Supply Chain Strategies I: Aligning Strategies; Efficiency and Cost Savings (back to catalog)

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...When production materials or components are threatened to be in short supply, suppliers typically place them "on allocation", which means that suppliers distribute their limited inventory across all their downstream customers to make sure each one gets at least some of their order. Even if you ordered 10,000 monitors for January delivery, you may get only 5,000 due to shortages in availability. Allocation allows suppliers to meet some of the orders from all purchasers, so that no one is left with zero product. The idea is that giving everyone a portion of requirements is somehow better, in the long run, than giving some customers 100% of their orders and other customers nothing.

Invariably, some people will over-order to compensate, particularly if the shortage becomes widely apparent. There are many examples of this behavior, particularly for industrial products and components...

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SCM102 Specifications

Title: Supply Chain Strategies I: Aligning Strategies; Efficiency and Cost Savings

Rating:
4.4 / 5  (1780 ratings)

Total Reading Time: Approx. 1 - 2 hours (for average readers)

Word Count: Approx. 9,000 words

Author:

Certificate: Counts toward Fundamentals of Supply Chain Management

Datasheet:  Download

Contents

  1. Introduction to Supply Chain Strategies
  2. Functional vs. Innovative Products
  3. Efficient vs. Responsive Supply Chain Strategies
  4. Aligning Products and Strategies
  5. Product Life Cycle Revisited
  6. Improving Efficient Supply Chains
  7. Beer Game Introduction
  8. Beer Game Simulation
  9. Beer Game Results
  10. Bullwhip Effect: Importance and Causes
  11. Cause 1: Information Distortion
  12. Cause 2: Order Batching
  13. Cause 3: Promotions
  14. Cause 4: Allocation Gaming
  15. Counteracting Information Distortion: Forecasting Problems and the Hockey Stick Effect
  16. Counteracting Information Distortion: Vendor-Managed Inventory (VMI)
  17. Counteracting Information Distortion: Supplier Managed Availability (SMA)
  18. Counteracting Information Distortion: Reducing Lead Times, Reserving Capacity, and Direct Sales
  19. Counteracting Information Distortion: Keeping Safety Stocks Steady
  20. Counteracting Order Batching
  21. Counteracting Promotions
  22. Counteracting Allocation Gaming
  23. Conclusions
  24. Test Your Knowledge
  25. Feedback
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