Essentials of Supply Chain Management, Third Edition

CHAPTER 6

Supply Chain Coordination

After reading this chapter you will be able to

• Understand a common supply chain dynamic that is a major contributor to the “boom to bust” business cycle
• Appreciate the factors that contribute to this supply chain dynamic
• Gain an overview of the Global Data Synchronization Network (GDSN) and see how it can help improve supply chain coordination
• Evaluate methods such as collaborative planning, forecasting, and replenishment (CPFR) to improve coordination and combat the bullwhip effect

The spread of high-speed data communication networks and computer technology has made it possible to manage supply chains with a level of precision just not feasible even as recently as the 1990s. Those organizations that learn to use the techniques and technologies that are now available can build supply chains that have a competitive advantage in their markets.

Because the capability exists to react much more quickly to changes in market demand, this capability is now a point of competition. Business competition based on supply chain efficiency is becoming a central fact in many markets. To develop this capability, individual companies and entire supply chains need to learn new behaviors and they need to enable these new behaviors with the use of appropriate technology.

The Bullwhip Effect

One of the most common dynamics in supply chains is a phenomena that has ...