Supply Chain Integration Xiaohong Pang Automation Department Shanghai Jiaotong University
Supply Chain Integration Xiaohong Pang Automation Department Shanghai Jiaotong University
Lecture Outline Introduction Push,Pull,and Push-Pull Systems Demand Driven Strategies The Impact of the Internet on Supply Chain Strategies Distribution Strategies Centralized vs.Decentralized Control Central vs.Local Facilities
Lecture Outline Introduction Push, Pull, and Push-Pull Systems Demand Driven Strategies The Impact of the Internet on Supply Chain Strategies Distribution Strategies Centralized vs. Decentralized Control Central vs. Local Facilities
Topics Today Push-based supply chain Demand Driven Introduction Pull-based supply chain Strategies Push-pull supply chain
Topics Today
The Challenge in Supply Chain Integration The challenge in supply chain integration is to coordinate activities across the supply chain,so that the enterprise can improve its performance: Reduce costs Increase service levels Reduce the Bullwhip Effect Better use resources Respond effectively to changes in the market
The Challenge in Supply Chain Integration The challenge in supply chain integration is to coordinate activities across the supply chain, so that the enterprise can improve its performance: Reduce costs Increase service levels Reduce the Bullwhip Effect Better use resources Respond effectively to changes in the market
The Challenge in Supply Chain Integration These challenges are met not only by Coordinating production,transportation, and inventory decisions But more generally by Integrating the front end of the supply chain,customer demand,to the back end of the supply chain,the production and manufacturing portion of the supply chain. supplier manufacturer distributor retailer
The Challenge in Supply Chain Integration These challenges are met not only by Coordinating production, transportation, and inventory decisions But more generally by Integrating the front end of the supply chain, customer demand, to the back end of the supply chain, the production and manufacturing portion of the supply chain. supplier manufacturer distributor retailer
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
