...Learning Team Reflection: Supply Chain and Demand Model Team A ECO/372 June 11, 2014 Learning Team Reflection: Supply Chain and Demand Model What is a Supply Chain? Supply Chain Management? A supply chain is a network of companies and services that have products available to consumers. For example, grocery stores hire farmers to raise vegetables and contract with different transportation agencies to bring them fresh into the stores. The supply chain gets “a good or service from the supplier to the customer (“Supply Chain”, 2014). Goods are often produced anywhere in the world, not necessarily at the local level; supply chain management makes them available in local neighborhood stores so we don’t have to travel overseas just for a pair of jeans, coffee, etc. They make sure we get the best quality and prices. What is the Supply and Demand Model? Supply and Demand is one of the most frequently used terms in economics (Heakal, 2014). More specifically, demand is referring to a quantity and how much of a product or service is desired by its consumers. Demand does not factor in want or desire; it is based on the number that consumers are ready and willing to actually pay money for. Supply is representative of how much the market can offer. Sufficient supply to meet steady demand leads to an equal balance in Supply and Demand. What is the law of supply? Law of demand? Law of supply is explained as the price of a good or service increases, the quantity of those goods or...
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...The bullwhip effect (or whiplash effect) is an observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings in inventory in response to changes in demand, as one looks at firms further back in the supply chain for a product. The concept first appeared in Jay Forrester's Industrial Dynamics (1961) and thus it is also known as the Forrester effect. Since the oscillating demand magnification upstream a supply chain is reminiscent of a cracking whip, it became known as the bullwhip. Because customer demand is rarely perfectly stable, businesses must forecast demand to properly position inventory and other resources. Forecasts are based on statistics, and they are rarely perfectly accurate. Because forecast errors are a given, companies often carry an inventory buffer called "safety stock". Moving up the supply chain from end-consumer to raw materials supplier, each supply chain participant has greater observed variation in demand and thus greater need for safety stock. In periods of rising demand, down-stream participants increase orders. In periods of falling demand, orders fall or stop, thereby not reducing inventory. The effect is that variations are amplified as one moves upstream in the supply chain (further from the customer). This sequence of events is well simulated by the Beer Distribution Game which was developed by MIT Sloan School of Management in the 1960s. The causes can further be divided into behavioral and operational...
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...Introduction In today's global business, there are two basic types of companies: production driven and market driven. In general, market driven companies make their business decisions based on marketing and sales, and production driven companies on the other hand, make their decisions based on technical superiority of products. Compared to the production driven companies who heavily invest in product development, market driven companies prefer to invest in creating the value of good branding, meaning that they mainly rely on the market forces rather than technical achievement. Market driven bank As one of the big five banks in Canada, TD bank terribly concerns the consequences to its clients in the long term from the services it provides. For example, along with the popularization of Internet, TD was aware of the market demand for online banking, and thus developed the first online banking system in Canada so called "Easyweb" in the 80s. The new technique was a light spot at that time, and greatly benefited the bank from attracting a large base of new clients. In the following years, TD bank continued to improve the Easyweb system based on market reaction and provide exceptional banking services to its clients. After 20 years endeavour, TD bank is now ranked the second largest bank in Canada, with the largest customer base. Logistics strategy A company's logistics strategy should be matching to its overall business strategy to take effect. A logistics design strategy,...
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...benefits of integrating your global supply chain by recognizing the cross-functional links throughout the supply chain, from supplier to customer relationships. Integrating supply chain processes allow companies to manage relationships more effectively, which reduces cost, increases the overall internal efficiency and improves customer relationships and service. &txt2=The program's faculty include Thoma Prof. Hau Lee of Stanford University and professors Marc Sachon, Brian Subirana, and Paddy Miller of IESE Business School. The faculty will provide a holistic vision of global business operations around the world and the necessary tools to face the challenges that globalization is exerting over the supply chain. &txt3=During this three-day program you will learn about the benefits of integrating your global supply chain by recognizing the cross-functional links throughout the supply chain, from supplier to customer relationships. Integrating supply chain processes allow companies manage relationships more effectively, which reduces costs, increases overall internal efficiency and improves customer relationship and service. Customers' demands are the final drivers of your business supply chain activities. This program will give you vision for demand driven supply chains and will address the key hurdles to be overcome to effectively put into action your strategies. As Information Technology is revolutionizing the supply chain, information driven strategies provide you with greater...
