Question

Designing and Managing the Supply Chain David Simchi-Levi; Philip Kaminsky; Edith Simchi-Levi

Page 428: Case: S&OP “Evolution” at Adtran

What were three lessons they learned from the evolution of their S&OP?

Answer 1

Using the ISBN (0-07-028594-2) contained in the normal spot, just inside the front cover, he completed the college bookstore solicitation form. A student visited the reviewer several days before the class started, anxiously inquiring: "Is Thomas H. Courtney's Mechanical Action of Materials, 2'' edition the textbook for SCM?" An inquiry soon uncovered the mistake of the publisher Courtney's ISBN was printed where Simchi-Levi's should have been. Simchi-Levi describe SCM as 'a collection of methods used to successfully combine vendors, distributors, warehouses and stores to produce and deliver products in the right amounts, in the right locations and in the right time, to reduce system-wide costs while meeting service level criteria. Notice their supply chain, a.k.a. logistics network terminates at the retail outlet. This neglects modern supply chains, business-to-consumer (B2C), which bypass retail stores and drastically alter the end-consumer logistics position. It is also important to remember that the authors are re-labellers,' because they do not distinguish between logistics and supply chain management. Even their interpretation of SCM correlates closely to the logistics management concept of CLM. The Simchi-Levi, et al. warehousing model focuses on the number, location and size of warehouses, along with customer matched goods. No mention is made here of qualitative factors such as quality of life and environmental considerations. Meanwhile, the inventory chapter is dominated by one illustration of a single warehouse inventory, with presentations of the models of the economic order quantity (EOQ) and the reorder point (ROP). At this point, the reviewer was shocked to find nothing on the planning of distribution requirements (DRP), as DRP discusses the issue of the echelon inventory within a supply chain. This supply chain once again excludes the household or end-consumer level. This is despite the downstream or forward orientation of the book, and the de-emphasis on upstream problems between producers and suppliers. The highlight of this chapter and perhaps the entire book is its bullwhip effect analysis, which implies that demand volatility increases as one goes up in the supply chain. Simchi-Levi, et al. measure the bullwhip effect and outline the following methods of dealing with the effect: reducing (predicting) uncertainty by exchanging knowledge, reducing volatility in demand, leading time reductions and establishing strategic alliances. The book offers a computerized beer game, listed in Appendix A and available on a companion CD, to further illustrate and explore the Bullwhip effect.

• Technical means, management process, and management tools are the main shortcomings of risk management in the agricultural supply chain. Larson has shown that the supply chain for agricultural products is itself a high risk, and the quality and safety risk of agricultural products runs across the entire supply chain process. Yan Bo demonstrates that systematic risk evaluation is important regularly and a timely modification of the management strategy to ensure the secure operation of the supply chain as there are always risks in the supply chain of agricultural products.
• Time-series forecasting is an important topic for many industrial applications, such as retail demand forecasting, financial forecasts, traffic prediction or weather patterns. Modern data-sets spanning several thousand time-points may have millions of linked time series. In particular, demand forecasting plays a key role in most organizations' financial, tactical, and strategic decisions. Probabilistic forecasts, for example, are required for inventory management, staff scheduling, and topology planning (Larson et al., 2001). More broadly, they are a crucial technology for most supply chain optimisation aspects.
• Technical means, management process, and management tools are the main shortcomings of risk management in the agricultural supply chain. Larson has shown that the supply chain for agricultural products is itself a high risk, and the quality and safety risk of agricultural products runs across the entire supply chain process. Yanbo demonstrates that systematic risk evaluation is important regularly and a timely adjustment of the management strategy to ensure the secure operation of the supply chain as there are always risks in the supply chain of agricultural products.