Global Supply Chain
Management
Freddy Vlaanderen
Summary
10/21/17
,Global Supply Chain Management Summary Freddy Vlaanderen
Table of Contents
Chapter 1....................................................................................................................................................... 7
1.1 What is supply chain management? ................................................................................................... 7
1.2 The development chain ...................................................................................................................... 7
1.3 Global optimization............................................................................................................................. 7
1.4 Managing uncertainty and risk ........................................................................................................... 8
1.5 The evolution of supply chain management....................................................................................... 8
1.6 The complexity .................................................................................................................................... 8
1.7 Key issues in supply chain management............................................................................................. 8
Chapter 2..................................................................................................................................................... 10
2.1 Introduction ...................................................................................................................................... 10
2.2 Single stage inventory control .......................................................................................................... 10
2.2.1 The economic lot size model ..................................................................................................... 10
2.2.2 The effect of demand uncertainty ............................................................................................. 11
2.2.3 Single period models.................................................................................................................. 11
2.2.4 Initial inventory .......................................................................................................................... 11
2.2.5 Multiple order opportunities ..................................................................................................... 11
2.2.6 Continuous review policy ........................................................................................................... 12
2.2.7 Variable lead times .................................................................................................................... 13
2.2.8 Periodic review policy ................................................................................................................ 13
2.2.9 Service level optimization .......................................................................................................... 14
2.3 Risk pooling ....................................................................................................................................... 14
2.4 Centralized versus decentralized systems ........................................................................................ 15
2.5 Managing inventory in the supply chain ........................................................................................... 15
2.6 Practical issues .............................................................................................................................. 16
2.7 Forecasting ........................................................................................................................................ 17
2.7.1 Judgment methods .................................................................................................................... 17
2.7.2 Market research methods.......................................................................................................... 17
2.7.3 Time-series methods.................................................................................................................. 18
2.7.4 Causal methods .......................................................................................................................... 18
2.7.5 Selecting the appropriate forecasting technique ...................................................................... 18
Chapter 3..................................................................................................................................................... 19
3.1 Introduction ...................................................................................................................................... 19
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,Global Supply Chain Management Summary Freddy Vlaanderen
3.2 Network design ................................................................................................................................. 19
3.2.1 Data collection ........................................................................................................................... 19
3.2.2 Data aggregation ........................................................................................................................ 19
3.2.5 Warehouse costs ........................................................................................................................ 19
3.2.6 Warehouse capacity................................................................................................................... 20
3.2.7 Potential warehouse locations .................................................................................................. 20
3.2.11 Solution techniques ................................................................................................................. 20
3.2.12 Key features of a network configuration SCP .......................................................................... 20
3.3 Inventory positioning and logistics coordination.............................................................................. 20
3.3.2 Integrating inventory positioning and network design.............................................................. 20
3.4 Resource allocation ........................................................................................................................... 21
Chapter 4..................................................................................................................................................... 23
4.1 Introduction ...................................................................................................................................... 23
4.2 Strategic components ....................................................................................................................... 23
4.2.1 Supply contracts ......................................................................................................................... 23
4.2.2 Limitations.................................................................................................................................. 24
4.3 Contracts for make-to-stock/make-to-order supply chain ............................................................... 24
4.4 Contracts with asymmetric information ........................................................................................... 24
4.5 Contracts for nonstrategic components ........................................................................................... 25
Chapter 5..................................................................................................................................................... 27
5.1 Introduction ...................................................................................................................................... 27
5.2 The bullwhip effect ........................................................................................................................... 27
5.2.1 Quantifying the bullwhip effect ................................................................................................. 27
5.2.2 The impact of centralized information on the bullwhip effect .................................................. 28
5.2.3 Methods for coping with the bullwhip effect ............................................................................ 28
5.3 Information sharing and incentives .................................................................................................. 28
5.4 Effective forecasts ............................................................................................................................. 28
5.5 Information for the coordination of systems ................................................................................... 29
5.7 Lead-time reduction.......................................................................................................................... 29
5.8 Information and supply chain trade-offs .......................................................................................... 29
5.8.2 Designing the supply chain for conflicting goals ........................................................................ 29
Chapter 6..................................................................................................................................................... 30
6.2 Push, pull, and push-pull systems ..................................................................................................... 30
