100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary Supply chain management $15.06
Add to cart
Quickly navigate to
Preview
  2.  
  3. Katholieke Universiteit Leuven (KU Leuven)
  4.  
  5. Master Of Business Administration
  6.  
  7. Supply Chain Management

Summary

Summary Supply chain management
 17 purchases
  • Course
  • Supply Chain Management
  • Institution
  • Katholieke Universiteit Leuven (KU Leuven)

Full summary of all slides & notes given during the video-classes. Professor was Stefan Creemers. At the end of the document, blanco exercises are included so you can easily practice these for the exam. I had a 19/20 for this exam. So summary is very extensive and complete.

Preview 4 out of 80  pages

Document information

  • May 23, 2022
  • 80
  • 2020/2021
  • Summary

Subjects

  • supply chain management
  • scm
  • supply chain management kul
  • supply chain management hw
  • supply chain management mba
  • supply chain management global logistics and port management
  • global logistics and port ma

Written for

  • Katholieke Universiteit Leuven (KU Leuven)
  • Master Of Business Administration
  • Supply Chain Management
All documents for this subject (1)

Seller

avatar-seller
hwstudent2

Reviews received

Content preview

Supply Chain Management summary – theory



1. Bullwhip Effect
1.1 What?
EXAMPLE

BULLWHIP EFFECT: Variability in
orders is amplified as one moves
upwards in the supply chain.
= increasing variability in
ordering patters throughout the
supply chain

The average demand is more of
less the same, but the variations
in demand differs a lot


1.1.1 Implications? → reduced profitability
• Manufacturing cost INCREASES
• Inventory cost INCREASES
o Excess capacity or excess inventory are needed to
deal with variability in orders



• Replenishment lead time INCREASES
• Level of product availability DECREASES
o When excess capacity and excess inventory are not
sufficient, replenishment lead times will increase.
(you make the customer wait for a longer time).



• Transportation cost INCREASES
o Transportation requirements are variable as well…
sometimes you ship a lot, sometimes nothing
o Often 3PL that take care of logistics, but variable
transport contracts are very costly


• Labor cost for shipping and receiving INCREASES
o Staffing requirements are variable …

• Relationships across the supply chain deteriorate
o You either blame the client or the supplier for the
troubles/variations you encounter.

1

,1.2 Causes?
1.2.1 Information distortion
Actual customer demand is
unknown to upstream actors,
so surges/decreases in the
number of orders can be
misinterpreted…

Upstream actors have
As retailer you know the demand As distributor you know the demand LIMITED INFORMATION
of the customer, on which you of the retailer, but not the customer.
place orders at the distributor. Based on the retailer’s demand you
place orders at the manufacturer.

How can we help this?: 1. If manufacturer issues a promotion, they will tell the other actors in the SC
that there will be a peak in demand. 2. E.g. Decathlon: You can sell sales data of the customers to the
manufacturers.

How is it possible that information distortion causes a bullwhip effect???




• Ordering policy:
o How do we choose the quantity to order?
o No information on customer demand, only orders from retailer are known
o Lead times have to be taken into consideration
o Avoid stock-outs and backlog
• “Target inventory” policy:
o Tt= target value for the inventory at time t
o It = net inventory at time t (i.e. inventory at the end of time t, after the arrival of previously
placed orders and after the demand of this period has been fulfilled)
o Dt = demand at time t
o Ot = quantity ordered at time t




EXAMPLE SLIDE 29-52




2

,1.2.2 Local optimization




Each stage in the supply chain focuses solely There would be a bigger pie to distribute if the
on its own profit, without considering the supply chain is coordinated and every party gets
consequences on the complete supply chain… the customers demand.

How is it possible that local optimization causes a bullwhip effect???
Shortage gaming:
What happens if there are shortages? → Allocate available supply based on orders placed…

I ordered 10, but received only 5… HOW CAN I
MAKE SURE TO RECEIVE AS MUCH ORDERS AS
POSSIBLE? ➔ Shortage gaming: I only need 10
PlayStations, but let’s order 23. Given the shortage,
I’ll probably get 10 anyway…




Retailer optimized own performance, got the 10
units it wanted, but disadvantage is that the other
retailers get less and the manufacturer thinks that
there are 113 orders, when there are only 100
orders in reality. Manufact. will overestimate the
true demand of the customer and this is
problematic


Based on the demand of 113, manufacturer builds new factories, increases production, adapts
contracts with suppliers, … whereas the actual demand is only 100!

1.2.3 Operational factors
• Large replenishment lead times: the shower-example
o Lead time = time between placing and receiving an order
o Shower: turn up heat of water
▪ Turn up: too hot
▪ Turn down: too cold
▪ Turn up again → Switch all the time
o This is what happens in a SC: if the order takes longer than expected, what happens?
▪ All orders arrive → inventory arrives, huge stock




3

, • Timing of orders: focal-point periods
o E.g. Autosalon: at that moment in time, a large demand will be generated. The factories
that have to produce this car will see a peak in demand and this will create a huge
bullwhip effect. From a sales perspective, this is good, but from manufacturing
perspective, this is a bad thing
• Sales incentives: based on “sell-in” instead of sell-through “The more you sell, the higher your
bonus!”
o Sales people save up their sales, so they get a bonus rather than spreading them over
time. They try to make focal points or peaks in the demand to get a bonus
• Forward buying because of short-term discounts
o Suppose you give a discount, some people will do forward buying, they buy more than
they need. They will use it through the next month, but this means that the demand in
one month is very high but demand in next months is smaller. As such, this will also peak
in demand and bullwhip effect




o
o Again, what about the actors more upstream in the supply chain?
▪ Beginning of promotion: Good news! Sales are boosting!; Increase capacity,
open new facilities, …
▪ After promotion: Oops, didn’t expect that… Overcapacity, high inventories, …

1.3 Supply chain coordination
1.3.1 Improving information accuracy




Ideal situation, first to share all the information of the SC with all players in the SC. Of course, this is
not easy, because some players are competitors and do not want to share the data. However, for
Decathlon and Oxylm as we’ve discussed, they sell informaiton of the customer throughout the SC
and this way, they can create a bigger pie and better benefits for the SC in a whole.

Optimize SC as a whole, not you own performance as a player

How do we extend the visibility of demand data in a supply chain?
• Sharing point-of-sale data (through information systems / the internet)
o E.g. DELL
• Collaborative planning and forecasting: use 1 demand forecast
o The entire supply chain should use the same demand forecast!
o Not only the point-of-sale data (PoS) should be shared, but promotion plans and other
data which is relevant to the interpretation of the PoS-data as well




4

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller hwstudent2. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $15.06. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

64257 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling

Recently viewed by you

Exam (elaborations) ·

(0)

Exam (elaborations) NUR 1060 Nursing Interventions and Clinical Skills 7th Edition Potter TBW TESTBANK 2021-2022 Review

Exam (elaborations) ·

(0)

TCOLE (Master Study Guide) correct answers 2022

Summary ·

(2)

Samenvatting bedrijfseconomie 1BEM

Summary ·

(0)

Uitgebreide samenvatting verlichting en elektriciteit

Summary ·

(0)

Samenvatting anatomie en fysiologie van hoofd- en halsgebied

Exam (elaborations) ·

(0)

OpenStax Microbiology Test Bank Chapter 9: Microbial Growth

Exam (elaborations) ·

(0)

Get Ahead in Your Studies with the Superior [Campbell Biology in Focus,Urry] Test Bank

$15.06  17x  sold
  • (0)
Add to cart
Added