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1、MIT Course 1.270 / ESD.273 (Fall 2002 MW 4:00-5:30 Rm 1-246)Logistics & Supply Chain Management PROFESSOR DAVID SIMCHI-LEVIUncertainty in Demand Pipelines Ignites Supply Nets9th October 2002by Shoumen Datta, Research ScientistEngineering Systems Division, School of EngineeringExecutive Director, For
2、um for Supply Chain Innovation/innovationDisclaimer: Opinions expressed in this presentation are that of the author. It does notrepresent the consensus opinion of MIT as an institution or other faculty that may bedirectly or indirectly associated with MIT School of Engineering or MIT Sloan School.To
3、days discussion UNCERTAINTY URL for presentation /innovationEducation Course 1.270 / ESD.273SCM is managing uncertainty.Nobel Prize in Economics 2002 (announced today, 09 Oct 2002)for having integrated insights from psychological research into economic science, especially concerning human judgment a
4、nd decision-making under uncertaintyfor having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms Daniel Kahneman Vernon L. Smith 1/2 of the prize 1/2 of the prize USA and Israel USA Princeton University Princeton, NJ
5、, USA George Mason University Fairfax, VA, USA b. 1934b. 1927BODY SCANNER BY TC2Disruptive Technology ?Invasion of the Body Scanners Digitally speaking Part of the ProcessPERSONALDIGITALPROFILECustomer: How will I look in this dress?Retailer: What should we order for Fall ?Manufacturer: Whats the ne
6、xt demand?Data miningData MartRetailersAccessoriesJewelry, ShoesShiseido, CoachHarrods, M&SGucci, BallysGuerlain, PoloUSD, DEMEURO, INRYEN, YUANTRAVELHEALTHEDUCATIONARTS & MUSICCelebrityGalleryWorld History ofFashionThe Way We WoreData WarehouseBODY SCANeFASHIONEBCB2BAnne KleinLevis, BebeTalbots, AX
7、China, India, SiamFABRICSUPPLIERSDataWarehouseFABRICBROKERINDEPENDENTDESIGNBROKERGlobal DesignWAREHOUSEMEDIA / POPTailors-Contract ShopsAmateursDesign ForumManufacturingTailor BrokerOrderIndividual Tailors On-callPreference SurveySHIPPINGMALLamJulia RobertsFinancialRETURNCRMDONATESalvation ArmyCAREG
8、oodwilleBAYBoutiquesJ C PenneyOutlet StoresAmateurModelsSHIPPINGERPRETAILERSMACYS, NORDSTROM, BLOOMINGDALESPERSONALPROFILESOFTWAREPERSONALPROFILEANALYSISPortalManufacturerCustomer Relationship ManagementEXPECTATION vs RESULTSource: AMR Research 1999 OctoberUNCERTAINTYU n c e r t a i n t y. Lack of r
9、ule-based resolution: expectation vs result Financial Impact Cost of Correction Side Effects U n c e r t a i n t y. Financial Impact Opportunity lost: unable to ramp up Economic loss: unable to ramp down Source: Forrester ResearchSource: ForresterU n c e r t a i n t y. Cost of Correction Resources I
10、nventory U n c e r t a i n t y. Side Effects (undesirable) Tackle only symptoms Negative fall out EBM in SCM offers little ADAPTABILITY to SENSE and RESPOND( Supply Chain Event mis-Management )Insulation of Planning from ExecutionIndividual optimisation not SC optimisationSmart-Hub and Dumb-Spoke Co
11、nfigurationIsolation of Environment of OperationSource: ForresterTraditional AdaptiveSource: ForresterWhat to do ?Understand customer needMonitor supply availabilityManage supply chain partner performanceDecentralize problem solvingMonitor corrective actions and feedbackInclude macro-economic indica
12、torsEvolving Analytical Tools and Early Users Source: ForresterPortfolio of Real OptionsSource: HP & ForresterU n c e r t a i n t y. Financial Impact Opportunity lost: unable to ramp up Economic loss: unable to ramp down U n c e r t a i n t y.Push-Pull Case Study by DSLHow to read diagramsUncertaint
13、y . Lead TimePerformance .Performance .For same lead time,optimized supply chainoffers lower costSafety Stock Cost vs Lead TimeManaging Financial Cost of UncertaintyUncertainty . ProcurementPush-Pull Supply ChainsThe Supply Chain Time LineLow Uncertainty High UncertaintyCustomersSuppliersPUSH STRATE
14、GYPULL STRATEGYPush-Pull BoundaryFrom Make-to-Stock Model.ConfigurationAssemblySuppliersto Assemble-to-Order ModelConfigurationAssemblySuppliersPLMa cause of UNCERTAINTY in SCM Source: ForresterCPLM .CPFRSource: ForresterPLMSource: ForresterWhats wrong with this illustration ?Imagination is out of f
15、ocus !Source: ForresterInventory ManagementOrder ProcessingE-BusinessVendor ManagementTaxElectronic CommerceFinancialsMarketingExecutive InformationInventory ProgramsAccounts PayableStock TransfersWarehouseInbound QA1ReceivingRepair OrdersPurchasingAccounts ReceivableOutbound QAShippingOrder Service
16、sQuotingCreditCustomer ManagementDistributed Data in Connected EnvironmentsEvolution ?Can this evolutionary “vision succeed ? Source: ForresterReal-time Data LayerD2BSemantic Web802.11UWBdERPInternet 0 Internet 1 Internet 2 AGENTSS E C U R I T YReal Time Distributed Data Infra-de-structure with Embe
17、dded AgentsThe Semantic Web Bus ( WebVan ! ) Tim Berners-Lee: Semantic Web Observation 199883 million accessthe Internet inlanguages otherthan EnglishProjection 200570% of 1 billionusers may notspeak EnglishFACT46% US businessrefuse intl orderbecause they lack means toprocess them.JapaneseSpanishGer
18、manFrenchChineseDutchKoreanSwedishItalian177118251886193919771997Industrial Revolution 1800Information Evolution 18531913196920052025RapidAdoptionIntroductionofTechnology185319131969202520612081Conceptual advances occur about twice a century and lead to wealth of nations TextileRailwayAutoComputerDi
