1、MIT Course 1.270 / ESD.273 (Fall 2002 MW 4:00-5:30 Rm 1-246) Logistics & Supply Chain Management PROFESSOR DAVID SIMCHI-LEVI,Uncertainty in Demand Pipelines Ignites Supply Nets 9th October 2002 by Shoumen Datta, Research Scientist Engineering Systems Division, School of Engineering Executive Directo

2、r, Forum for Supply Chain Innovation /innovation,Disclaimer: Opinions expressed in this presentation are that of the author. It does not represent the consensus opinion of MIT as an institution or other faculty that may be directly or indirectly associated with MIT School of

3、 Engineering or MIT Sloan School.,Todays discussion,UNCERTAINTY,URL for powerpoint presentation /innovation Education Course 1.270 / ESD.273,SCM is managing uncertainty.,Nobel Prize in Economics 2002 (announced today, 09 Oct 2002),for having integrated insights from psycholo

4、gical research into economic science, especially concerning human judgment and decision-making under uncertainty,for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms,BODY SCANNER BY TC2,Disruptive Technology

5、?,Invasion of the Body Scanners,Digitally speaking,Part of the Process,PERSONALDIGITALPROFILE,Customer: How will I look in this dress?,Retailer: What should we order for Fall ?,Manufacturer: Whats the next demand?,Data mining,Data Mart,Retailers,Accessories,Jewelry, Shoes,Shiseido, Coach,Harrods, M&

6、S,Gucci, Ballys,Guerlain, Polo,USD, DEM,EURO, INR,YEN, YUAN,TRAVEL,HEALTH,EDUCATION,ARTS & MUSIC,Celebrity,Gallery,World History of,Fashion,The Way We Wore,Data Warehouse,BODY SCAN,eFASHION,EBC,B2B,Anne Klein,Levis, Bebe,Talbots, AX,China, India, Siam,FABRIC,SUPPLIERS,Data,Warehouse,FABRIC,BROKER,IN

7、DEPENDENT,DESIGN,BROKER,Global Design,WAREHOUSE,MEDIA / POP,Tailors,-,Contract Shops,Amateurs,Design Forum,Manufacturing,Tailor Broker,Order,Individual Tailors On-call,Preference Survey,SHIPPING,MALL,a,m,Julia Roberts,Financial,RETURN,CRM,DONATE,Salvation Army,CARE,Goodwill,eBAY,Boutiques,J C Penney

8、,Outlet Stores,Amateur,Models,SHIPPING,ERP,RETAILERS,MACYS, NORDSTROM, BLOOMINGDALES,PERSONAL,PROFILE,SOFTWARE,PERSONAL,PROFILE,ANALYSIS,Portal,Manufacturer,Customer Relationship Management EXPECTATION vs RESULT,Source: AMR Research 1999 October,UNCERTAINTY,U n c e r t a i n t y.,Lack of rule-based

9、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 Research,Source: Forrester,U n c e r t a i n t y.,Cost of Correction Resources Inventory

10、,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 Execution Individual optimisation not SC optimisation Smart-Hub and Dumb-Spoke Configu

11、ration Isolation of Environment of Operation,Source: Forrester,Traditional Adaptive,Source: Forrester,What to do ?,Understand customer need Monitor supply availability Manage supply chain partner performance Decentralize problem solving Monitor corrective actions and feedback Include macro-economic

12、indicators,Evolving Analytical Tools and Early Users,Source: Forrester,Portfolio of Real Options,Source: HP & Forrester,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,U n c e r t a i n t y.Push-Pull Case Study by DSL,How to read diagram

13、s,Uncertainty . Lead Time,Performance .,Performance .,For same lead time, optimized supply chain offers lower cost,Safety Stock Cost vs Lead TimeManaging Financial Cost of Uncertainty,Uncertainty . Procurement,Push-Pull Supply Chains,The Supply Chain Time Line,Customers,Suppliers,PUSH STRATEGY,PULL

14、STRATEGY,Push-Pull Boundary,From Make-to-Stock Model.,Configuration,Assembly,Suppliers,to Assemble-to-Order Model,Configuration,Assembly,Suppliers,PLMa cause of UNCERTAINTY in SCM,Source: Forrester,CPLM .CPFR,Source: Forrester,PLM,Source: Forrester,Whats wrong with this illustration ?,Imagination is

