Professional Documents
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10 Supply Chain
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Lack of Supply Chain Coordination
and the Bullwhip Effect
• Supply chain coordination – all stages of the chain
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Bullwhip Effect
• Fluctuations in orders increase as they
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Demand at Different Stages
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R N Pearson Inc. Chain Management, 6e Sunil Chopra, Peter Meindl, Dharam Vir Kalra P E A10R– 5S O N
The Effect on Performance
• Lack of coordination increases variability and
TABLE 10-1
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Key Point
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Obstacles to Coordination
in a Supply Chain
• Incentive Obstacles
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Incentive Obstacles
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Information Processing Obstacles
• When demand information is distorted as it
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Operational Obstacles
• Occur when placing and filling orders lead
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Operational Obstacles
FIGURE 10-2
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Pricing Obstacles
FIGURE 10-3
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Aligning Goals and Incentives
• Align goals and incentives so that every
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Improving Information Visibility and
Accuracy
• Sharing customer demand data
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Key Point
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Improving Operational Performance
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Designing Pricing Strategies
to Stabilize Orders
• Encouraging retailers to order in smaller lots
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Continuous Replenishment and
Vendor-Managed Inventories
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Collaborative Planning, Forecasting, and
Replenishment (CPFR)
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Common CPFR Scenarios
TABLE 10-2
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Collaborative Planning, Forecasting, and
Replenishment (CPFR)
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R N Pearson Inc. Chain Management, 6e Sunil Chopra, Peter Meindl, Dharam Vir Kalra P E A10R– 26S O N
Collaborative Planning, Forecasting, and
Replenishment (CPFR)
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Achieving Coordination in Practice
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Summary of Learning Objectives
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