InventoryPooling-GMExample1,500Cadillacsparkedataregional distributioncenterin OrlandoAwait delivery to dealers statewide within24hours10%to11%saleslossbecauseacarisnotavailable...Testprogram expected to:improvecustomerserviceboostsalesofCadillacsby10%7-11
7-11 Inventory Pooling – GM Example ⚫ 1,500 Cadillacs parked at a regional distribution center in Orlando ⚫ Await delivery to dealers statewide within 24 hours ⚫ 10% to 11% sales loss because a car is not available. ⚫ Test program expected to: ⚫ improve customer service ⚫ boost sales of Cadillacs by 10%
CentralizedPooledSystemsPerform BetterForthesameinventory level,acentralized systemprovides:higherservicelevel·highersalesPush-pullsupplychainMovingfromapushsupplychain.DealershavetoorderbeforedemandisrealizedToapush-pull supplychainDealerspull fromregional distributioncentersImplicationsEndconsumerswill seebettercustomerserviceMorecarsareavailable tothem7-12
7-12 Centralized Pooled Systems Perform Better ⚫ For the same inventory level, a centralized system provides: ⚫ higher service level ⚫ higher sales ⚫ Push-pull supply chain ⚫ Moving from a push supply chain ⚫ Dealers have to order before demand is realized ⚫ To a push-pull supply chain ⚫ Dealers pull from regional distribution centers. ⚫ Implications: ⚫ End consumers will see better customer service ⚫ More cars are available to them