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TheCharacteristicsofSupplyChainManagementComplexity,Variability,ConflictingObjectives,2003AndersenConsulting,1,OrderResponseTimeProductAvailabilityLeadTimeOrderChangesDueDatePerformance,ResourceInvestmentAssetProductivityInventorySupplier&CapacityContracts,LevelofService,CostofService,TheBusinessChallenges,2003AndersenConsulting,2,,,,,,,,WhatarethecharacteristicsofSupplyChanManagement,whyisitsohardtomanage?,2003AndersenConsulting,3,Complexity,ComplexityinComponent/SemiconductorManufacturingMasscustomizationPersonalizationProductmixeffectsoncapacityMultipleoptionsContractedvs.ownedcapacityCombinedmake-to-forecastandmake-to-orderInvertedBOMBinningMulti-stageglobalproduction,2003AndersenConsulting,4,Uncertaintyinthesupplychainresultsinsignificantvariability,CustomerDemand,SupplierPerformance,Manufacturing,CustomerDeliveries,,,,,,RawMaterials,FinishedGoods,ByTomDavis,2003AndersenConsulting,5,,,,,,,Supply,,,,,,,,ChannelOrders,ActualLaunch,RealShortage,Returns/Cancellations,Over-Supply,,ChannelFillandPhantomDemand,,,,,,,Multipleforecastsandunreliablefulfillmenttodaycreatethebullwhipeffect.,2003AndersenConsulting,6,Shortenedproductlifecyclehasincreasedtheuncertainty.,Ramp-upOngoingEndofLifeRoleofInventoryHighUsualLowCostofShortageHighUsualLowCostofOverageLowUsualHigh,ByProfessorHauL.Lee,StanfordUniversity,2003AndersenConsulting,7,,,,,,,,Variability,NaturalDemandMaterialsupplyProductionDistributionSelf-IntroducedReplenishmentstrategiesPlanningprocessesInventorystrategies,2003AndersenConsulting,8,TraditionalfunctionalalignmentscontinuetoimpedeSupplyChainPerformance.,—MisalignedFunctionalGoals&Behaviors—,Goal:,Behavior:,Lowestpurchaseprice,Highestutilization,Lowestcost,100%customersatisfaction,LongleadtimesHighrawmaterialinventorylevel,LongrunlengthsInflexibleschedulesHighWIPinventory,LongorderfilltimesInflexibleschedules,HighinventoriesPromiseflexibility,2003AndersenConsulting,9,ConflictingObjectives-Manufacturing,,,,,,,,Little’sLaw,,,,,Little’sLaw,,,AssetUtilization,WIPINV,CycleTime,Variability,Throughput,WIPCycleTimeVariability,,,2003AndersenConsulting,10,ConflictingObjectives-Customer,2003AndersenConsulting,11,ConflictingObjectives-Corporate,
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