Opportunities and Challenges Associated with Supply Chain Integration Various supply chain strategies Push,pull,push-pull systems A framework for matching products with supply chain strategies ■ Demand driven strategies The impact of the Internet on supply chain strategies Effective distribution strategies
Opportunities and Challenges Associated with Supply Chain Integration Various supply chain strategies Push, pull, push-pull systems A framework for matching products with supply chain strategies Demand driven strategies The impact of the Internet on supply chain strategies Effective distribution strategies
Information Availability The availability of information plays an important role in supply chain integration In some cases,the supply chain must be designed to make this information available In other cases,the supply chain strategy must be designed to take advantage of information that is already available(e.g.,POS) -In many cases,an expensive network must be designed to compensate for the lack of information
Information Availability The availability of information plays an important role in supply chain integration. In some cases, the supply chain must be designed to make this information available In other cases, the supply chain strategy must be designed to take advantage of information that is already available (e.g., POS) In many cases, an expensive network must be designed to compensate for the lack of information
Push,Pull,and Push-Pull Systems Traditional supply chain strategies are often categorized as push or pull strategies. Probably this stems from the manufacturing revolution of the 1980s,in which manufacturing systems were divided into these two categories. In the last few years,a number of companies have employed a hybrid approach,the push- pull supply chain paradigm
Push, Pull, and Push-Pull Systems Traditional supply chain strategies are often categorized as push or pull strategies. Probably this stems from the manufacturing revolution of the 1980s, in which manufacturing systems were divided into these two categories. In the last few years, a number of companies have employed a hybrid approach, the pushpull supply chain paradigm
The Old Paradigm: Push Strategies Production decisions based on long-term forecasts Ordering decisions based on inventory forecasts What are the problems with push strategies? Inability to meet changing demand patterns Obsolescence of supply chain inventory As demand for certain products disappears The bullwhip effect: Specifically,the bullwhip effect ■Excessive inventory leads to inefficient resource Excessive production variability utilization,because planning ■Poor service levels and managing are much more Product obsolescence difficult
The Old Paradigm: Push Strategies Production decisions based on long-term forecasts Ordering decisions based on inventory & forecasts What are the problems with push strategies? Inability to meet changing demand patterns Obsolescence of supply chain inventory As demand for certain products disappears The bullwhip effect: Excessive inventory Excessive production variability Poor service levels Product obsolescence Specifically, the bullwhip effect leads to inefficient resource utilization, because planning and managing are much more difficult
The Old Paradigm: Push Strategies Thus,in a push-based supply chain,we often find: Increased transportation costs High inventory levels High manufacturing costs Due to the need for emergency production changeovers
The Old Paradigm: Push Strategies Thus, in a push-based supply chain, we often find: Increased transportation costs High inventory levels High manufacturing costs Due to the need for emergency production changeovers