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Integration11
問題問題 11
存貨生產存貨生產 (Make to stock) ((Make to stock) (push systempush system))的優點與問題的優點與問題– 成本、效率 成本、效率 vs. vs. 產品多樣化、產品壽命週期產品多樣化、產品壽命週期
問題問題 22—which one is better?—which one is better?11
供應商 配銷商
零售商
零售商
零售商
供應商 配銷商
零售商
零售商
零售商
實體
資訊
Push system
Pull system
Integration33
問題問題 22—which one is better?—which one is better?22
供應商 團購網
消費者
消費者
消費者
供應商
零售商
零售商
零售商
實體
資訊
Integration44
6.1 Introduction6.1 Introduction11
Effective SCM implies:Effective SCM implies:– Efficient integrationEfficient integration of suppliers, of suppliers,
manufacturers, warehouses, and stores. manufacturers, warehouses, and stores.
– Coordinate activitiesCoordinate activities across the supply chain across the supply chain
Improve performance: Improve performance: reducereduce cost cost, , increaseincrease service level service level, , reduce thereduce the bullwhip bullwhip effecteffect, , better better utilize resourcesutilize resources, and , and effectively effectively respond to changes in the respond to changes in the market placemarket place. .
Integration55
6.1 Introduction6.1 Introduction22
Various supply chain Various supply chain integration integration strategiesstrategies: : – Push, pull, push–pullPush, pull, push–pull strategy. strategy.– Matching Matching products and industriesproducts and industries with with
supply chain strategiessupply chain strategies..– Demand-driven Demand-driven supply chain strategies.supply chain strategies.– The impact of the The impact of the Internet Internet on supply on supply
Production and distribution Production and distribution decisions based on decisions based on long-term long-term forecasts. forecasts. ManufacturerManufacturer demand forecasts demand forecasts based on based on orders receivedorders received from the from the retailer’s warehousesretailer’s warehouses. .
Longer reaction timeLonger reaction time to to changing changing marketplacemarketplace::– Inability to meet Inability to meet changing demand changing demand
例如,平板電腦對筆記型電腦的衝擊例如,平板電腦對筆記型電腦的衝擊……推出推出 Ultra Ultra Book…Book… However, ipad However, ipad 已經推出第三代已經推出第三代……
– ObsolescenceObsolescence of supply chain inventory of supply chain inventory as demand for as demand for certain products certain products disappearsdisappears..
Longer reaction timeLonger reaction time to to changing changing marketplacemarketplace::– VariabilityVariability of of orders receivedorders received much much
largerlarger than the than the variability variability in in customer customer demanddemand due to the due to the bullwhip effectbullwhip effect..
Excessive inventoriesExcessive inventories due to the due to the need need for large safety stocksfor large safety stocksLarger and more variableLarger and more variable production production batches(batches( 超時生產與資源閒置的成本增加超時生產與資源閒置的成本增加 ))UnacceeptableUnacceeptable service levelsservice levelsProductProduct obsolescenceobsolescence
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Bullwhip Effect in Push-Based Bullwhip Effect in Push-Based Supply ChainsSupply Chains
Leads toLeads to inefficient resource utilizationinefficient resource utilizationPlanningPlanning and and managingmanaging are much more are much more difficultdifficult. . Not clearNot clear how a manufacturer should how a manufacturer should determine determine production capacityproduction capacity? ? Transportation capacityTransportation capacity? ? – Peak demand? Peak demand? – Average demand? Average demand?
Production and distribution Production and distribution demand demand drivendriven – Coordinated with Coordinated with true customer demandtrue customer demand
rather than forecast demand rather than forecast demand – firm does firm does not hold any inventorynot hold any inventory and and only only
responds to responds to specificspecific ordersorders..
Intuitively attractive:Intuitively attractive:– ReducedReduced lead timeslead times through the ability to through the ability to
better anticipate incoming ordersbetter anticipate incoming orders from the from the retailers.retailers.
