The second of our two modules on Supply Chain Strategies, this module will teach you a set of strategies designed for responsive supply chains. Building on the framework we presented in "SCM102: Supply Chain Strategies I: Aligning Strategies; Efficiency and Cost Savings (preview)", you will explore a set of concepts that will help improve customer response time and deal with highly uncertain demand. You will learn a powerful tool for hedging demand uncertainty, so that you can minimize your total cost by taking into account both the opportunity cost of stockouts and the costs of excess inventory. A simulation will show the real benefits - in revenues and profits - from reducing markdowns and stockouts, and the power of profit leverage.

You will learn several advanced, emerging strategies that apply to a wide range of supply chains. You'll see how to understand and cope with supply uncertainty to make your production process more reliable, use "active" demand management methods to minimize the impact of shortages, and discover new types of supplier arrangements that share risk among supply chain partners while providing benefits to all players. Finally, you'll see which of the strategies you've learned aren't software-intensive and understand how you should go about evaluating software for those cases where it is a critical part of the improvement strategy. This can prevent costly mistakes that don't move your company forward.

Course Objectives

• Learn strategies to improve supply chain responsiveness
• Understand a crucial tool to set inventory levels and hedge demand uncertainty
• See the significant benefits to revenues and profits through reductions in markdowns and stockouts
• Learn several advanced strategies, including avoiding/reducing/hedging supply uncertainty, demand management, and a complete analysis of a risk-sharing contract

Course Benefits

• Improve responsiveness and shorten lead times for innovative products or those in the early stages of the product life cycle
• Reduce costs/increase revenues by optimizing inventory levels under demand uncertainty
• Create win-win situations with suppliers by implementing quantity-flexible contracts that share risk among supply chain partners
• Save time and expense by understanding which supply chain strategies do not need expensive software for implementation
• Reduce costs by learning ways of dealing successfully with supply uncertainty

Contents

• 1. Introduction
• 2. Accurate Response and Risk-Based Production Planning
• 3. Build-to-Order (BTO), or Mass Customization

  National Bicycle

• 4. Pre-positioning and Fast NPI

  Zara

• 5. Component Commonality
• 6. Hedging Demand Uncertainty

  The Newsvendor Model

• 7. Hedging Demand Uncertainty (2)

  The Newsvendor Model, Continued

• 8. Supply Uncertainty
• 9. Quantifying the Benefits of Supply Flexibility (New in 2010)

  Markdown / Stockout Simulation

• 10. Supply Uncertainty
• 11. Avoiding Supply Uncertainty
• 12. Reducing and Hedging Supply Uncertainty
• 13. Demand Management

  Dell

• 14. Risk Sharing
• 15. Risk Sharing, Continued
• 16. Risk Sharing, Continued (2)
• 17. The Role of Software
• 18. Conclusions
• 19. Test Your Knowledge