Supply Chain Risk Management

Segmenting Supply Chain Strategies

nospam@example.com (Daniel Stengel) — Wed, 01 Sep 2010 08:05:00 +0200

For researchers and practitioners alike it is important to differentiate supply chain strategies.

Introduction
Not only Fisher (1997) showed, that there is no one-fits-all supply chain. But what are the criteria for should be used for supply chain segmentation?
Fisher focusses on on the product only, and he concludes, that a standard/functional product should be processed by a lean supply chain and innovative products by agile supply chains.

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Supply Chain Risk Management Dissertations (No. 1)

nospam@example.com (Daniel Stengel) — Mon, 30 Aug 2010 08:37:00 +0200

Today I start an irregular series on doctoral dissertations on Supply Chain Risk Management. An immense effort and dedication is spent on these works only to find the results hidden in libraries. So the goal is raise interest in their research.

Author / Topic
The first dissertation was written by Ingo Schneider in 2009 as his doctoral thesis at the Helmut Schmidt University in Hamburg, Germany. It was published by Shaker, Aachen and can be ordered here from amazon.de or your local library. The title translates in:
Risk as Strategic Part of the Supply Chain Design: Analysis and Case Study in the German Automobile Industry
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Designing Supply Chain Strategies

nospam@example.com (Daniel Stengel) — Wed, 25 Aug 2010 08:54:00 +0200

In his fourth video podcasts Professor Richard Wilding talks about Supply Chain Strategies. I found it quite interesting, so I would like to give you a short summary of it here. If you are interested you can just download the podcast for free, you find a link in the reference section.

Hierarchy
Strategies are usually broken down into smaller pieces so that every function within a company has its own individual goals. This leads to some kind of hierarchy like:

Corporate Strategy
Competitive Strategy
for each market segment, mostly driven by marketing
Supply Chain Strategy
derived from the competitive strategy, has to be developed together with marketing to secure alignment

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Measuring the Bullwhip Effect in Supply Chains

nospam@example.com (Daniel Stengel) — Mon, 23 Aug 2010 08:46:00 +0200

The bullwhip effect in supply chains has been around for some time now. The term "bullwhip effect" originated at Procter & Gamble, and is defined as: demand amplification across echelons within a supply chain. This describes the effect that end customer demand may be very static (as for "Pampers" by Procter & Gamble), but the demand experienced by the manufacturer or supplier shows amplified demand variations. (Fransoo and Wouters (2000))

Causes of the Bullwhip Effect
Lee et al. (1997) first analyzed the causes of the bullwhip effect:

Demand forecast updating
Demand forecast usually are based on the orders of the preceding echelon and not on the actual customer demand
Order batching
Orders are usually aggregated to batches to save cost.
Price fluctuations
Promotions and other effects can lead to price fluctuations of the product. When the price is perceived to be lower, orders go up and vis-versa.
Rationing and shortage gaming
For some products (eg. new iPhone) which may be short in supply, game theory suggests that it might be rational to order more than actually needed, since the number of delivered products usually is a percentage of the number of products ordered.

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Identifying important Activities within the SCOR Process Categories

nospam@example.com (Daniel Stengel) — Mon, 16 Aug 2010 12:07:00 +0200

The Supply Chain Operations Reference (SCOR) model has been developed by the Supply Chain Council to provide a best-practice framework for supply chain management practices and processes with the goal to increase performance.

SCOR
The SCOR model consists of five major process categories: Plan, Source, Make, Deliver and Return
Starting from that best practice processes are defined up to level three.

Supply Chain Operations Reference Model (SCOR, SCC 2000)

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Designing the Green Supply Chain

nospam@example.com (Daniel Stengel) — Mon, 09 Aug 2010 13:20:00 +0200

Nowadays green logistics is an often heard buzz-word, but already eleven years ago Beamon published an article about the challenges with creating Green Supply Chains.

Traditional vs. Extended Supply Chain
A traditional supply chain has been mostly a one-way street. The issues analyzed were eg. the number of echelons, buyer-supplier relationships and inventory levels.
As a basis the extended supply chain has to consider at least the recycling / re-use and remanufacturing processes to be complete. More important though the strategy of the company has to be adjusted to include environmental aspects as waste, resource / energy use and pollution as well.

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Learning from the Military how to handle Disruptions

nospam@example.com (Daniel Stengel) — Mon, 02 Aug 2010 10:45:00 +0200

Disruptions are a fact of life not only since the Supply Chain literature gained awareness of it. So some institutions in fact specialized on handling disruptions as their core competency.
The article "Responding to Disruptions in the Supply Network - from Dormant to Action" tries to transfer the knowledge and best practices present at the military and humanitarian organizations to Supply Chain Management.

Methodology
The authors (Kovács and Tatham) are using case research and a resource based view to find common patterns in military and humanitarian practices to efficiently and effectively act on disruptions.

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Summary: Getting the most out of your conference visits

nospam@example.com (Daniel Stengel) — Sun, 25 Jul 2010 11:23:00 +0200

Are you planning to visit a conference in the near future? Scott Berkun and many other authors write about how to get the most out of your visit. Here I am summarizing the key insights.
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Perception of Supply Risk

nospam@example.com (Daniel Stengel) — Fri, 16 Jul 2010 18:06:00 +0200

One of the most published supply risk researchers is George A. Zsidisin. In his 2003 article he describes the characteristics of inbound supply that affect the perception of risk.

Supply Risk
The author defines supply risk as

the potential occurrence of an incident associated with inbound supply from individual supplier failures or the supply market, in which its outcomes result in the inability of the purchasing firm to meet customer demand or cause threats to customer life and safety.

He therefore includes the probability and significance of an adverse event.

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Disruption-Management Strategies for Short Life-Cycle Products

nospam@example.com (Daniel Stengel) — Sat, 10 Jul 2010 09:05:00 +0200

In his 2009 paper Brian Tomlin analyzes strategies to mitigate disruption risks in a three echelon supply chain.

Setting
Focus in his research is a single company, with its suppliers and customers. The objective is to maximize expected utility, while demand and supply are uncertain. There are two products available which can be used as substitutes. The time horizon for the decision maker is one season where the products can be sold.

Three different sourcing structures are considered.

Different sourcing structures (Source: Tomlin 2009)

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