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Supply Chain - Decision Phases
Supply Chain - Decision Phases
Supply Chain - Decision Phases
Decision Phases
Section 4 part 2
The Magnitude
The Potential
itself by changing
In 10 years, Wal-Mart transformed
The Impact
The Impact
Study of Supply
Chain Management
Decision Phases in a
Supply
Chain
TIME FRAME
years
3 mo.- 1year
daily
TYPE
Strategic
Tactical
Operational
TYPICAL DECISIONS
Study of Supply
Chain Management
Push/pull view
Customer
Cycle view
defines the
processes
involved and
the owner of
each process
Retailer
Replenishment Cycle
Distributor
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier
Subprocesses in Each
Cycle
Buyer
Supplier markets
the product
Buyer places
an order
Buyer receives
the order
Supplier receives
the order
Supplier supplies
the order
Supplier
nufacturing Process
Order Arrival
roduction Scheduling
Manufacturing/Shipping
Receiving
Manufacturing Cycle
Procurement Process
1. Component Order Arrival
Procurement Cycle 2. Production Scheduling
3. Manufacturing/Shipping
4. Receiving
Differences
1.In the Customer Order Cycle demand is external
2.Scale (and frequency) of an order increases (decreases)
when moving further away from the customer
Each cycle occurs at the interface between two
successive stages
Customer order cycle (customer-retailer)
Replenishment cycle (retailer-distributor)
Manufacturing cycle (distributor-manufacturer)
Procurement cycle (manufacturer-supplier)
Execution is initiated in
response to customer orders
(reactive)
Customer order
arrives
Execution is initiated in
PUSH
PROCESSES anticipation of customer
orders
(speculative)
Processes are divided based on the timing of
their execution relative to a customer order
Processes are divided based on their timing
relative to the timing of a customer order
They key difference is the uncertainty during
the two phases
At the time of execution of a pull process
customer demand is known
At the time of execution of a push process
customer demand is not known (and must be
forecasted)
PULL
Customer
Customer Order Cycle and
Manufacturing Cycle
Manufacturer
PUSH
Procurement Cycle
Supplier
PULL
Customer
Retailer
Replenishment Cycle
Distributor
PUSH
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier