SINGLE
PERIOD
MODELS
11
2.2.4
INITIAL
INVENTORY
12
2.2.5
MULTIPLE
ORDER
OPPORTUNITIES
12
2.2.6
CONTINUOUS
REVIEW
POLICY
12
2.2.7
VARIABLE
LEAD
TIMES
12
2.2.8
PERIODIC
REVIEW
POLICY
12
2.2.9
SERVICE
LEVEL
OPTIMIZATION
13
2.3
RISK
POOLING
13
2.4
CENTRALIZED
VERSUS
DECENTRALIZED
SYSTEM
13
2.5
MANAGING
INVENTORY
IN
THE
SUPPLY
CHAIN
14
2.6
PRACTICAL
ISSUES
14
2.7
FORECASTING
15
SUMMARY
15
3.
NETWORK
PLANNING
16
3.1
INTRODUCTION
16
3.2
NETWORK
DESIGN
16
3.2.1
DATA
COLLECTION
17
3.2.2
DATA
AGGREGATION
17
3.2.3
TRANSPORTATION
RATES
17
3.2.4
MILEAGE
ESTIMATION
17
3.2.5
WAREHOUSE
COSTS
17
3.2.6
WAREHOUSE
CAPACITIES
18
3.2.7
POTENTIAL
WAREHOUSE
LOCATIONS
18
3.2.8
SERVICE
LEVEL
REQUIREMENTS
18
3.2.9
FUTURE
DEMAND
18
3.2.10
MODEL
AND
DATA
VALIDATION
18
3.2.11
SOLUTION
TECHNIQUES.
19
3.2.12
KEY
FEATURES
OF
A
NETWORK
CONFIGURATION
SCP
19
3.3
INVENTORY
POSITIONING
AND
LOGISTICS
COORDINATION
19
3.3.1
STRATEGIC
SAFETY
STOCK
20
3.3.2
INTEGRATING
INVENTORY
POSITIONING
AND
NETWORK
DESIGN
20
3.4
RESOURCE
ALLOCATION
20
2
, SUMMARY
21
4.
SUPPLY
CONTRACTS
22
4.1
INTRODUCTION
22
4.2
STRATEGIC
COMPONENTS
22
4.2.1
SUPPLY
CONTRACTS
22
4.3
CONTRACT
FOR
MAKE-‐TO-‐STOCK/MAKE-‐TO-‐ORDER
SUPPLY
CHAIN
22
4.4
CONTRACTS
WITH
ASYMMETRIC
INFORMATION
23
4.5
CONTRACT
FOR
NONSTRATEGIC
COMPONENTS
23
SUMMARY
23
5.
THE
VALUE
OF
INFORMATION
24
5.1
INTRODUCTION
24
5.2
THE
BULLWHIP
EFFECT
24
5.2.1
QUANTIFYING
THE
BULLWHIP
EFFECT.
25
5.2.2
THE
IMPACT
OF
CENTRALIZED
INFORMATION
ON
THE
BULLWHIP
EFFECT.
25
5.2.3
METHODS
FOR
COPING
WITH
THE
BULLWHIP
EFFECT.
26
5.3
INFORMATION
SHARING
AND
INCENTIVES
26
5.4
EFFECTIVE
FORECASTS
26
5.5
INFORMATION
FOR
THE
COORDINATION
OF
THE
SYSTEMS
26
5.6
LOCATING
DESIRED
PRODUCTS
27
5.7
LEAD-‐TIME
REDUCTION
27
5.8
INFORMATION
AND
SUPPLY
CHAIN
TRADE-‐OFFS
27
5.8.1
CONFLICTING
OBJECTIVES
IN
THE
SUPPLY
CHAIN
27
5.8.2
DESIGNING
THE
SUPPLY
CHAIN
FOR
CONFLICTING
GOALS
27
5.9
DECREASING
MARGINAL
VALUE
OF
INFORMATION
28
SUMMARY
28
6.
