Tuesday, October 14, 2008

9.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID

Traditional supply chain : Driven from the back by producers and manufacturers "driving products to market." - To forecast demand, make-to-stock, and push products downstream toward end customers.
Demand-driven supply networks (DDSNs) : Driven from the front by customer demand. - Companies in a supply chain will work more closely to shape market demand sharing and collaborating information.

Benefits of DDSN :
  • More accurate and detailed demand forecasting.
  • Lower supply chain costs.
  • Improved perfect-order performance.
  • Reduced days of inventory.
  • Improved cash-to-cash performance.
  • DDSN provides a customer-centric approach, as opposed to factory-centric approach.
  • All participants in the supply chain are able to take part in shaping demand, minimizing the bullwhip effect.
  • Probabilistic optimization is used to better deal with uncertainties.
DDSN capabilities provide for agility, adaptability, and alignment.
Agility-the ability to respond quickly to short-term change in the demand and supply equation and manage external disruptions more effectively.
Adaptability-the ability to adjust the design of the supply chain to meet structural shifts in markets and modify supply network strategies, products, and technologies.
Alignment-the ability to create shared incentives that align the interests of businesses across the supply chain.

In general, RFID helps supply chain management a lot. There are only a few limitations of RFID, the cost, atmospheric interference, and limited range(only 30-50 feet at this time). In addition, there might be concerns about the violation of customers' privacy.

B2B exchanges are either private (one buyer and many sellers, or one seller and many buyers) or public (many sellers and buyers). B2B supply chains are provided by electronic exchanges to process communications and transactions. B2B are used mainly to facilitate trading among companies. In contrast, a hub is used to facilitate communication and coordination among business partners, frequently along the supply chain.

The last, directory services can help buyers and sellers manage the task of finding potential partners.

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