Integration11

問題問題 11

存貨生產存貨生產 (Make to stock) ((Make to stock) (push systempush system))的優點與問題的優點與問題– 成本、效率 成本、效率 vs. vs. 產品多樣化、產品壽命週期產品多樣化、產品壽命週期

短短……– 為什麼為什麼 Coca ColaCoca Cola 可以？可以？

產業特性的考量產業特性的考量

導入導入 POS (POS (pull systempull system) ) 可以決解所有問題？可以決解所有問題？

Integration22

問題問題 22—which one is better?—which one is better?11

供應商 配銷商

零售商

零售商

零售商

供應商 配銷商

零售商

零售商

零售商

實體

資訊

Push system

Pull system

Integration33

問題問題 22—which one is better?—which one is better?22

供應商 團購網

消費者

消費者

消費者

供應商

零售商

零售商

零售商

實體

資訊

Integration44

6.1 Introduction6.1 Introduction11

Effective SCM implies:Effective SCM implies:– Efficient integrationEfficient integration of suppliers, of suppliers,

manufacturers, warehouses, and stores. manufacturers, warehouses, and stores.

– Coordinate activitiesCoordinate activities across the supply chain across the supply chain

Improve performance: Improve performance: reducereduce cost cost, , increaseincrease service level service level, , reduce thereduce the bullwhip bullwhip effecteffect, , better better utilize resourcesutilize resources, and , and effectively effectively respond to changes in the respond to changes in the market placemarket place. .

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6.1 Introduction6.1 Introduction22

Various supply chain Various supply chain integration integration strategiesstrategies: : – Push, pull, push–pullPush, pull, push–pull strategy. strategy.– Matching Matching products and industriesproducts and industries with with

supply chain strategiessupply chain strategies..– Demand-driven Demand-driven supply chain strategies.supply chain strategies.– The impact of the The impact of the Internet Internet on supply on supply

chain integration.chain integration.

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6.2 Push, Pull, Push-Pull 6.2 Push, Pull, Push-Pull SystemsSystems

PushPush and and PullPull traditional categories of traditional categories of manufacturing operationsmanufacturing operations

More recent More recent hybrid strategyhybrid strategy of of combining the two, combining the two, Push-Pull Push-Pull systemssystems

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Push-Based Supply ChainsPush-Based Supply Chains11

Production and distribution Production and distribution decisions based on decisions based on long-term long-term forecasts. forecasts. ManufacturerManufacturer demand forecasts demand forecasts based on based on orders receivedorders received from the from the retailer’s warehousesretailer’s warehouses. .

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Push-Based Supply ChainsPush-Based Supply Chains22

Longer reaction timeLonger reaction time to to changing changing marketplacemarketplace::– Inability to meet Inability to meet changing demand changing demand

patternspatterns..例如，例如， NOKIANOKIA 在智慧型手機市場節節敗退在智慧型手機市場節節敗退……

例如，平板電腦對筆記型電腦的衝擊例如，平板電腦對筆記型電腦的衝擊……推出推出 Ultra Ultra Book…Book… However, ipad However, ipad 已經推出第三代已經推出第三代……

– ObsolescenceObsolescence of supply chain inventory of supply chain inventory as demand for as demand for certain products certain products disappearsdisappears..

例如，例如， DRAMDRAM

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Push-Based Supply ChainsPush-Based Supply Chains33

Longer reaction timeLonger reaction time to to changing changing marketplacemarketplace::– VariabilityVariability of of orders receivedorders received much much

largerlarger than the than the variability variability in in customer customer demanddemand due to the due to the bullwhip effectbullwhip effect..

Excessive inventoriesExcessive inventories due to the due to the need need for large safety stocksfor large safety stocksLarger and more variableLarger and more variable production production batches(batches( 超時生產與資源閒置的成本增加超時生產與資源閒置的成本增加 ))UnacceeptableUnacceeptable service levelsservice levelsProductProduct obsolescenceobsolescence

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Bullwhip Effect in Push-Based Bullwhip Effect in Push-Based Supply ChainsSupply Chains

Leads toLeads to inefficient resource utilizationinefficient resource utilizationPlanningPlanning and and managingmanaging are much more are much more difficultdifficult. . Not clearNot clear how a manufacturer should how a manufacturer should determine determine production capacityproduction capacity? ? Transportation capacityTransportation capacity? ? – Peak demand? Peak demand? – Average demand? Average demand?