– Reduced inventoryReduced inventory since inventory levels since inventory levels decrease with decrease with lead timeslead times
– Less variabilityLess variability in the system in the system– Decreased inventoryDecreased inventory at the at the manufacturer manufacturer
due to the reduction in due to the reduction in variabilityvariability..
Integration1313
Problems of Pull-Based SystemsProblems of Pull-Based Systems
Difficult to implement when Difficult to implement when lead times lead times are so longare so long that it is impractical to that it is impractical to react react to demand informationto demand information
Harder to leverageHarder to leverage economies of scaleeconomies of scale
——DoesnDoesn’’t work in all cases ― t work in all cases ― 現在訂現在訂minimini ,,四個月後交車四個月後交車……
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Push-Pull StrategyPush-Pull StrategySome stagesSome stages of the supply chain of the supply chain operated in a operated in a push-basedpush-based manner manner– typically the initial stagestypically the initial stages
Remaining stagesRemaining stages employ a employ a pull-based pull-based strategy. strategy.
InterfaceInterface between the push-based between the push-based stages and the pull-based stages is the stages and the pull-based stages is the push–pull boundarypush–pull boundary..
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Push-Pull Supply ChainsPush-Pull Supply Chains
Push-Pull Boundary
PUSH STRATEGY PULL STRATEGY
Low Uncertainty High Uncertainty
The Supply Chain Time Line
CustomersSuppliers
Integration1616
Consider Two PC Manufacturers:Consider Two PC Manufacturers:
Build to StockBuild to Stock– Forecast demandForecast demand– Buys componentsBuys components– Assembles Assembles
and meets demand and meets demand if possible.if possible.
A traditional A traditional push push systemsystem
Build to orderBuild to order– Forecast demandForecast demand– Buys componentsBuys components– Observes demandObserves demand– Assembles computersAssembles computers– Meets demandMeets demand
A A push-pull systempush-pull system
The push-pull The push-pull boundary is at theboundary is at the beginning of assemblebeginning of assemble..
Integration1717
General StrategyGeneral Strategy
Make a part of the product to Make a part of the product to stockstock – – generic productgeneric product (CPU (CPU ,, DRAM…)DRAM…)
The point whereThe point where differentiationdifferentiation has to has to be introduced is the be introduced is the push-pull push-pull boundaryboundary
Based on Based on extent of customizationextent of customization, the , the position of the position of the boundary on the boundary on the timeline is decidedtimeline is decided
Integration1818
Push-Pull StrategiesPush-Pull Strategies―― Advantage of the Advantage of the rules of forecastingrules of forecasting
Forecasts are always wrong (Forecasts are always wrong (pull pull
strategystrategy))
The The longer the forecast horizon the longer the forecast horizon the
worst is the forecastworst is the forecast ( (finished goodsfinished goods) )
((push-pull boundarypush-pull boundary))
Aggregate forecastsAggregate forecasts are more accurate are more accurate
((componentscomponents) () (push strategypush strategy))– The The Risk PoolingRisk Pooling Concept Concept
The firm designs the product and the The firm designs the product and the manufacturing process so that decisions manufacturing process so that decisions about about which specific product is being which specific product is being manufactured manufactured can be delayed as long as can be delayed as long as possiblepossible..The portion of the supply chain The portion of the supply chain prior to prior to product differentiation product differentiation is typically is typically operated using a operated using a push-based strategypush-based strategy..The portion of the supply chain The portion of the supply chain startingstarting from the time of from the time of differentiationdifferentiation is is pull-pull-basedbased..
Integration2020
What is the What is the Best StrategyBest Strategy about about Push – Pull StrategyPush – Pull Strategy??
Low High
H
L
Economies of ScalePull Push
Pull
Push
Demand uncertainty
(C.V.)
