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Challenges to Supply Chain

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Submitted By RZee
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SLIDES

Slide 1 Challenges to supply chain effectiveness
What and how much to ship?
When and where to ship?
Objective: Minimizing inventory and other costs and maintaining or improving customer service.
Slide 2 * Demand variability * Translating forecast into orders * Visibility of purchase volume * Accurately assessing volume * Vendor management * Internal collaboration and cooperation * Inventory management * Retail information systems and organizational challenges

Slide 3 Demand Variability * Building a reliable demand chain forecast * Extrapolating past shipment data * Do not have unified view based on recent sales, current inventory levels, current inventory requirements and lead times. * Buying patterns are random and hard to predict * More predictable patterns: looking at group of stores served by a DC, overall company sales and even item sales across all retailers.

Slide 4 Bullwhip effect
Process whereby even very small changes in perceived demand at the retailer level cause even larger changes when you move up the supply chain * Cause fluctuating demand and lead planners make changes to their order levels * Longer the lead time……..more drastic the changes are * Unfilled customer order, planners place larger orders causing backlog * When inventories, they reduce their orders more than necessary to create balance. * Longer lead times for products * Planners place orders for more products * Planners under pressure to reduce costs may batch order

Slide 5 Counter bullwhip * Placing smaller orders on regular basis * Cumbersome to pace frequent small orders when shipping cost for uneconomic batches is high

Slide 6 * Separate links in supply chain causes hurdles and ads little value * Create barriers to flow of information * Information

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