Creating Demand-Responsive Supply Chains

Creating Demand-Responsive Supply Chains

1. Main Challenge

   • Right Products, right quantity, right place and time,

2. Widen Horizons with range Forecasting

   • Forecasting a range of potential outcomes
     • Future demand
     • Contingency Plans
     • Contracting Terms
   • Three scenarios
     • High Demand
     • Monst Likely Demand
     • Low Demand

3. Build Flexibility with Risk Pooling

   • Aggregate Forecasts
     • More accurate than individual
     • Random errors tend to cancel one another out
     • Example: Cadilac
   • Product Variability Reduction
     • A large number of product configurations increases forecasting difficulty
     • Use of Packages
       • Better Risk Pooling
       • Lower variability
       • Better forecasts
       • Lower inventory carrying costs
   • Part Variability Reduction
     • Part Variability reduction
       • Reduce the number of componets used to make products
       • It's used when multiple products share common components

4. Shorten the Forecast horizon

   • Predicting the future is easier when the time horizon is shorter
   • Shorten the lead time
     • Rapid prototyping
       • Speed product development
     • Rapid Tooling
       • Speed the ramp-up process
     • Rapid Manufacturing
       • Speed production process
   • Single supply chain organization
   • Physical proximity
     • Shrink the design process and decrease the time from concept

5. Test Batches

   • Send Samples as tryouts
     • Indicators of forecast
     • Those samples indicate the production of the rest of the line
     • Sales above or below expectations
   • Used in the fashion industry
   • Prediction forecast

6. Share Risk

   • Buybacks
     • Buy back unsold products, such as books
     • Increase profit potentials
   • Revenue Sharing
   • Real option-based contracts
   • Sell more if demand is high

7. Trading Partenrs

   • Providing data to suppliers
     • Reduces costs and prices
   • Retail link
   • Trading data and cooperative process
     • The collaborative planning, forecasting, and replenishment (CPFR)
     • Reduction of inventory levels

8. Andres Garcia-Dobarganes A01204193 Maria Fernanda Villagómez A01165912 Antoine Loret A01675289