Delivery costUnit price
IIIIII
GroceryGrocery
IVIV
Books & CDsBooks & CDs
IIII
FurnitureFurniture
II
ComputerComputer
Integration2121
Selecting the Best SC StrategySelecting the Best SC Strategy11
Higher importanceHigher importance ofof economies of scaleeconomies of scale suggestssuggests push push
High uncertainty/ EOS not importantHigh uncertainty/ EOS not important (Box I) (Box I) such as the computer industry implies such as the computer industry implies pullpull (( 例如例如,, Dell Computer)Dell Computer)
Low uncertainty/ EOS importantLow uncertainty/ EOS important (Box III) (Box III) such as groceries implies such as groceries implies pushpush– Demand is stableDemand is stable– Transportation cost reduction is criticalTransportation cost reduction is critical– Pull would not be appropriate here.Pull would not be appropriate here.– 例如,可口可樂例如,可口可樂
Integration2222
Selecting the Best SC StrategySelecting the Best SC Strategy22
Low uncertainty but low value of Low uncertainty but low value of economies of scaleeconomies of scale (Box IV)(high volume (Box IV)(high volume books and cd’s (books and cd’s ( 產品壽命週期短產品壽命週期短 ))– Either Either push strategiespush strategies or or push/pull push/pull
strategies might be most appropriatestrategies might be most appropriate
High uncertainty and high value of High uncertainty and high value of economies of scale economies of scale (Box II)(Box II)– For example, the furniture industryFor example, the furniture industry– How can production be pull but delivery How can production be pull but delivery
push?push?– Is this a “Is this a “pull-pushpull-push” system?” system?
Integration2323
案列討論案列討論書籍或書籍或 CDCD 採採 push or push-pullpush or push-pull 策略策略――科科技技的影響的影響– 傳統印刷廠傳統印刷廠――一刷、二刷、三刷一刷、二刷、三刷…… (push)(push)– 導入電腦化之印刷製程導入電腦化之印刷製程――大量進紙,欲增印大量進紙,欲增印,,
Locating the Push-Pull BoundaryLocating the Push-Pull Boundary11
The The push sectionpush section::– UncertaintyUncertainty is is relatively lowrelatively low– Economies of scaleEconomies of scale importantimportant– LongLong lead timeslead times– ComplexComplex supply chain structures supply chain structures
ThusThus– Management based on Management based on forecastsforecasts is appropriate is appropriate– Focus is on Focus is on cost minimizationcost minimization– Achieved by Achieved by effective resource utilizationeffective resource utilization – –
Locating the Push-Pull BoundaryLocating the Push-Pull Boundary22
The The pull sectionpull section::– HighHigh uncertaintyuncertainty– SimpleSimple supply chain structuresupply chain structure– ShortShort lead timeslead times
ThusThus– Reacting to Reacting to realized demandrealized demand is important is important– Focus on Focus on service levelservice level– FlexibleFlexible and and responsiveresponsive approaches approaches
例如,網路購物例如,網路購物……
Integration2828
Locating the Push-Pull BoundaryLocating the Push-Pull Boundary33
The The push sectionpush section requires: requires:– Supply chain planningSupply chain planning– Long term strategiesLong term strategies
The The pull sectionpull section requires: requires:– Order fulfillment processesOrder fulfillment processes– Customer relationship managementCustomer relationship management
Buffer inventoryBuffer inventory at the boundaries at the boundaries::– The The outputoutput of the of the tactical planning processtactical planning process– The The inputinput to the to the order fulfillment processorder fulfillment process..
Locating the Push-Pull BoundaryLocating the Push-Pull Boundary44
Integration3131
6.3 The Impact of Lead Time6.3 The Impact of Lead Time11
LongerLonger the the lead timelead time, more important it , more important it is to implement a is to implement a push based strategypush based strategy. .
Typically Typically difficultdifficult to to implement a pull implement a pull strategystrategy when when lead times are so longlead times are so long that it is that it is hard to react to demand hard to react to demand informationinformation. .