SUPPLY
CHAIN
INTEGRATION
29
6.1
INTRODUCTION
29
6.2
PUSH,
PULL
AND
PUSH-‐PULL
SYSTEMS
29
6.2.1
PUSH-‐BASED
SUPPLY
CHAIN
29
6.2.2
PULL-‐BASED
SUPPLY
CHAIN
29
6.2.3
PUSH-‐PULL
SUPPLY
CHAIN
30
6.2.4
IDENTIFYING
THE
APPROPRIATE
SUPPLY
CHAIN
STRATEGY.
30
6.2.5
IMPLEMENTING
A
PUSH-‐PULL
STRATEGY
30
6.3
THE
IMPACT
OF
LEAD
TIME
31
6.4
DEMAND
DRIVEN
STRATEGIES
31
6.5
THE
IMPACT
OF
THE
INTERNET
OF
SUPPLY
CHAIN
STRATEGIES
31
6.5.1
WHAT
IS
E-‐BUSINESS
32
SUMMARY
32
7.
DISTRIBUTION
STRATEGIES
33
7.1
INTRODUCTION
33
7.2
DIRECT
SHIPMENT
DISTRIBUTION
STRATEGIES
33
7.3
INTERMEDIATE
INVENTORY
STORAGE
POINT
STRATEGIES
33
7.3.1
TRADITIONAL
WAREHOUSING
33
7.3.2
CROSS-‐DOCKING
34
7.3.3
INVENTORY
POOLING
34
7.4
TRANSSHIPMENT
35
7.5
SELECTING
AN
APPROPRIATE
STRATEGY
35
SUMMARY
35
3
and
Managing
the
Supply
Chain:
Concepts,
Strategies
and
Case
Studies.
ISBN:
978-‐007-‐127097-‐7
1
,
Contents
1.
INTRODUCTION
TO
SUPPLY
CHAIN
MANAGEMENT
6
1.1
INTRODUCTION
6
1.2
THE
DEVELOPMENT
CHAIN
6
1.3
GLOBAL
OPTIMIZATION
7
1.4
MANAGING
UNCERTAINTY
AND
RISK
7
1.5
THE
EVOLUTION
OF
SUPPLY
CHAIN
MANAGEMENT
7
1.6
THE
COMPLEXITY.
8
1.7
KEY
ISSUES
IN
SUPPLY
CHAIN
MANAGEMENT
8
2.
INVENTORY
MANAGEMENT
AND
RISK
POOLING
10
2.1
INTRODUCTION
10
2.2
SINGLE
STAGE
INVENTORY
LEVEL
11
2.2.1
THE
ECONOMIC
LOT
SIZE
MODEL
11
2.2.2
THE
EFFECT
OF
DEMAND
UNCERTAINTY
11
2.2.3
SINGLE
PERIOD
MODELS
11
2.2.4
INITIAL
INVENTORY
12
2.2.5
MULTIPLE
ORDER
OPPORTUNITIES
12
2.2.6
CONTINUOUS
REVIEW
POLICY
12
2.2.7
VARIABLE
LEAD
TIMES
12
2.2.8
PERIODIC
REVIEW
POLICY
12
2.2.9
SERVICE
LEVEL
OPTIMIZATION
13
2.3
RISK
POOLING
13
2.4
CENTRALIZED
VERSUS
DECENTRALIZED
SYSTEM
13
2.5
MANAGING
INVENTORY
IN
THE
SUPPLY
CHAIN
14
2.6
PRACTICAL
ISSUES
14
2.7
FORECASTING
15
SUMMARY
15
3.
NETWORK
PLANNING
16
3.1
INTRODUCTION
16
3.2
NETWORK
DESIGN
16
3.2.1
DATA
COLLECTION
17
3.2.2
DATA
AGGREGATION
17
3.2.3
TRANSPORTATION
RATES
17
3.2.4
MILEAGE
ESTIMATION
17
3.2.5
WAREHOUSE
COSTS
17
3.2.6
WAREHOUSE
CAPACITIES
18
3.2.7
POTENTIAL
WAREHOUSE
LOCATIONS
18
3.2.8
SERVICE
LEVEL
REQUIREMENTS
18
3.2.9
FUTURE
DEMAND
18
3.2.10
MODEL
AND
DATA
VALIDATION
18
3.2.11
SOLUTION
TECHNIQUES.
