The article reviewed here takes a look at typical biases in supply chain demand planning and how to avoid it. This work could prove very valuable for many companies who rely on manually adjusted forecasts.
Usually the forecasting process uses two steps:
1) statistical forecast by the forecasting system
2) manual adjustment to include additional effects (eg. additional analysis of demand pattern not included in step 1)
Mitigation strategies for supply chain risks have have been discussed in the literature for a long time now. Khan and Burnes (2007) mention several strategies like:
Multiple sources of supply vs single sourcing
Buffers
Risk sharing/knowledge transfer
Proactive supply management
But it seems difficult to assign a value and maximum cost for these strategies. Xu and Nizick (2009) are filling this gap.
Submitted by Daniel Dumke on Mon, 2010-05-17 20:30
Just a short note: Outsourcing always means giving away information which prior only belonged to one company. It therefore carries increased risk of theft, be it physical or intellectual.
In the last days several videos showed up on youtube showing what might be the next generation Apple iPhone.
Usually these videos are published from bloggers or the press, sometimes money for the device/video is paid.
Even though supply chain risk has been analyzed in the literature for some time (eg. the Newsvendor / Newsboy problem, with the only uncertainty being demand). Nevertheless there are still many gaps (or opportunities) within this field.
In 2007 Khan and Burnes created a research agenda for the future and most of the topics covered still can be viewed as open.
Major Issues
The authors identify two major shortcomings of the current literature.
1) Locate itself within the wider literature on the theory of risk and the practice of risk management
What do professionals in the domain of supply chain management think about disruptions? How do they prepare for them, how do they act when a disruption occurs?
Blackhurst et al. (2005) answer these questions in their work about “An empirically derived agenda of critical research issues for managing supply-chain disruptions”.The authors are using three different empirical methods to achieve this goal empirically: Case study, surveys and focus groups.
A very interesting part of Supply Chain Risk Management deals with the impact of uncertainty on the supply chain design process. Van der Vorst and Beulens (2002) address this topic, and focus on the redesign of supply chains.
They claim that sources of uncertainty can be a key driver for chain redesign and after analyzing the literature and own research (case study) they present a tool for supply chain redesign where the sources of uncertainty support the selection of the relevant strategy.
Supply Chain Risk manifests itself in many ways. Today the German airlines restored their regular flight schedule again after six days of no or limited air traffic, after the latest eruption of the Eyjafjallajökull vulcano on Iceland.
The consequences of such events only rarely become evident, but in the background emergency plans have to be executed (or developed).
Jiang et al. (2009) wrote about job dissatisfaction of workers at suppliers in developing countries.
Goal & Methodology
The goal of the study was to analyze risk in a global supply chain, especially originating from labor dissatisfaction and turnover. The results were obtained using a survey of workers in the Chinese Pearl River Delta region. The methodology is presented precisely and comprehensively.
The article “Aligning Supply Chain Strategies with Product Uncertainties” by Hau L. Lee is a good starting point for SCRM, since it combines a simple, business ready framework for two major supply chain risks.Furthermore it includes many examples to reinforce the theoretical framework.