Integration3232
Impact of Lead TimeImpact of Lead Time22
FIGURE 6-10: Matching supply chain strategies with products: the impact of lead time and demand uncertainty
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Impact of Lead TimeImpact of Lead Time33
Box A Box A – Items with Items with shortshort lead timelead time and and high high
demand uncertaintydemand uncertainty – Pull strategyPull strategy should be applied as much as should be applied as much as
possible. possible.
Box B Box B – Items with Items with long long supply lead timesupply lead time and and low low
demand uncertaintydemand uncertainty. . – Appropriate supply chain strategy is Appropriate supply chain strategy is pushpush..
Integration3434
問題討論問題討論眼鏡業眼鏡業 vs. vs. 紅酒製造業者 紅酒製造業者 ― ― short lead short lead time and high demand uncertainty vs. time and high demand uncertainty vs. long lead time and low demand long lead time and low demand uncertainty ― pull vs. pushuncertainty ― pull vs. push
Integration3535
Impact of Lead TimeImpact of Lead Time44
Box C Box C – items with items with shortshort supply supply lead timelead time and and
Suppliers receive Suppliers receive POS dataPOS dataThey use these data to prepare shipments at They use these data to prepare shipments at previously agreed-upon intervalspreviously agreed-upon intervalsA A pull strategypull strategy at the at the production production and and distribution distribution stages and stages and pushpush at the at the retail retail outletsoutlets..
Box D Box D – Items with Items with lead timeslead times are are longlong and and
unpredictable unpredictable demanddemand InventoryInventory is critical in this type of is critical in this type of environment environment
Requires positioning inventory strategically Requires positioning inventory strategically in the supply chainin the supply chain
Integration3737
問題討論問題討論御便當 御便當 vs. Blu-ray ― vs. Blu-ray ― short lead time short lead time and low demand uncertaintyand low demand uncertainty vs. vs. long long lead time and high demand uncertaintylead time and high demand uncertainty ― ― continuous replenishmentcontinuous replenishment vs. vs. inventoryinventory positioning positioning
Requires Requires integratingintegrating demand demand informationinformation into the into the supply chain supply chain planning process planning process – Demand forecastDemand forecast: :
Use historical demand data to develop long-Use historical demand data to develop long-term estimates of expected demandterm estimates of expected demand
– Demand shapingDemand shaping: : Firm determines the impact of various Firm determines the impact of various marketing plans such as marketing plans such as promotionpromotion, , pricingpricing discountsdiscounts, , rebatesrebates, , new product introductionnew product introduction, , and and product withdrawalproduct withdrawal on demand forecasts. on demand forecasts.
– Collaborative Planning Forecasting and replenishment, Collaborative Planning Forecasting and replenishment,
CPFR))
降低預測誤差的方法降低預測誤差的方法
Integration4444
案例案例iPhoneiPhone 、、 Apple Watch… Apple Watch… 預購活動預購活動……– 利用預購量預測市場可能需求量利用預購量預測市場可能需求量……
Integration4545
案例案例宜蘭燒餅 宜蘭燒餅 vs. vs. 無錫排骨無錫排骨– 上網瀏灠 上網瀏灠 滙款 滙款 宅配到府 宅配到府 vs. vs. 只有無錫的賣只有無錫的賣
場有賣場有賣……
網路實體零售商 網路實體零售商 (click-and-mortar) vs. (click-and-mortar) vs. 實體零售商 實體零售商 (brick-and-mortar)(brick-and-mortar)– 案例,向台中的咖啡店訂咖啡案例,向台中的咖啡店訂咖啡……– *大與*美相關老店 *大與*美相關老店 vs. vs. 虛實整合商店虛實整合商店……
6.5 The Impact of the 6.5 The Impact of the InternetInternet on on Supply Chain StrategiesSupply Chain Strategies11
ExpectationExpectation that increasing use of the that increasing use of the internet would internet would solve a lot of the solve a lot of the business problemsbusiness problems– However, reality was very differentHowever, reality was very different
Many of the problems in the internet-Many of the problems in the internet-based businesses were based businesses were related torelated to logistics strategieslogistics strategies