19
3.2.12
KEY
FEATURES
OF
A
NETWORK
CONFIGURATION
SCP
19
3.3
INVENTORY
POSITIONING
AND
LOGISTICS
COORDINATION
19
3.3.1
STRATEGIC
SAFETY
STOCK
20
3.3.2
INTEGRATING
INVENTORY
POSITIONING
AND
NETWORK
DESIGN
20
3.4
RESOURCE
ALLOCATION
20
2
, SUMMARY
21
4.
SUPPLY
CONTRACTS
22
4.1
INTRODUCTION
22
4.2
STRATEGIC
COMPONENTS
22
4.2.1
SUPPLY
CONTRACTS
22
4.3
CONTRACT
FOR
MAKE-‐TO-‐STOCK/MAKE-‐TO-‐ORDER
SUPPLY
CHAIN
22
4.4
CONTRACTS
WITH
ASYMMETRIC
INFORMATION
23
4.5
CONTRACT
FOR
NONSTRATEGIC
COMPONENTS
23
SUMMARY
23
5.
THE
VALUE
OF
INFORMATION
24
5.1
INTRODUCTION
24
5.2
THE
BULLWHIP
EFFECT
24
5.2.1
QUANTIFYING
THE
BULLWHIP
EFFECT.
25
5.2.2
THE
IMPACT
OF
CENTRALIZED
INFORMATION
ON
THE
BULLWHIP
EFFECT.
25
5.2.3
METHODS
FOR
COPING
WITH
THE
BULLWHIP
EFFECT.
26
5.3
INFORMATION
SHARING
AND
INCENTIVES
26
5.4
EFFECTIVE
FORECASTS
26
5.5
INFORMATION
FOR
THE
COORDINATION
OF
THE
SYSTEMS
26
5.6
LOCATING
DESIRED
PRODUCTS
27
5.7
LEAD-‐TIME
REDUCTION
27
5.8
INFORMATION
AND
SUPPLY
CHAIN
TRADE-‐OFFS
27
5.8.1
CONFLICTING
OBJECTIVES
IN
THE
SUPPLY
CHAIN
27
5.8.2
DESIGNING
THE
SUPPLY
CHAIN
FOR
CONFLICTING
GOALS
27
5.9
DECREASING
MARGINAL
VALUE
OF
INFORMATION
28
SUMMARY
28
6.
SUPPLY
CHAIN
INTEGRATION
29
6.1
INTRODUCTION
29
6.2
PUSH,
PULL
AND
PUSH-‐PULL
SYSTEMS
29
6.2.1
PUSH-‐BASED
SUPPLY
CHAIN
29
6.2.2
PULL-‐BASED
SUPPLY
CHAIN
29
6.2.3
PUSH-‐PULL
SUPPLY
CHAIN
30
6.2.4
IDENTIFYING
THE
APPROPRIATE
SUPPLY
CHAIN
STRATEGY.
30
6.2.5
IMPLEMENTING
A
PUSH-‐PULL
STRATEGY
30
6.3
THE
IMPACT
OF
LEAD
TIME
31
6.4
DEMAND
DRIVEN
STRATEGIES
31
6.5
THE
IMPACT
OF
THE
INTERNET
OF
SUPPLY
CHAIN
STRATEGIES
31
6.5.1
WHAT
IS
E-‐BUSINESS
32
SUMMARY
32
7.
DISTRIBUTION
STRATEGIES
33
7.1
INTRODUCTION
33
7.2
DIRECT
SHIPMENT
DISTRIBUTION
STRATEGIES
33
7.3
INTERMEDIATE
INVENTORY
STORAGE
POINT
STRATEGIES
33
7.3.1
TRADITIONAL
WAREHOUSING
33
7.3.2
CROSS-‐DOCKING
34
7.3.3
INVENTORY
POOLING
34
7.4
TRANSSHIPMENT
35
7.5
SELECTING
AN
APPROPRIATE
STRATEGY
35
SUMMARY
35
3
