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What is the increase in the variance of replenishment orders farther up the supply chain away from the end customer?
The Bullwhip effect
Causes of the bullwhip effect
1. Demand forecasting (errors, info delays, long lead times) 2. Order batching (fixed order costs, seek transportation econ of scale,quantity discounts) 3. Price fluctuations, promotions, and forward buying (sales & promotions, sales force incentive structure) 4.Rationing & gaming (inf…
Where is the MUDA during bullwhip?
- Mistmatch between demand & supplier - Silo's created by suppliers
If Bullwhip measure is >1
Variance amplification is present
If Bullwhip measure is = 1
No amplification is present
If Bullwhip measure is <1
Implies a smoothing or dampening scenario as orders move up the supply chain to suppliers
What is the objective of supply chain management
The objective of SC management is to coordinate activities within the supply chain to maximize the supply chain's competitive advantage and benefits to the ultimate consumer
Transportation modeling
An iterative procedure for solving problems that involves minimizing the cost of shipping products from a series of sources to a series of destinations
The Nearest Neighbor procedure
1. Start with a node at the beginning of the tour (the depot node) 2. Find the node closest to the last node added to the tour 3. Go back to step 2 until all nodes have been added 4. Connect the first and last nodes to form a complete tour
5S's of lean production
1. Sort 2. Simplify 3. Shine 4. Standardize 5. Sustain
Kanban
Japanese word for card is an authorization for the next container of material to be produced pulls material through processes
Formula for Takt time
Takt time = Total work time available/Units required

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