SUPPLY REQUIREMENT (1. KEY ISSUES (:star: Configuration of Distribution…
1. KEY ISSUES
:star: Configuration of Distribution Network
This issue deals with the design of a distribution network to serve a specific market. This will consist of a set
of warehouses and retail outlets, together with the manufacturing plant and supply sources, based on
consideration of location and capacity of each of these elements. This will also determine the level of service
available to the customers
:star: Inventory Control
This is concerned with the levels of inventory to be held at various points in the supply chain. As a
inventory represents costs, the sensible approach is to hold as low an inventory as possible but
businesses are forced to hold inventories as a buffer to counter the affects of an uncertain demand
:star: Supply Chain Integration and Strategic Partnering
This is concerned 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 for coordinating business processes to deliver a superior value to the
:star: Distribution Strategy
The distribution strategy is concerned with the distribution of the firm's products.
There are several strategies available such as classical distribution strategy/
:star: Product Design
This is concerned with the design of the product and it's impact on total cost of the
product. It is possible that the design determines the strategies to be followed
regarding inventory/ transportation. This design may also determine the length of the
product life cycle and the extent of uncertainty associated with the demand for this
:star: Customer Value
The key issues is the definition of customer value in an age of increasing consumer
power. Hw will supply chains will be designed to provide value to the customers and
how will firms define value.
:star: Supply Contracts
Relationship between suppliers an buyers are established by
means of supply contracts that specify pricing and volume
discounts, delivery lead times,quality, returns and so forth.
:star: Information Technology and Decision Support Systems
Indeed, much of the current interest in supply chain management is motivated by the
opportunities that appeared due to the abundance of data and the savings that can be
achieved by sophisticated analysis of these data. Proper analysis and data processing is
depend on many other factors and that may be a hurdle in supply chain management.
2. DRIVERS OF RISK
Inaccurate forecasts due to long lead times seasonality, product variety, short life cycle
3. BULLWHIP EFFECT
occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance then the sales to the end customer.
it is bad because the demand was not really accurate
and the producer will cause extra stock if they produce due to the bullwhip effect. When the customer demand suddenly
change a bit, the retailer will order more in order to fulfill, then the wholesaler will demand for more to fulfill retailer. It makes the producer will produce more due to the demand change in wholesaler.