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, Global Supply Chain Management Summary Freddy Vlaanderen
6.2.1 Push-based supply chain ............................................................................................................ 30
6.2.2 Pull-based supply chain.............................................................................................................. 30
6.2.3 Push-pull supply chain ............................................................................................................... 31
6.2.4 Identifying the appropriate supply chain strategy..................................................................... 31
6.2.5 Implementing a push-pull strategy ............................................................................................ 32
6.3 The impact of lead time .................................................................................................................... 32
6.4 Demand-driven strategies................................................................................................................. 32
6.5 The impact of the internet on supply chain strategies ..................................................................... 33
6.5.1 What is E-business? ................................................................................................................... 33
6.5.5 Impact on transportation and fulfillment .................................................................................. 34
Chapter 7..................................................................................................................................................... 35
7.1 Introduction ...................................................................................................................................... 35
7.2 Direct shipment distribution strategies ............................................................................................ 35
7.3 Intermediate inventory storage point strategies.............................................................................. 35
7.3.1 Traditional warehousing ............................................................................................................ 36
7.3.2 Cross-docking ............................................................................................................................. 36
7.3.3 Inventory pooling ....................................................................................................................... 36
7.4 Transshipment .................................................................................................................................. 37
7.5 Selecting an appropriate strategy ..................................................................................................... 37
Chapter 8..................................................................................................................................................... 38
8.1 introduction ...................................................................................................................................... 38
8.2 A framework for strategic alliances .................................................................................................. 38
8.3 Third-party logistics........................................................................................................................... 38
8.3.1 What is 3PL? ............................................................................................................................... 38
8.3.2 Advantages and disadvantages of 3PL ....................................................................................... 39
8.3.3 3PL issues and requirements ..................................................................................................... 39
8.3.4 3PL implementation issues ........................................................................................................ 39
8.4 Retailer-supplier partnerships .......................................................................................................... 40
8.4.1 Types of RSP ............................................................................................................................... 40
8.4.2 Requirements for RSP ................................................................................................................ 41
8.4.3 Inventory ownership in RSP ....................................................................................................... 41
8.4.4 Issues in RSP implementation .................................................................................................... 41
8.4.5 Steps in RSP implementation ..................................................................................................... 42
3
Management
Freddy Vlaanderen
Summary
10/21/17
,Global Supply Chain Management Summary Freddy Vlaanderen
Table of Contents
Chapter 1....................................................................................................................................................... 7
1.1 What is supply chain management? ................................................................................................... 7
1.2 The development chain ...................................................................................................................... 7
1.3 Global optimization............................................................................................................................. 7
1.4 Managing uncertainty and risk ........................................................................................................... 8
1.5 The evolution of supply chain management....................................................................................... 8
1.6 The complexity .................................................................................................................................... 8
1.7 Key issues in supply chain management............................................................................................. 8
Chapter 2..................................................................................................................................................... 10
2.1 Introduction ...................................................................................................................................... 10
2.2 Single stage inventory control .......................................................................................................... 10
2.2.1 The economic lot size model ..................................................................................................... 10
2.2.2 The effect of demand uncertainty ............................................................................................. 11
2.2.3 Single period models.................................................................................................................. 11
2.2.4 Initial inventory .......................................................................................................................... 11
2.2.5 Multiple order opportunities ..................................................................................................... 11
2.2.6 Continuous review policy ........................................................................................................... 12
2.2.7 Variable lead times .................................................................................................................... 13
2.2.8 Periodic review policy ................................................................................................................ 13
2.2.9 Service level optimization .......................................................................................................... 14
2.3 Risk pooling ....................................................................................................................................... 14
2.4 Centralized versus decentralized systems ........................................................................................ 15
2.5 Managing inventory in the supply chain ........................................................................................... 15
2.6 Practical issues .............................................................................................................................. 16
2.7 Forecasting ........................................................................................................................................ 17
2.7.1 Judgment methods .................................................................................................................... 17
2.7.2 Market research methods.......................................................................................................... 17
2.7.3 Time-series methods.................................................................................................................. 18
2.7.4 Causal methods .......................................................................................................................... 18
2.7.5 Selecting the appropriate forecasting technique ...................................................................... 18
Chapter 3..................................................................................................................................................... 19
3.1 Introduction ...................................................................................................................................... 19
