Supply Chain

7. Why can changes within a supply chain disrupt the normal flow of goods and services within a supply chain?

A third factor contributing to the Bullwhip Effect is the specific production process of pasta. Barilla cannot re-act to demand changes quickly enough, due to production restrictions as e.g. heat and humidity specifications. That means, if a product is out of stock it cannot be produced and delivered immediately.

This affects the whole company with specific attention to customer service, warehouses, and IT to keep the business moving.

Without 100% deliverables on-hand this could create a bullwhip in the supply chain. A bullwhip effect is point to a lack of synchronization among supply chain members. This happens when changes in sales ripples backward (e.g. bullwhip) because the supply patterns do not match the demand patterns causing shortages and delays.

For example, a company purchases more widgets than normal, so the widget manufacturer increases the amount of widgets they normally make, thus creating a surplus. What the widget manufacturer does not know is the company that purchased the widget had a sale on widgets and it was a one-time large order, thus creating an illusion that widget sales are increasing. This is an issue that could impact the tool manufacturer if there is a specific tool that goes on sale and one of the suppliers increases their production of said tool.

For example, if the weather temperatures suddenly increase, there would be an increase in cooling needs which raises demand for electricity but not for other heating products. Producers could have difficulties producing enough energy supply for all those in need of cool air because they did not foresee in time to produce more. This difficulty in production would raise demand and costs, affecting both suppliers and consumers.

Supply management is responsible for putting pressure on marketing to share forecasts so that supply management can update manufacturing schedules at the firm's suppliers when sales forecasts change.

For Customer service, supply chain is all about proving the logistics of delivering the right products at the right time. Sounds simple but there are factors such as: reordering the product, supplier inventory is not enough, no consignment storage, delivery time not met, redesigning the planning. This challenge is effective and significant on both downstream and upstream of the process it affects the downstream as business partners are the one being effected upon the ordering and delivery of the product as without the product delivered they can’t start the next phase of their process; as for upstream this is extremely effective not just as revenue stream but to honor the continuous partnership shipping and delivering the product to customer is critical. Cost control of operating expense in direct and indirect commodity costs, logistic agile costs under pressure upon rising fuel/energy and freight cost, global business partners, technology investment, labor cost of recruits and manufacturing floor, and always the

A distortion of information about the demand for a product as it passes from one entity to the next across the supply chain is called the ________ effect.

Links in the chain are frequently in a position of being out of stock on some products and over-stocked on others.

Added complexity is also evident when more than one factory is required to supply the whole market area, such as two factories in Sumatera are required to supply the whole market area on Sumatera Island. This makes it more complex as it thereby requires the factories to evenly allocate their finished products to satisfy the demand of consumers, where inventory levels should be kept even and not overflowing in an excess of stock.

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

Bad forecasting by Distributors: The distributors did not have forecasting systems or sophisticated analytical tools for determining order quantities and this resulted in bad forecasts.

Christopher (1992) describes a supply chain as a network of organizations that are involved, through upstream (i.e. supply sources) and downstream (i.e. distribution channels) linkages, in the different processes and activities that produce value in the form of products and services in the hands of the eventual consumers. Supply chain management is the efficient management of the end-to-end process, which starts with the design of the product or service and ends with the time when it has been sold, consumed, and finally, discarded by the consumer. This complete process includes product design, procurement, planning and forecasting, production, distribution, fulfillment, after-sales support, and end-of-life disposal. The Supply-Chain Council defines supply chain management as the "effort involved in producing and delivering a final product from the supplier's supplier to the customer's customer (Larson et al., 1998). Supply chain management is customer oriented and is aimed towards the integration of business planning and matching supply and demand across the entire supply chain for bringing instantly, costless, seaming less and frictionless products to

She/he is an integral part of the supply chain planning and analytics of organization distributor center. This position will serve as the business matter expert in the area of supply chain and will be responsible for managing multiple work streams for supply chain modeling and analysis in the context of redistribution center, global sourcing initiative, steady state optimization and other analysis requests. The Supply Chain Analyst will work with external and internal customers on various projects to propose an optimized future state supply chain.