Integration4949
問題討論問題討論網路賣年菜網路賣年菜……– 鮮食直送 鮮食直送 vs. vs. 第三方低温物流第三方低温物流 ++ 便利商店取貨便利商店取貨
物流的問題解決了,但是口味物流的問題解決了,但是口味……
Integration5050
The Impact of the The Impact of the InternetInternet on on Supply Chain StrategiesSupply Chain Strategies22
E-business strategiesE-business strategies were supposed were supposed to:to:– ReduceReduce cost cost– Increase Increase service levelservice level– Increase Increase flexibilityflexibility– Increase Increase profitprofit
Integration5151
Reality is … downfallReality is … downfallPeapod ExamplePeapod Example– Founded 1989Founded 1989– 140,000 members, largest on-line grocer140,000 members, largest on-line grocer– Revenue tripled to $73 million in 1999Revenue tripled to $73 million in 1999– 1st Quarter of 2000: $25M Sales, Loss: $8M1st Quarter of 2000: $25M Sales, Loss: $8M
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Reality is … successfulReality is … successful
DellDell Example:Example:– Dell Computer has outperformed the competition Dell Computer has outperformed the competition
in terms of shareholder value growth over the in terms of shareholder value growth over the eight years period, 1988-1996, by eight years period, 1988-1996, by over 3,000%over 3,000% (see Anderson and Lee, 1999) (see Anderson and Lee, 1999)
Amazon.com ExampleAmazon.com Example– Founded in 1995; 1st Internet purchase for most Founded in 1995; 1st Internet purchase for most
peoplepeople– 1996: $16M Sales, $6M Loss1996: $16M Sales, $6M Loss– 1999: $1.6B Sales, $720M Loss1999: $1.6B Sales, $720M Loss– 2000: $2.7B Sales, $1.4B Loss2000: $2.7B Sales, $1.4B Loss– 2005: Revenue reached 8.49B with total profit of 2005: Revenue reached 8.49B with total profit of
359M359M
Integration5353
What is E-Business?What is E-Business?11
E-businessE-business is a collection of is a collection of business business modelsmodels and and processesprocesses motivated by motivated by Internet technologyInternet technology, and focusing on , and focusing on improvingimproving the extended enterprise the extended enterprise performanceperformanceE-commerceE-commerce is the ability to perform is the ability to perform major major commerce transactions commerce transactions electronicallyelectronically
Integration5454
What is E-Business?What is E-Business?22
e-commerce is part of e-Businesse-commerce is part of e-BusinessInternet technologyInternet technology is the driver of the is the driver of the business changebusiness changeThe The focusfocus of E-Business is on the of E-Business is on the extended enterprise:extended enterprise:– Intra-organizational Intra-organizational – Business to Consumer (B2C)Business to Consumer (B2C)– BusinessBusiness to Business (B2B) to Business (B2B)
Integration5555
The Grocery Industry The Grocery Industry From Push SystemsFrom Push Systems......– Supermarket supply chainSupermarket supply chain
Picks inventory from storesPicks inventory from storesStock outs 8% to 10%Stock outs 8% to 10%
And, finally to And, finally to Push-Pull SystemsPush-Pull Systems– Peapod, 1999-presentPeapod, 1999-present
Dedicated warehousesDedicated warehouses allow allow risk pooling risk pooling (covers a (covers a geographical areageographical area larger larger than the one covered by an than the one covered by an individual supermarketindividual supermarket))Stock outs less than 2%Stock outs less than 2%
Integration5656
Challenges for On-line Grocery StoresChallenges for On-line Grocery Stores Transportation costTransportation cost– Density of customersDensity of customers– Very Very short order cycle timesshort order cycle times
Less than 12 hoursLess than 12 hours
– Difficult to compete on costDifficult to compete on costMust provide some Must provide some added valueadded value such as convenience such as convenience
Is a push-pull strategy appropriate?Is a push-pull strategy appropriate?
