PLANNING DEMAND AND SUPPLY IN THE SUPPLY CHAIN

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PLANNING DEMAND AND SUPPLY IN THE SUPPLY CHAIN

• Managing Predictable Variability

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AGENDA

• INTRODUCTION
• RESPONDING TO VARIABILITY (6.1)
• Reasons
• Problems
• Strategies

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AGENDA

• MANAGING SUPPLY (6.2)
• Capacity
• Inventory

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AGENDA

• MANAGING DEMAND (6.3)
• Marketing
• Timing
• General Observations

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AGENDA

• IMPLEMENTING SOLUTIONS (6.3)
• SUMMARY AND CONCLUSIONS

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INTRODUCTION

• Some variability is predictable
• Manage
• Supply
• Demand
• Both
• Profits

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AGENDA

• RESPONDING TO VARIABILITY (6.1)
• Reasons
• Problems
• Strategies

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MANAGING VARIABILITY

• Reasons
• Seasonality
• Promotions
• Product Adoption Rates
• Other Marketing

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MANAGING VARIABILITY

• Problems
• Increase Costs
• Decrease Responsiveness

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MANAGING VARIABILITY

• Strategies
• Manage Supply
• Capacity
• Inventory
• Subcontracting
• Backlogs

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MANAGING VARIABILITY

• Strategies
• Manage Demand
• Price Discounts
• Trade Promotions
• Other Marketing Efforts
• Manage Both for Profits

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AGENDA

• MANAGING SUPPLY (6.2)
• Capacity
• Inventory

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MANAGING SUPPLY

• Capacity
• Time Flexibility
• Flexible Work Hours
• Idle Capacity
• Including
• Part time workforce
• Overtime
• Difficult to Sustain

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MANAGING SUPPLY

• Capacity
• Seasonal Workforce
• Part time
• Difficult to sustain

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MANAGING SUPPLY

• Capacity
• Subcontracting
• Inflexible, low cost permanent facility
• Subcontract peaks
• Variability
• Volume
• Variety

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MANAGING SUPPLY

• Capacity
• Dual Facilities
• Steady, low cost
• Flexible
• Variety
• Volume
• Product Design
• Substitute (not complementary)
• Cross trained
• Pooled is stable

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MANAGING SUPPLY

• Inventory
• Common Components
• Design
• Pooled is stable
• Build High, Predictable
• Postpone
• Speculate

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AGENDA

• MANAGING DEMAND (6.3)
• Marketing
• Timing
• General Observations

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MANAGING DEMAND

• Marketing
• Mix
• Consider
• Revenue
• Cost
• Profit

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MANAGING DEMAND

• Timing
• Promotion on Demand
• Grow
• Steal
• Forward
• Margins
• Holding
• Changing

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MANAGING DEMAND

• General Observations
• Forward favors off peak
• Steal favors peak
• Grow favors peak
• High margin favors peak
• Low margin favors off peak
• High hold favors off peak
• High change favors off peak

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AGENDA

• IMPLEMENTING IN PRACTICE

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IN PRACTICE

• Coordinate
• Take into Account
• Preempt

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SUMMARY AND CONCLUSIONS