1
,Global Supply Chain Management Summary Freddy Vlaanderen
3.2 Network design ................................................................................................................................. 19
3.2.1 Data collection ........................................................................................................................... 19
3.2.2 Data aggregation ........................................................................................................................ 19
3.2.5 Warehouse costs ........................................................................................................................ 19
3.2.6 Warehouse capacity................................................................................................................... 20
3.2.7 Potential warehouse locations .................................................................................................. 20
3.2.11 Solution techniques ................................................................................................................. 20
3.2.12 Key features of a network configuration SCP .......................................................................... 20
3.3 Inventory positioning and logistics coordination.............................................................................. 20
3.3.2 Integrating inventory positioning and network design.............................................................. 20
3.4 Resource allocation ........................................................................................................................... 21
Chapter 4..................................................................................................................................................... 23
4.1 Introduction ...................................................................................................................................... 23
4.2 Strategic components ....................................................................................................................... 23
4.2.1 Supply contracts ......................................................................................................................... 23
4.2.2 Limitations.................................................................................................................................. 24
4.3 Contracts for make-to-stock/make-to-order supply chain ............................................................... 24
4.4 Contracts with asymmetric information ........................................................................................... 24
4.5 Contracts for nonstrategic components ........................................................................................... 25
Chapter 5..................................................................................................................................................... 27
5.1 Introduction ...................................................................................................................................... 27
5.2 The bullwhip effect ........................................................................................................................... 27
5.2.1 Quantifying the bullwhip effect ................................................................................................. 27
5.2.2 The impact of centralized information on the bullwhip effect .................................................. 28
5.2.3 Methods for coping with the bullwhip effect ............................................................................ 28
5.3 Information sharing and incentives .................................................................................................. 28
5.4 Effective forecasts ............................................................................................................................. 28
5.5 Information for the coordination of systems ................................................................................... 29
5.7 Lead-time reduction.......................................................................................................................... 29
5.8 Information and supply chain trade-offs .......................................................................................... 29
5.8.2 Designing the supply chain for conflicting goals ........................................................................ 29
Chapter 6..................................................................................................................................................... 30
6.2 Push, pull, and push-pull systems ..................................................................................................... 30
2
, Global Supply Chain Management Summary Freddy Vlaanderen
6.2.1 Push-based supply chain ............................................................................................................ 30
6.2.2 Pull-based supply chain.............................................................................................................. 30
6.2.3 Push-pull supply chain ............................................................................................................... 31
6.2.4 Identifying the appropriate supply chain strategy..................................................................... 31
6.2.5 Implementing a push-pull strategy ............................................................................................ 32
6.3 The impact of lead time .................................................................................................................... 32
6.4 Demand-driven strategies................................................................................................................. 32
6.5 The impact of the internet on supply chain strategies ..................................................................... 33
6.5.1 What is E-business? ................................................................................................................... 33
6.5.5 Impact on transportation and fulfillment .................................................................................. 34
Chapter 7..................................................................................................................................................... 35
7.1 Introduction ...................................................................................................................................... 35
7.2 Direct shipment distribution strategies ............................................................................................ 35
7.3 Intermediate inventory storage point strategies.............................................................................. 35
7.3.1 Traditional warehousing ............................................................................................................ 36
7.3.2 Cross-docking ............................................................................................................................. 36
7.3.3 Inventory pooling ....................................................................................................................... 36
7.4 Transshipment .................................................................................................................................. 37
7.5 Selecting an appropriate strategy ..................................................................................................... 37
Chapter 8..................................................................................................................................................... 38
8.1 introduction ...................................................................................................................................... 38
8.2 A framework for strategic alliances .................................................................................................. 38
8.3 Third-party logistics........................................................................................................................... 38
8.3.1 What is 3PL? ............................................................................................................................... 38
8.3.2 Advantages and disadvantages of 3PL ....................................................................................... 39
8.3.3 3PL issues and requirements ..................................................................................................... 39
8.3.4 3PL implementation issues ........................................................................................................ 39
8.4 Retailer-supplier partnerships .......................................................................................................... 40
8.4.1 Types of RSP ............................................................................................................................... 40
8.4.2 Requirements for RSP ................................................................................................................ 41
8.4.3 Inventory ownership in RSP ....................................................................................................... 41
8.4.4 Issues in RSP implementation .................................................................................................... 41
8.4.5 Steps in RSP implementation ..................................................................................................... 42
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