15、 out of focus !,Source: Forrester,Distributed Data in Connected Environments,Evolution ?,Can this evolutionary “vision” succeed ?,Source: Forrester,Real-time Data Layer,D2B,Semantic Web ,802.11 UWB,dERP,Internet 0 Internet 1 Internet 2,AGENTS,S E C U R I T Y,Real Time Distributed Data Inf

16、ra-de-structure with Embedded Agents,,The Semantic Web Bus ( WebVan ! ),Tim Berners-Lee: Semantic Web,,Observation 1998 83 million access the Internet in languages other than English,Projection 2005 70% of 1 billion users may not speak English,FACT 46% US business refuse intl o

17、rder because they lack means to process them.,Japanese,Spanish,German,French,Chinese,Dutch,Korean,Swedish,Italian,1771,1825,1886,1939,1977,1997,Industrial Revolution,1800,Information Evolution,1853,1913,1969,2005,2025,Rapid Adoption,Introduction of Technology,1853,1913,1969,2025,2061,2081,Conceptual

18、 advances occur about twice a century and lead to wealth of nations,Textile,Railway,Auto,Computer,Distributed Intelligence,Nanotech,Source: Norman Poire, Economist,AGENTS,Locating the Push-Pull Boundary,PLAN EXECUTE SENSE RESPOND,DEMAND,EXCEPTION,Supply Chain Evolves to .,Customer,Customers DC,MANUF

19、ACTURER,Raw material SUPPLIERS,Store,Store,Store,Store,Store,Store,Store,Store,DC,DC,DC,Paper,Medical,Cotton,REAL TIME ePC ePC data from RFID Tag,Replenishment needs,Confirmation,Loads,Store Orders,Status,Immediate Replenishment needs,Future shipping needs,Replenishment needs determined from RFID Ta

20、g info “Intelligent Signal”,PORTALS / Exchange,Transport,Customer Info Center,Manufacturer HQ,real time RFID data,Personal Care,Consumer Tissue,Health Care,Information Agent,Inventory Early Warning Agent,TLB Agent,Cross-Docking Agent,Agents based Adaptive Network,Consumption Inventory Data DC to Mfr

21、,Supply Chains Real-time Adaptable Demand Networks,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Industry best now versus what can be achieved: Need to evolve,Day 7 Received, unloaded & stocked on store shelves,SCOTT,Replenished in 7 days,DC

22、,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Consumer Buys SCOTT 2pm Day 0,Future SC : Consumer Purchase,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant

23、,DC,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : RFID “Smart” Tag Read,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Stor

24、e,Store,Store,Store,Store,Store,Future SC : RFID “Smart” Tag Data Transmitted in Real Time,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC :

25、 RFID “Smart” Tag Data Received in Real Time,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : RFID “Smart” Tag Data helps Detect OOS Danger

26、,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : RFID “Smart” Tag Data coupled with Smart Planner,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,P

27、lant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : RFID “Smart” Tag Data coupled with Smart Planner,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day

28、 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : RFID “Smart” Tag Data coupled with Smart Planner,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer C

29、enter,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : Smart Planning segues to TLB,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Sto

30、re,Store,Store,Future SC : SCOTT Paper Tissue received at CDC,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Future SC : CDC Ships to Store,DC,DC,DC,

31、Paper,Medical,Cotton,Plant,DC,Plant,DC,Day 1,Day 3,Day 4,Day 5,Day 6,Day 7,Day 8,Day 2,Day 0,Transport,Customer Center,Manufacturer,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Replenished in 13 hours room for improvement to under 10 hrs,Future SC : RFID “Smart” tag data aids Replenishme

32、nt in 13 hrs,DC,DC,DC,Paper,Medical,Cotton,Plant,DC,Plant,DC,Customer,Store,Store,Store,Store,Store,Store,Store,Store,Replenished in 7 days,Future SC : Can you afford to exclude RFID “Smart” tag data ?,2008: P&G shortens replenishment cycle from 120 days to 1 day 1 ,Source: P&G, Forrester,2008: P&G

33、shortens replenishment cycle from 120 days to 1 day 2 ,Source: P&G, Forrester,2008: P&G shortens replenishment cycle from 120 days to 1 day 3 ,Source: P&G, Forrester,2008: P&G shortens replenishment cycle from 120 days to 1 day 4 ,Source: P&G, Forrester,2008: P&G shortens replenishment cycle from 120 days to 1 day 5 ,Source: P&G, Forrester,2008: P&G shortens replenishment cycle from 120 days to 1 day 6 ,