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...Supply Chain A supply chain consists of all parties involved in receiving and filling a customer request. It requires transformation of components, natural resources and raw materials into a finished product that has to be delivered to the customer. Such activities begin when a customer has placed an order and end when the customer pays for his/her purchase. Most of the supply chains actually work as supply networks. There has to be a constant flow of information and funds between different stages. This makes the supply chains very dynamic in nature. A typical supply chain involves the following stages: * Customers- The primary purpose of any supply chain is to satisfy the customer needs, thus, a customer forms the most integral part of a supply chain. * Manufacturers- They are the producers of the products or goods. * Wholesalers- Wholesalers are persons or firms that purchase large quantities of goods or products from the producers, warehouse them and resell them to the retailers. Wholesalers that carry only non-competing goods are called as distributors. * Retailers- Retailers purchase goods from the wholesalers in large quantities and then sell the smaller quantities to the customers. They can purchase goods directly from the manufacturer. * Raw material/Component suppliers- They supply the primary components or raw materials that are used by the manufacturers for production process. The transformation process converts these into the finished products...
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...Ford Motor Company: Supply Chain Strategy Executive Summary The Ford Motor Company is a well established, international automotive design and production company that is shifting the company mission to have an emphasis on shareholder value and customer responsiveness. In the face of increasing international competition, Ford has recognized several facets of operations that can be better executed in order to attain the outlined objectives. There has been several alternatives to various operations within Ford that can directly alter the fundamentals of its business, all with a strategic significance put on the supply chain procedures. This case study identifies these options; maintaining current practices and partnerships, standardization of their supply chain and sub-system products to simplify the supply process, adjust the retail services and dealership chains to drive market driven sales and a combination of virtual integration with key suppliers to drive relationship based supply that is determined by a forecast driven sales and production model, called the Ford 2000 Process. Through the evaluation of the presented alternatives, the Ford 2000 Process has been selected as being the most effective path to achieve the corporate goals of the Ford Motor Company. Ford should be able to utilize it’s current market share and global supply network to generate beneficial partnerships on key suppliers and stabilize a fluctuating production model that is riddled with waste...
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...Supply Chain and Demand Model Valerie Prich ECO/372 April 20, 2015 Matthew Angner Supply Chain and Demand Model The relationship between a supply chain and a supply and demand model is an important one. Without this relationship, business would not be able to be as organized with their business. Along with this, the businesses would also not be able to distribute their products to the consumers. The consumers who purchase the products do not realize all of the steps that come with this relationship. There needs to be an understanding of both the supply chain and the supply and demand model. Supply Chain Supply chain is the beginning of a business production. A business must have a supply chain in order to be able to receive products and to distribute them. The definition of supply chain is described as a certain network of other companies that works together to both serve the customer, and the consumer (Supply Chain, 2015). A supply chain is the main link between a business and its consumers. When a consumer purchases a product from a business it comes from a line of other companies. The product might come from one store that manufactures the product, then is sold to another store for a goods price, next it is sold to the customer at the price they are willing to pay. Supply chains are not always used to their full extent. Many companies are unaware of what really goes on within their supply chain. There are businesses that do not know the information flow of the supply...
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...extended example to discuss how ‘the sector matrix’ framework is useful for analysing demand and supply linkages in an industry. The end of the 20th century has experienced rapid changes in the way of trading, due to the expansion of capitalism. The Oxford dictionary defines capitalism as “an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state”. Due to high competition, firms have desperately been trying to reduce costs of production in order to maximise profits. Published in “Competitive Advantage” in 1985, Porter’s value chain is a great example to show how much importance firms gave to the supply side of the market in this period. Porter described the value chain as “a set of products and services linked together in a sequence of value adding economic activities”. In other words, it analyses the stages in which a product is created from raw material until it’s finished, each stage adding value to the product. Gereffi’s ‘Global Commodity chains’ uses the old strategy chains and links them with their political and geographical context, adding a spatial and territorial dimension to the demand and supply in a market.________________________________________ In 1998 in their article “Breaking the Chains? A sector Matrix for Motoring”, Julie Froud, Colin Haslam, Sukhdev Johal and Karel Williams tackled the settled chain concepts by showing its limits regarding complex industries such as motoring or...