19、stributedIntelligenceNanotechSource: Norman Poire, EconomistAGENTSLocating the Push-Pull BoundaryPLANEXECUTESENSERESPONDDEMANDEXCEPTIONSupply Chain Evolves to .CustomerCustomers DCMANUFACTURERRaw material SUPPLIERSStoreStoreStoreStoreStoreStoreStoreStoreDCDCDCPaperMedicalCottonStorePlantDCPlantDCREA
20、L TIME ePCePC data from RFID TagReplenishmentneedsConfirmationLoadsStore OrdersStatusImmediateReplenishmentneedsFutureshipping needsReplenishmentneeds determinedfrom RFID Tag info“Intelligent SignalPORTALS / ExchangeTransportCustomer Info CenterManufacturerHQreal timeRFID dataPersonal CareConsumer T
21、issueHealth CareInformationAgentInventory Early Warning AgentTLB AgentCross-Docking AgentAgents based Adaptive NetworkConsumptionInventoryDataDC to MfrSupply Chains Real-time Adaptable Demand NetworksDCDCDCPaperMedicalCottonPlantDCPlantDCCustomerStoreStoreStoreStoreStoreStoreStoreStoreStoreIndustry
22、best now versus what can be achieved: Need to evolve Day 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0=Product =InfoDay 7Received, unloaded & stocked on store shelvesSCOTTDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0=Non-value-added time=Product=InfoReplenished in 7 daysPortalTransportCustomerCenterManu
23、facturerReplenished in 13 hoursroom for improvement to under 10 hrsDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStoreConsumerBuys SCOTT 2pm Day 0=Product =InfoFuture SC : Co
24、nsumer PurchaseDCDCDCPaperMedicalCottonPlantDCPlantDCPortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =InfoRFID Smart Tag atPOS read 2pm Day 0SCOTTDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0Future SC : RFID “Smart Tag ReadDCDCDCPaperMedicalCott
25、onPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =Info0101100110111010001112pm Day 0RFID Smart tag datatransmitted instantly010110011011101000111Future SC : RFID “Smart Tag Data Transmi
26、tted in Real TimeDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =Info0101100110111010001110101100110111010001112:10pm Day 0Replenishment needs receivedby schedul
27、ing (TLB) systemsFuture SC : RFID “Smart Tag Data Received in Real TimeDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =Info0101100110111010001112:35 pm, Day 0Sys
28、tem detects OOS danger at customer & co-ordinates rapid-response shipment (reallocation of en route load evaluated)010110011011101000111010110011011101000111010110011011101000111Future SC : RFID “Smart Tag Data helps Detect OOS DangerDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day
29、 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =InfoSmart Plannerinterrogates demand filterFuture SC : RFID “Smart Tag Data coupled with Smart PlannerDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day
30、2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =InfoSmart Planner integrates info:current inventory, shipment, planning Future SC : RFID “Smart Tag Data coupled with Smart PlannerDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5D
31、ay 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =InfoSmart Planner executes changes, broadcasts plan, exceptions, optionsFuture SC : RFID “Smart Tag Data coupled with Smart PlannerDCDCDCPaperMedicalCottonPlantDCPlantDCDay
32、 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =Info4pm Day 0Trailer loadedFuture SC : Smart Planning segues to TLB DCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0Por
33、talTransportCustomerCenterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =Info10pm Day 0Customer DC receives SCOTTSCOTTFuture SC : SCOTT Paper Tissue received at CDCDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCe
34、nterManufacturerCustomerStoreStoreStoreStoreStoreStoreStoreStoreStore=Product =Info11pm Day 0Customer DC ships SCOTTSCOTTFuture SC : CDC Ships to StoreDCDCDCPaperMedicalCottonPlantDCPlantDCDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0PortalTransportCustomerCenterManufacturerCustomerStoreStoreStoreSt
35、oreStoreStoreStoreStoreStore=Product =InfoReplenished in 13 hoursroom for improvement to under 10 hrs3am Day 1Received, unloaded & stocked on store shelvesSCOTTFuture SC : RFID “Smart tag data aids Replenishment in 13 hrsDCDCDCPaperMedicalCottonPlantDCPlantDCCustomerStoreStoreStoreStoreStoreStoreSto
36、reStoreStoreDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0=Product =Info3am Day 1Received, unloaded & stocked on store shelvesSCOTTDay 1Day 3Day 4Day 5Day 6Day 7Day 8Day 2Day 0=Non-value-added time=Product=InfoReplenished in 7 daysPortalTransportCustomerCenterManufacturerReplenished in 13 hoursroom f
37、or improvement to under 10 hrsFuture SC : Can you afford to exclude RFID “Smart tag data ?2021: P&G shortens replenishment cycle from 120 days to 1 day 1 Source: P&G, Forrester2021: P&G shortens replenishment cycle from 120 days to 1 day 2 Source: P&G, Forrester2021: P&G shortens replenishment cycle from 120 days to 1 day 3 Source: P&G, Forrester2021: P&G shortens replenishment cycle from 120 days to 1 day 4 Source: P&G, Forrester2021: P&G shortens replenishment cycle from 120 days to 1 day 5 Source: P&G, Forrester2021: P&G shortens replenishment cycle from 120
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