What might be a better strategy?What might be a better strategy?– Low demand uncertaintyLow demand uncertainty, , high economies of scale high economies of scale
(transportation cost)(transportation cost)… … push strategy is betterpush strategy is better……? ? – 例如,買菜網例如,買菜網……
Integration5757
Less than 300,000 shoppersLess than 300,000 shoppers
A New Type of Home Grocer A New Type of Home Grocer
grocerystreet.com grocerystreet.com – On-line window for retailersOn-line window for retailers– The on-line grocer picks products at the The on-line grocer picks products at the
storestore– Customer can pick products at the store or Customer can pick products at the store or
pay for deliverypay for delivery
Yahoo超級商城
Integration5959
The Book Selling Industry The Book Selling Industry
From Push SystemsFrom Push Systems......– Barnes and NobleBarnes and Noble
......To Pull SystemsTo Pull Systems– Amazon.com, 1996-1999Amazon.com, 1996-1999– No inventory, used Ingram to meet most demandNo inventory, used Ingram to meet most demand– Why?Why?
And, finally to And, finally to Push-Pull SystemsPush-Pull Systems– Amazon.com, 1999-presentAmazon.com, 1999-present
7 warehouses, 3M sq. ft.,7 warehouses, 3M sq. ft.,– Why the switch?Why the switch?
Volume grewVolume grewProfit margins Profit margins , service level , service level , etc., etc.
An effective approach - An effective approach - hybrid stocking hybrid stocking strategy strategy – High volume/fast moving products for High volume/fast moving products for local local
storagestorage– Low volume/slow moving products for Low volume/slow moving products for browsing browsing
and purchase on line and purchase on line ((risk poolingrisk pooling))
Integration6363
案例案例Another case: Another case: 高島高島 ×× 的咖啡機的咖啡機……– 策略聯盟下的虛實整合策略聯盟下的虛實整合……
7net
www.scubastore.com
Integration6464
案例案例安*物流中心 安*物流中心 vs. Coca Colavs. Coca Cola
Integration6565
E-FulfillmentE-Fulfillment
How have strategies changed?How have strategies changed?– From From shipping casesshipping cases to to single items single items (( 產品產品
多樣、少量化多樣、少量化…… ))– From From shipping to a relatively small number shipping to a relatively small number
of storesof stores to to individual end users. individual end users. ((宅配宅配 ))– Increased the importance and the Increased the importance and the
complexity of complexity of reverse logisticsreverse logistics– 例如,網路購物例如,網路購物 (B2C)(B2C)
Integration6666
E-Fulfillment Requires a New E-Fulfillment Requires a New Logistics InfrastructureLogistics Infrastructure
Traditional Supply Chain e-Supply Chain
Supply Chain Strategy Push Push-Pull
Shipment Type Bulk Parcel
Inventory Flow Unidirectional Bi-directional
Reverse Logistics Simple Highly Complex
Destination Small Number of Stores Highly Dispersed Customers
SummarySummaryImplementation Implementation of push-pull strategies of push-pull strategies and and demand-driven strategies demand-driven strategies have helped many have helped many companies to improve performance, reduce companies to improve performance, reduce costs, increase service levels. costs, increase service levels. Collapse of many Internet companies shows Collapse of many Internet companies shows that that e-businesse-business has great challenges. has great challenges. Companies need to:Companies need to:– Identify the appropriate supply chain strategy for Identify the appropriate supply chain strategy for
individual products. individual products. – Case for no physical infrastructure or inventory is Case for no physical infrastructure or inventory is
advocates holding inventoryadvocates holding inventoryalthough it pushes the inventory upstream in the supply although it pushes the inventory upstream in the supply chain.chain.