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...1. | What problem in its supply chain system did Whirlpool face by 2000? a. High inventory of finished goods but low availability b. Low amounts of finished goods c. High availability of goods but poor forecasting d. High demand but low inventories of finished goods | 2. | What unique approach did Whirlpool employ in defining a solution? a. Seeing the supply chain as originating with suppliers b. Seeing the supply chain as a way to focus on customers c. Seeing the supply chain as an extension of its sales practices d. Seeing the supply chain as a tool secondary to knowledge management | 3. | (Synthesis)Which type of system, from a constituency perspective, did Whirlpool need to improve? a. MIS b. DSS c. TPS d. ESS(Synthesis in terms of arrange, model) | 4. | (Analysis)Why is overstocking warehouses not an effective solution for a problem of low availability? a. It slows product time to market. b. It is an inefficient use of raw materials. c. It increases sales costs. d. It increases inventory costs. (Analysis in terms of compare, appraise) | 5. | (Analysis)Which of the following business values of supply chain management systems did Whirlpool’s solution illustrate most effectively? a. Using assets more effectively b. Speeding product time to market c. Matching supply to demand d. Reducing costs(Analysis in terms of compare, appraise) | 6. | A suite of integrated software modules...
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...Sharing Demand Signals: A New Challenge to Improve Collaboration within Supply Chains Karine Evrard-Samuel University Pierre Mendès-France Grenoble II, karine.samuel@upmf-grenoble.fr The purpose of this article is to provide an overview of collaborative demand planning. This article focuses on this practice particularly when information is shared in the downstream supply chain between a manufacturer and a retailer. We show how a manufacturing supply chain needs to be aligned with the retail supply chain in order to create value for the trading partners and for the end consumer. Through the analysis of three case studies we attempt to identify which practices allow efficient collaborative demand planning. Regarding the findings, different types of demand signals are identified through the planning process and allow us to highlight some breaking points that prevent the alignment and optimization of the retail chain. Research implications are the identification of four steps in the demand planning process that will help managers to better understand which actions should be taken to improve their collaboration practices. The originality of this article lies in the fact that it goes beyond historical demand figure analysis and focuses instead on information sharing about demand signals within supply chains as one of the keys to responding to retail demand with greater agility. Introduction One of the main challenges that firms have to face within the current environment is to increase...
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...CASE STUDY December 2002 Procter & Gamble: Building A Smarter Supply Chain Issue/Solution To remain profitable, consumer products manufacturers must find ways to optimize the performance of their supply chains. They need to support marketing promotions better and avoid frustrating consumers with out-of-stock situations in the store. Situation • Procter & Gamble realized it needed a “consumer-driven supply network” to stay ahead in the consumer packaged goods industry. Retailing’s “first moment of truth” is a key focus area for P&G. When the shopper reaches the shelf, is the product there? • Discoveries • • Links between supply chain and CRM processes are critical. Business leads, technology follows. But the technology must be proven, practical and scalable. Even with immature solutions, it is possible to get rapid payback on streamlined demand and fulfillment processes for critical products. A harmonized ERP applications backbone is a basic requirement. • • Recommendations • Secure management support before you start redesigning your supply network. Don’t let politics condemn the initiative to failure. Leverage the value IT can bring in connecting demand and supply side business processes. Simplify your applications architecture to allow collaborative business processes and cope with changes in network alliances. • • Dig Deeper • • • Related Research from GartnerG2 Gartner Core Research Methodology Maria Jimenez with Derek Prior ...
