UGBA 10 Lecture Notes - Lecture 15: Iphone 5, Carbon Footprint, Information System
23 May 2018
School
Course
Professor
Supply Chains II March 4
I. Strategic implications: understanding the nature of demand for the product
• Bullwhip effect: where forecasts yield supply chain inefficiencies. Variations are
amplified as one moves upstream in the supply chain and farther from the customer.
o Whe eah eers of the supply hai retailer ad aufaturer adjust
their orders based on their perception of the market instead of the actual
demand. The demand becomes less stable when it moves further up the supply
chain.
o Adjustments cause suppliers to keep extra inventory in order to hedge against
variations and adjustments. This is less efficient and costly to the supply chain,
and also causes consumers to have to pay a higher price for products.
II. Two configurations
1. Efficient supply chains: produce products the most efficient way because demand is
highly predictable (ie: Pringles, Coca Cola); low margins
o Supply chain: make-to-stock (products are ready; emphasized high volume)
2. Responsive supply chains: produce products the quickest way to hedge against
uncertainties in demand because demand is highly unpredictable (ie: Zara); higher
margins
o Supply chain: assemble-to-order (people need to place the order in order for
• Whe the aufaturer is ot i the loop
with customer demands because of the
transfer of information from all the other
parts of the supply chain ie: retailers’
demands)
• Lack of communications with tier 1 (retailer)
• How to improve: better communication and
by identifying the right supply chain for the
product
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