1. Chapter 12 Supply Chain Management

3. US Suppliers Off Shore Suppliers US Factory Singapore Factory US DC European DC Asia/Pacific DC Americas Demand European Demand Asia/Pacific Demand Kit Suppliers

10. High obsolescence Low obsolescence High stock out cost Low stock out cost Low volumes per SKU Higher volume per SKU High product variety Low product variety High profit margins Low profit margins High inventory cost Low inventory cost Short selling season Long product life Variable demand Stable demand Difficult to forecast More predictable demand High demand uncertainties Low demand uncertainties Innovative Functional Demand Uncertainty and Product Characteristics

11. Variable lead time Dependable lead time Inflexible Flexible Difficult to changeover Easier to changeover Potential capacity constrained Less capacity constraint More process changes Less process changes Unreliable suppliers Reliable suppliers Limited supply sources More supply sources Potential quality problems Less quality problems Variable and lower yields Stable and higher yields Vulnerable to breakdowns Less breakdowns Evolving Stable Supply Characteristics

12. Computers, semiconductor some food produce (Evolving Process) Telecom, high-end Hydro-electric power, High computers, pop music food, oil and gas (Stable Process) Fashion apparel, Grocery, basic apparel, Low Supply Uncertainty High (Innovative Products) Low (Functional Products) Demand Uncertainty The Uncertainty Framework: Examples

13. (Xilinx, Cisco) (Subway) (Evolving Process) Agile supply chain Risk-hedging supply chains High (Dell, Benetton) (Posco, Barilla) (Stable Process) Responsive supply chains Efficient supply chain Low Supply Uncertainty High (Innovative Products) Low (Functional Products) Demand Uncertainty Achieving Strategic Fit

14. Drivers of Supply Chain Fit Inventory Transportation Facilities Information Drivers Efficiency Responsiveness Supply Chain Structure

15. Considerations for Supply Chain Drivers Proximity / Flexibility Consolidation / Dedicated Facilities Speed Consolidation Transportation Availability Cost of holding Inventory Responsiveness Efficiency Driver Information What information is best suited for each objective

18. Lack of Information Coordination: Bull-Whip* Effect Manufacturer Distributor Wholesaler Retailer Ordering Amount of inventory =

24. manufacturer retailer customers $ 6 / unit $ 12 / unit $ 3 / unit Single firm customers $ 12 / unit $ 3 / unit Order quantity Total profit 30 units $ 195 ( Ret. = 100, Mfr. = 95 ) 42.5 units $ 213.75 comparisons