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...is expected to be over three times its size. International brands have over 60% share in the Indian QSR market due to their efficient supply chain practices. However, to handle this much growth the supply chain of QSR companies will have to evolve as it has in the past. Have you ever wondered how restaurants like Pizza Hut and McDonald’s manage to provide such product variety and consistency in taste everywhere across the country? Serving thousands of meals daily with lots of menu choices is quite a task in itself. On top of that introducing seasonal promotions and launching new products makes the QSR supply chain one of the most complex supply chains ever. Demand Planning: * Consumer expectations keep rapidly shifting and food costs keep increasing. This makes the demand and supply in the industry highly volatile. * QSR supply chain is driven by Point of Sale (POS) data and thus it needs a consensus forecast for all stakeholders in the chain which includes suppliers, distribution centers and restaurants. * Indian QSR industry is driven by discretionary spending. People see it as a luxury and not a necessity. They might even spend their discretionary income on other avenues. * Forecasting at store level is dependent upon a lot of local factors also and requires human intervention on top of a robust forecasting method. Supply Challenges: * The farmers cultivating the raw ingredients that make up menus have to deal with problems like soil degradation, climate...
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...Distribution management | Consumer driven supply chains: the case of Dutch organic tomato | Author: F. Anastasiadis, Y.K. van Dam | MKT 625 | | | Introduction Supply chain management refers to the efficient integration of various processes involved in turning resources into consumer products. Effectiveness of the supply chain is more easily understood in terms of Value Chain Management, and the integration of processes that turn resources into consumer value. The current paper reports two studies into the value chain of organic produce in Netherlands. The paper combines two different research approaches to study which consumer motives and values are the main drivers of organic consumption. These motives are centered on hedonic, benevolent, and Universalist values. The study reconfirms earlier findings that health and taste are important motives driving organic food consumption, and that next to this environmental friendliness and naturalness are important drivers. More fundamentally, the consumption value of organic food is strongly related to social and ethical principles and beliefs. By committing it to superior ethical performance the organic supply chain could create a competitive advantage that is not easily copied by competing products. Objectives of the Study The basic objective is to understand consumer product knowledge and motivations with respect to organic products. In other words, this research focuses on the consumers’ beliefs towards...
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...Value Chain = Supply Chain + Demand Chain: New Approaches to Creating and Capturing Sustainable Value Fanny Thublier(1), Terry Hanby (2) and Yongjiang Shi (2) Arts et Métiers ParisTech 75013 Paris, France (2) Institute for Manufacturing University of Cambridge, Cambridge, CB3 0FS, UK (1) Abstract The purpose of this research paper is to develop a Value Chain conceptual model based on a combined Supply and Demand approach. Drawing primarily from the literature on Supply Chain, Demand Chain and Value Chain, modern definitions for these concepts are developed. Based on these findings, a new equation in the “value” world is introduced: “Value Chain = Supply Chain + Demand Chain”. The resultant model recognizes the growing importance of the end-consumer in the design and management of these chains and considers both the effectiveness and efficiency relationship in the Value Chain. In addition, different value perspectives for the Value Chain are suggested with particular focus on sustainable value creation and capture issues. It is anticipated that this model will be developed further in the specific context of the luxury market using case studies to develop and refine the proposed Value Chain model. Keywords: Value Chain, Supply Chain, Demand Chain, Consumer, Customer. Introduction While external forces such as economic, ecological, technological and regulatory developments are increasingly altering the global landscape, new industry trends now affect the value...
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...100834533 | Year: | 1 | Course Code | MN2201K | Course Tutor: | Mr Ailson De Moraes Dr Endrit Kromidha | Assignment No.: | Individual Assignment | Degree Title: | Strategic Management | Question No. & Title: | 2.Using an extended example critically discuss the view that a ‘sector matrix’ gives a better strategic understanding of product markets than the concepts of ‘product’ or ‘commodity’ chains. | This essay will analysis the sector matrix and the chain concept to identify their comparative use and which has a better strategic understanding in the long-run of product market, such as the automobile market. And moreover, it will be begin with the definition and the benefits and limitation of these approaches. As mention, this paper will critic the three tools for analysing and prescribing remedies for improvement in the company performance; the sector matrix framework and the chain concept, Value chain and Global Commodities Chain.This approach will be explain through the seventh-largest auto maker in the automotive industry, Chrysler ( Vanne,2014). Value chain was introduced in 1985 by Michael Porter as a “basic useful tool for firms to achieve competitive advantage and enhancing it to sustain” ( Porter 1985 :26). It defines as a series of activities that builds and create business conceptualising the activities that is provides product and service to a customer (Ensign n.y.) and (Economictimes,2015) Its describe as analysing which focuses on the activities...
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