謝儒生 龐繼元 謝崇文 謝正裕 鄭瑛彬 賴慧明 葉南輝 許宗益

1. The Bullwhip Effect in Supply Chain 謝儒生 龐繼元 謝崇文 謝正裕鄭瑛彬 賴慧明 葉南輝 許宗益

2. Distorted information from one end of a supply chain to the other can lead to tremendous inefficiencies Excessive inventory investment Poor customer service Lost revenues Misguided capacity plans Ineffective transportation Missed production schedules Bullwhip Effect Also Known as the “whiplash” or the “whipsaw” effect Case: - P&G’s Pampers &order to 3M - HP printer distorted the demand information

3. Increasing Variability of Orders

4. Distorted information has led every in the supply chain The plant warehouse Manufacturer’s shuttle warehouse Manufacturer’s market warehouse Distributor’s central warehouse Distributor’s regional warehouse Retail store’s storage space Total supply chain may contain more than one year’s supply Stockpile because of the degree of demand uncertainties and variabilities

5. Minimum Stock Process Variance Supply Variance Demand Variance Root Causes of High Inventory • High tech companies can realize major savings by reacting to fluctuations in demand • Acer lost more than 1 billion on inventory in 1996.

6. Bullwhip Effect • Demand forecast updating • Order batching • Price fluctuation • Rationing and shortage gaming • Information sharing • Demand information thru downstream site to upstream site • Channel alignment • Transportation • Inventory planning • Pricing • Ownership • Operational efficiency • Reduce cost • Lead time

7. Forecasting for production scheduling, capacity planning, inventory control, MRP Forecasting is offten based on order history Demand signal processing Downstream operation order -> Upstream manager readjust demand forecast + safety stock -> Place orders to suppliers Use the potential smoothing to update the forecast across suppliers Demand forecast updating Issues Solution • Make demand data from downstream site available to the upstream site & both of them can update the forecast • Use EDI to share data • Upstream site could control Re-supply from upstream to down stream and update the necessary forecast (VMI or CRP) • Get demand information about downstream site by bypassing it • Just-in-time replenishment

8. Order placed VS Actual Sales

9. Batches or accumulate demands before issuing and order, weekly, biweekly or monthly Time and cost of processing an order MRP run monthly Economics of transportation End-of-quarter or End-of-year surge Order batching Issues Solution • Devise strategies that lead to smaller batches or more frequent supply • Using EDI to lower the transaction cost for more frequently orders • Order frequency is much higher, the frequency of deliveries to the distributors remains unchanged • Using third-party logistics

10. Promotions like price discounts, quantity discounts, coupons, rebates result in price fluctuation Buying at low price and stop buying until it has depleted its inventory Buying pattern does not reflect its consumption pattern Rational decision compare inventory cost and price differential Build huge piles of inventory to anticipate big swings in demand Dumbest marketing ploy ever Price Fluctuation Issues Solutions • Reduce both the frequency and the level of wholesale price discounting • Establish a uniform wholesale pricing policy • Use CAO (Computer-Assisted ordering) or CRP (Continuous Replenishment Program) to enable companies to recognize the excessive costs of forward buying • Implement ABC system

11. Knowing that the manufacture will ration when the product is in short supply, customer exaggerate their real needs whey they order Orders will suddenly disappear when order cools Customers overaction for anticipating shortage Overlap ordering and accept the firsts supplier and cancel others Suppliers made decision based on the little information Shortage Gaming Issues Solutions • When a supplier faces a shortage instead of allocating products based on orders, it can allocate in proportion to past sales records • Sharing of capacity and inventory information • Work with customers to place orders well in advance of the sales season • Penalty for exaggerate gaming

12. Counteract the Bullwhip effect by eBusiness technology

13. Latency = time it takes to respond to an input Zero-latency = Immediate exchange of information across geographical, technical and organizational boundaries Divisions, departments even groups in external business partners are treated as cooperating subsystems, regardless of where they are located As soon as new information is captured by any application system in any workgroup, it is made available to all other interested parties 理想的目標: 零延遲(Zero-latency)的企業營運

15. Maximizing Customer Satisfaction & Profits through optimization of Inventory Level, Product Mix, Re-order Cycles & Production Lead-time Inventory + - Product Mix Re-order Frequency + - + - + - Lead-time The Problem Statement

16. FG = Zero Inventory + - Product Mix Re-order Frequency + - + - + - Lead-time Squeezing the Model for Profitability & Customer Satisfaction Standard Parts & Modules At daily or hourly Shorten total Production Cycle

17. OEM Supplier MFG Supplier Dist Dist MFG Supplier OEM e-Supply Chain Integration Distributors OEM Customers Resellers Inter-Enterprise Integration Inter-Enterprise Integration Intra-Enterprise Integration

18. APS e-Supply Chain Community Suppliers-Suppliers Supplier Community Enterprise Customers APS APS APS CDP GRA GSP APS APS APS APS MCP SCP APS APS

19. Extended eCollaboration Fulfillment Collaboration Fulfillment Collaboration Demand & Supply Collaboration Manuf. Collaboration Design Collaboration eData Transport eData Transport eData Transport eFulfillment eProcument eDemand eSourcing/ eRFQ eCAD Transport. Plan eSupply eCSM Process Collaboration Process Collaboration

20. Public Process Internet EAI EAI Private Process Process Collaboration SUPPLIER (Spoke) MANUFCATURER (Hub) Distributor E-mail CMC/PDM ADP. Warehouse ERP ADP. E-SCM ADP. Supplier ERM ADP. XML/Rosettanet CRM ADP.

