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Tutorial 7 : Supply Requirement (Key Issue in SCM (Supply chain…
Tutorial 7 : Supply Requirement
Key Issue in SCM
Supply chain integration and strategic partnering
This is concerned with the complex issue of strategic inter organizational partnership for achieving competitive advantage.
Distribution strategy
This is concerned with the distribution of the firm's products.
Inventory control
This is concerned with the levels of inventory to be held at various points in the supply chain.
Product design
This is concerned with the design of the product and its impact on total cost of the product.
Customer value
The key issue is the definition of customer value in an age of increasing consumer power.
Configuration of distribution network
This issue deals with the design of a distribution network to serve a specific market
Drivers of risk in supply requirement
Delays
Inflexibility of supply source
High capacity utilization at supply source
System
Information infrastructure breakdown
Extensive system networking
Disruption
Labor dispute
Supplier bankruptacy
Natural disaster
War terrorism
Forecast
Inaccurate forecasts due to long lead times, seasonality, product variety, short life cycle
Information distortion
Bullwhip effect
The bullwhip effect is a distribution channel phenomenon in which forecasts yield supply chain inefficiencies. It refers to increasing swings in inventory in response to shifts in customer demand as one moves further up the supply chain.