Lecture 8:effect &Chapter 5:Bullwhipthe value of informationDr.Wang,Zhang-qiong王长琼Wuhan University of TechnologyDesigning and Managing the Supply Chain,WHUT,2017
Lecture 8: Chapter 5: Bullwhip effect & the value of information 1 Dr. Wang, Zhang-qiong 王长琼 Wuhan University of Technology Designing and Managing the Supply Chain, WHUT, 2017
effect&Chapter 5:Bullwhipthe valueofinformationObjectives :1.Whatisthebullwhipeffect?2.What are thefactors causingthe bullwhipeffect ?3.Howto reducethe bullwhipeffectoreliminateitsimpact?
Chapter 5: Bullwhip effect & the value of information Objectives : 1.What is the bullwhip effect ? 2. What are the factors causing the bullwhip effect ? 3.How to reduce the bullwhip effect or eliminate its impact? 2
5.1 IntroductionInformationflow ~materialflow;(inventory)Information type in a SC*Inventorylevels*Orders*Production*Deliverystatus
5.1 Introduction Information flow ~ material flow; (inventory) Information type in a SC Inventory levels Orders Production Delivery status 3
TheValueof Information*Helps reduce variability in the supply chain.* Helps suppliers make betterforecasts,accounting forpromotions and market changes.* Enables the coordination of manufacturing anddistribution systems and strategies.* Enables retailers to better serve their customers byoffering tools for locating desired items.* Enables retailers to react and adapt to supplyproblems more rapidly* Enables lead time reductions
The Value of Information Helps reduce variability in the supply chain. Helps suppliers make better forecasts, accounting for promotions and market changes. Enables the coordination of manufacturing and distribution systems and strategies. Enables retailers to better serve their customers by offering tools for locating desired items. Enables retailers to react and adapt to supply problems more rapidly. Enables lead time reductions. 4
5.2Bullwhip Effect1.What is the bullwhip effect ? (p. 133 ~136)*While customer demand for specific productsdoes not vary much* Inventory and back-order levels fluctuateconsiderably across their supply chainP&G'sdisposablediaperscase
5.2 Bullwhip Effect While customer demand for specific products does not vary much Inventory and back-order levels fluctuate considerably across their supply chain P&G’s disposable diapers case 1.What is the bullwhip effect ? (p. 133 ~136) 5
4-Stage Supply ChainExternalDemandRetailerFIGURE5-5:ThesupplychainOrderleadtimeDelivery lead time?Sales quite flatWholesaler.Distributor orders fluctuateOrderleadtimeDeliveryleadtimemore than retail salesDistributor· Supplier orders fluctuateOrderleadtimeDeliveryleadtimeeven moreFactoryProduction leadtime6
4-Stage Supply Chain FIGURE 5-5: The supply chain • Sales quite flat • Distributor orders fluctuate more than retail sales • Supplier orders fluctuate even more 6
HigherVariabilityinOrdersPlacedbyRetailertoManufacturerThanActualSalesQuantity6050OrdersPlaced403020ActualSales101TimeLee, H, P. Padmanabhan and S. Wang.(1997), Sloan Management Review
Higher Variability in Orders Placed by Retailer to Manufacturer Than Actual Sales Lee, H, P. Padmanabhan and S. Wang (1997), Sloan Management Review 7
IncreasingVariabilityofOrdersUptheSupplyChainConsumerSalesRetallerOrders toWholesalersOrderQuantityOrderQuantity20201510TimeManufacturerOrderstoSuppllerWholesalerOrderstoManufacturerDrderQuantityOrderQuantity212015151010Lee,H,P.Radmanabhan and S.Wang (1997), SloaniManagement Review
Increasing Variability of Orders Up the Supply Chain Lee, H, P. Padmanabhan and S. Wang (1997), Sloan Management Review 1-8
EffectofOrderVariabilityOrdervariabilityinthesupplychain8070Ordervariability60Factoryis amplified up50Distributorthe supply chain;40WholesalerUpstreamRetailer30echelonsfaceCustomer20highervariability10O1921511K1517WeekFIGURE5-6:The increaseinvariabilityinthesupply chain
Effect of Order Variability FIGURE 5-6: The increase in variability in the supply chain Order variability is amplified up the supply chain; Upstream echelons face higher variability. 9
供应商分销商零售商市场需求上游下游10
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