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SUPPLY REQUIREMENTS (ISSUES (Configuration of distribution network
Deal…
SUPPLY REQUIREMENTS
ISSUES
Configuration of distribution network
Deal with the design of a distribution network to serve a specific market
INVENTORY CONTROL
Concerned with the levels of inventory to be held at various points in the supply chain. As inventory represent cost, the sensible approach is to hold as low an inventory as possible but business are forced to hold inventories as a buffer to counter the affects of an uncertain demand.
SUPPLY CHAIN INTEGRATION AND STRATEGIC PARTNERING
Concern with the complex issue of strategic inter organizational partnership for achieving competitive advantage. This is about sharing of information and efficient use of the information coordinating business processes to deliver a superior value to the customers.
DISTRIBUTION STRATEGY
Concern with the distribution of the firm's products. There are several strategies such as the classical distribution strategy or direct shipping. Which one the better for the company to achieve.
PRODUCT DESIGN
Concern with the design of the product and its impact on total cost of the product. It is possible that the design determine the strategies to be followed regarding inventory of transportation. The design may also determine the length of the product life cycle and the extent of uncertainty associated with demand for this product.
CUSTOMER VALUE
The key issue is the definition of customer value in an age of increasing consumer power. How will supply chain will be designed to provide value to the customers and how will firms define value.
SUPPLY CONTRACT
Relationship between suppliers and the buyers are established by means of supply contract that specify pricing and the volume discounts, delivery lead times, quality, returns, and so forth.
INFORMATION TECHNOLOGY AND DECISION SUPPORT SYSTEM
Information technology is critical enabler of effective supply chain management. Proper analysis and data processing is depend on many other factor and that may be hurdle in SCM
Drivers of Risk
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FORECAST
a. Inaccurate forecast due to long lead times seasonality,products variety, short life cycle
b. Information distortion
KEY ISSUES IN SUPPLY CHAIN
The supply chain management issues concern activities of the firm at various levels of decision making ranging from operational level to strategic level via tactical level.
OPERATIONAL LEVEL is decision making at operational level will concern day to day management of activities such as scheduling, routing, lead time quotation and vehicle loading.
TACTICAL LEVEL where as decision making at this level is concerned with purchasing and production functions, inventory policies and transportation strategies including the frequency with which customers are visited. These decision will be usually updated on annual basis.
STRATEGIC LEVEL is the decision making at this level is made with long term objective and with long lasting effects. This include decision regarding location of various facilities, including the manufacturing plant, distribution warehouse and the structure of the distribution channel.
BULLWHIP EFFECT
a. Its a distribution channel phenomena in which forecast yield
supply chain efficiency. It also refers to increasing swings in
inventory in response to shift in customer demand as one
moves further up the supply chain.
b. It also has disadvantages in logistics because the demand
was not really correct and the producer will cause extra
stock if the produce due to the bullwhip effect. when
customer demand suddenly change a bit, the retailer will
order more in order to fulfill then the wholesaler will also
demand for more to fulfill retailer. Thus the producer will
produce more due to the demand change in wholesaler.