21. Planning Other Mfg Internet Process Broker ERP Order Proc Planning Process Broker Financial Process Broker PDM Purchasing Process Collaboration Private Process Public Process Public Process Private Process Private Process

22. Manuf. Collaboration Manuf. Collaboration Design Collaboration Design Collaboration eSourcing/ eRFQ eSourcing/ eRFQ eCAD eCAD eCSM eCSM Extended eCollaboration Fulfillment Collaboration Fulfillment Collaboration Demand & Supply Collaboration eData Transport eData Transport eData Transport eFulfillment eProcument eDemand Transport. Plan eSupply Process Collaboration

23. Marketing Project Team Sales RD ME IE QA PUR MPL FIN 零件評估報告 品質計劃書 製造作業規範 檢驗規範 安規報告 產品評估報告 Prototype Release 零件評估報告 品質計劃書 製造作業規範 檢驗規範 安規報告 產品評估報告 Prototype Release 零件評估報告 品質計劃書 製造作業規範 檢驗規範 安規報告 產品評估報告 Prototype Release Project Management Product Design Plan 競爭對手分析 成本預估 FMEA 產品設計圖 CAE分析 BOM Mock up sample Tooling ECR ECO 設計規劃書 開發日程表 試驗報告 Pilot Release 量產發行 Production Release The Flow of New Product Introduction Design & Manufacturing Collaboration Feasibility Study Design Panning Design Function Verif. Sample Approval Improve Manuf. Mass Prod.

24. PDX PDX Compaq R&D Manuf. share product content data Procurement PDX PDX Supplier A Supplier B Design & Manufacturing Collaboration iCM Agile Anywhere Agile Anywhere Will auto to update the AB’s DB after receiving a PDX Agile Buyer • Build Packages • Item Master • BOM • AML • Attachments • ECO Packages • Deviations • RFQs Agile eXpress Viewer Content

25. Supply Changes • Shortages • Component EOL • Quality • Allocations • Pricing • Lead Time • Demand Changes • Cost • Performance • Features • Variants Design & Manufacturing Collaboration Product Content, ECOs, MCOs, Deviations, …. Who will supply Components? / How to maintain the Document Parts, BOMs, AMLs, Specifications, SW, Drawings

26. R&D 工程師開發一新產品或是對一原有的產品做變更,產品資料將自動傳遞至採購人員 採購員將新的產品資訊對合格供應商做詢價(RFQ) 採購員在收到廠商的報價之後,決定供應商並下定單 供應商收到RFQ 之後可直接連接至AA查閱產品相關資料及圖面以提供正確的報價資料 Procurement PDX Supplier A Supplier B Design & Manufacturing Collaboration Agile Anywhere RFQ Agile Buyer Response RFQ Agile eXpress Viewer RFQ

27. Demand & Supply Collaboration Demand & Supply Collaboration eProcument eProcument eDemand eDemand eSupply eSupply Extended eCollaboration Fulfillment Collaboration Fulfillment Collaboration Manuf. Collaboration Design Collaboration eData Transport eData Transport eData Transport eFulfillment eSourcing/ eRFQ eCAD Transport. Plan eCSM Process Collaboration

28. Supplier PDP - Product Development Planner GSP - Global Strategic Planner SCP - Supply Chain Planner MCP - Material and Capacity Planner CSP - Collaborative Supply Planner CDP - Collaborative Demand Planner CSP - Collaborative Supply Planner CDP - Collaborative Demand Planner RDS - Reactive Dynamic Scheduler GRA - Global Real-Time ATP Customer CEP SCC - Supply Chain Controller Supplier - Demand Collaboration CRM ERP PDM EAI MES

29. Internet EAI EAI eProcurement SUPPLIER (Spoke) MANUFCATURER (Hub) Distributor E-mail CMC/PDM ADP. Warehouse ERP ADP. E-SCM ADP. Supplier ERM ADP. XML/Rosettanet CRM ADP.

30. ePO eBox 傳 送 控 管 作 業 報 價 單 作 業 預 測 訂 單 作 業 對 帳 單 作 業 收 料 驗 收 作 業 送 貨 通 知 作 業 訂 單 作 業 作 業 傳 送 控 管 作 業 對 帳 單 作 業 出 貨 通 知 作 業 訂 單 作 業 Internet EAI eProcurement SUPPLIER (Spoke) MANUFCATURER (Hub) e-PO Distributor E-mail e-PO CMC/PDM ADP. e-Box Warehouse ERP ADP. E-SCM ADP. Supplier ERM ADP. XML/Rosettanet CRM ADP.

31. Stream-Lined Supply Chain Information Network Trading Exchange Intelligent Marketplace Portal Traditional Supply Chain Information Network

32. Thanks