a) Identify and describe briefly the five supply-chain strategies. b) Walmart is
ID: 349297 • Letter: A
Question
a) Identify and describe briefly the five supply-chain strategies.
b) Walmart is one of the leaders in promoting the development and use of RFID and electronic product codes. Explain how Walmart plans to use RFID, why Walmart wants its suppliers to adopt RFID, and what obstacles you think may exist for this new Technology.
c) Information technologies has become the most important enabler for effective supply chain management. List two key areas where information technology assists with supply chain integration and describe the positive effect of each of these areas can have on supply chain performance.
d) When does the bullwhip effect occurs? Describe two ramifications of the bullwhip effect? What is the primary solution to the bullwhip effect?
Explanation / Answer
Strategy 1: Adopt a demand-driven planning and business operating model based on real-time demand insights and demand shaping.
The right prediction and contingency planning tools will ensure a complete view and an effective response to risks such as suppliers going out of business, political upheaval, and natural calamities affecting manufacturing. Companies then can adjust pricing and promotions strategies to shape demand, move additional product quickly, drive revenue growth, or further expand margins for a high-demand product with limited market supply.
An agile demand-driven supply chain requires end-to-end visibility across the business from buyers and the market to supply. With cloud technology, businesses can have it
Strategy 2: Build an adaptive and agile supply chain with rapid planning and integrated execution. Once executives are able to better understand and shape demand and risk, they need to adapt their supply chains to changing market opportunities and events. Companies must deploy dynamic planning capabilities and continually fine-tune operations to ensure responsive agility to meet changing demand.
The old model was to wait until the end of the month or quarter to shift production and supply based on shipments and sales. The new model calls for more continuous, dynamic supply chain adjustments to rapidly respond to market changes. This can minimize or even eliminate shocks across the supply network. The results include better visibility; enhanced collaboration across the value chain, including reliable and predictable sourcing and supply, manufacturing, transportation, warehousing, and distribution; and accelerated decision-making with better analytics and support.
Strategy 3: Optimize product designs and product management for supply, manufacturing, and sustainability to accelerate profitable innovation. Innovation is crucial for being one step ahead of the competition. But innovation doesn’t exist in a vacuum. To be successful, products must be manufactured at the right cost, place, and time. Decisions made in the early cycles of product development can make or break the product. Designs must be optimized for supply, manufacturability, and supply chain operations. All true costs to deliver must be accurately captured and analyzed to maintain balance across the end-to-end business.
If a company can manage the information, people, processes, and decisions regarding a product throughout its lifecycle, it can achieve strong results and market leadership. There’s no better way to achieve this than with seamless and clear collaboration processes across the end-to-end supply chain from demand, the market, and customers back to manufacturing and suppliers.
Strategy 4: Align your supply chain with business goals by integrating sales and operations planning with corporate business planning.
Although sales and operations planning processes provide coordination among sales, manufacturing, and distribution, there still are disconnects and gaps among finance, strategy, and operations in many companies. One way to bridge these gaps is with integrated business planning that involves people, process, and technology elements of the business. This process integrates financial strategic budgeting and forecasting systems with operations planning and allows smart trade-off decisions to be made for the business.
The resulting marriage of end-to-end processes ensures revenue goals and budgets developed in finance are validated against a detailed, bottom-up operating plan and responsively executed..
Strategy 5: Embed sustainability into supply chain operations. The triple bottom line of people, profit, and planet has never been more important than it is today. Studies show that companies striving for social and environmental sustainability achieve major competitive advantages, especially with regard to production efficiency, supplier management skills, and attractiveness to employees. Substantial opportunities exist for sustainability in supply chain operations:
· Company leaders first need to embed sustainability as a core strategic component and capability of their supply chain strategy. This means incorporating it as a key requirement across all supply chain processes.
· Second, professionals initially should focus on the basics to achieve quick wins through real-time visibility and analyses to energy and resource consumption and resource or material movement. This enables reduction of carbon inefficiencies, minimized energy consumption, less waste with “recycle-reuse-refurbish” materials, and optimized travel and transportation.
· Businesses can keep the momentum by ensuring continuous improvement through systemic measurement, audit, and knowledge management. Compliance audits, best practices, and benchmarks provide a governing framework for sustainable supply chain operations and ensure clarity around the environmental impact of specific actions.
b) Wal-Mart is one of the leaders in promoting the development and use of RFID and electronic product codes. Explain how Walmart plans to use RFID, why Wal-Mart wants its suppliers to adopt RFID, and what obstacles you think may exist for this new Technology.
Wal-Mart plans to use RFID to lower the inventory costs by not having to have people scan barcodes, eliminate vendor fraud by being able to track actual shipments out by scanning pallets while loading trucks, be able to lower shrinkage by preventing theft, and track inventory at distribution centers. The obstacles Wal mart faces is the fact that the RFID tags are more expensive compared to barcodes raising cost for some vendor lowering their already small margins
c) Information technologies has become the most important enabler for effective supply chain management. List two key areas where information technology assists with supply chain integration and describe the positive effect of each of these areas can have on supply chain performance.
Information technology in supply chain management Recently the concepts of supply chain design and management have become a popular operations paradigm. This has intensified with the development of information and communication technologies (ICT) that include electronic data interchange (EDI), the Internet and World Wide Web (WWW) to overcome the ever-increasing complexity of the systems driving buyer–supplier relationships.
The complexity of SCM has also forced companies to go for online communication systems. For example, the Internet increases the richness of communications through greater interactivity between the firm and the customer (Watson et al., 1998). Graham and Hardaker (2000) highlight the role of the Internet in building commercially viable supply chains in order to meet the challenges of virtual enterprises. Philip and Pedersen (1997) attempt to study the ways in which the business community harnesses EDI with the help of a literature survey based on the application.
Armstrong and Hagel (1996) argue that there is beginning of an evolution in supply chain towards online business communities. For example, General Electrics trading process network is an online business community that allows the company to transact about $1 billion dollar worth of business with their suppliers located all over the globe. Big three auto makers in the US
Supply chain management emphasizes the overall and long-term benefit of all parties on the chain through co-operation and information sharing. This signifies the importance of communication and the application of IT in SCM
The literature search was aimed at primarily helping researchers and practitioners in implementing a successful IT system for achieving an effective SCM. With this in mind, we looked at the literature that deals with IT-enabled SCM.
d) When does the bullwhip effect occur? Describe two ramifications of the bullwhip effect? What is the primary solution to the bullwhip effect?
The bullwhip effect can be explained as an occurrence detected by the supply chain where orders sent to the manufacturer and supplier create larger variance then the sales to the end customer. These irregular orders in the lower part of the supply chain develop to be more distinct higher up in the supply chain. This variance can interrupt the smoothness of the supply chain process as each link in the supply chain will over or underestimate the product demand resulting in exaggerated fluctuations.
There are many factors said to cause or contribute to the bullwhip effect in supply chains; the following list names a few:
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