Results: Results: – HigherHigher transportation coststransportation costs– HigherHigher inventory levelsinventory levels and/or and/or higher higher

manufacturing costsmanufacturing costs– more emergencymore emergency production changeoversproduction changeovers

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Pull-Based Supply ChainsPull-Based Supply Chains11

Production and distribution Production and distribution demand demand drivendriven – Coordinated with Coordinated with true customer demandtrue customer demand

rather than forecast demand rather than forecast demand – firm does firm does not hold any inventorynot hold any inventory and and only only

responds to responds to specificspecific ordersorders..

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Pull-Based Supply ChainsPull-Based Supply Chains22

Intuitively attractive:Intuitively attractive:– ReducedReduced lead timeslead times through the ability to through the ability to

better anticipate incoming ordersbetter anticipate incoming orders from the from the retailers.retailers.

– Reduced inventoryReduced inventory since inventory levels since inventory levels decrease with decrease with lead timeslead times

– Less variabilityLess variability in the system in the system– Decreased inventoryDecreased inventory at the at the manufacturer manufacturer

due to the reduction in due to the reduction in variabilityvariability..

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Problems of Pull-Based SystemsProblems of Pull-Based Systems

Difficult to implement when Difficult to implement when lead times lead times are so longare so long that it is impractical to that it is impractical to react react to demand informationto demand information

Harder to leverageHarder to leverage economies of scaleeconomies of scale

——DoesnDoesn’’t work in all cases ― t work in all cases ― 現在訂現在訂minimini ，，四個月後交車四個月後交車……

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Push-Pull StrategyPush-Pull StrategySome stagesSome stages of the supply chain of the supply chain operated in a operated in a push-basedpush-based manner manner– typically the initial stagestypically the initial stages

Remaining stagesRemaining stages employ a employ a pull-based pull-based strategy. strategy.

InterfaceInterface between the push-based between the push-based stages and the pull-based stages is the stages and the pull-based stages is the push–pull boundarypush–pull boundary..

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Push-Pull Supply ChainsPush-Pull Supply Chains

Push-Pull Boundary

PUSH STRATEGY PULL STRATEGY

Low Uncertainty High Uncertainty

The Supply Chain Time Line

CustomersSuppliers

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Consider Two PC Manufacturers:Consider Two PC Manufacturers:

Build to StockBuild to Stock– Forecast demandForecast demand– Buys componentsBuys components– Assembles Assembles

computerscomputers– Observes demand Observes demand

and meets demand and meets demand if possible.if possible.

A traditional A traditional push push systemsystem

Build to orderBuild to order– Forecast demandForecast demand– Buys componentsBuys components– Observes demandObserves demand– Assembles computersAssembles computers– Meets demandMeets demand

A A push-pull systempush-pull system

The push-pull The push-pull boundary is at theboundary is at the beginning of assemblebeginning of assemble..

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General StrategyGeneral Strategy

Make a part of the product to Make a part of the product to stockstock – – generic productgeneric product (CPU (CPU ，， DRAM…)DRAM…)

The point whereThe point where differentiationdifferentiation has to has to be introduced is the be introduced is the push-pull push-pull boundaryboundary

Based on Based on extent of customizationextent of customization, the , the position of the position of the boundary on the boundary on the timeline is decidedtimeline is decided

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Push-Pull StrategiesPush-Pull Strategies―― Advantage of the Advantage of the rules of forecastingrules of forecasting

Forecasts are always wrong (Forecasts are always wrong (pull pull

strategystrategy))

The The longer the forecast horizon the longer the forecast horizon the

worst is the forecastworst is the forecast ( (finished goodsfinished goods) )

((push-pull boundarypush-pull boundary))

Aggregate forecastsAggregate forecasts are more accurate are more accurate

((componentscomponents) () (push strategypush strategy))– The The Risk PoolingRisk Pooling Concept Concept

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Push-Pull StrategiesPush-Pull Strategies――PostponementPostponement

The firm designs the product and the The firm designs the product and the manufacturing process so that decisions manufacturing process so that decisions about about which specific product is being which specific product is being manufactured manufactured can be delayed as long as can be delayed as long as possiblepossible..The portion of the supply chain The portion of the supply chain prior to prior to product differentiation product differentiation is typically is typically operated using a operated using a push-based strategypush-based strategy..The portion of the supply chain The portion of the supply chain startingstarting from the time of from the time of differentiationdifferentiation is is pull-pull-basedbased..

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What is the What is the Best StrategyBest Strategy about about Push – Pull StrategyPush – Pull Strategy??

Low High

H

L

Economies of ScalePull Push

Pull

Push

Demand uncertainty

(C.V.)

Delivery costUnit price

IIIIII

GroceryGrocery

IVIV

Books & CDsBooks & CDs

IIII

FurnitureFurniture

II

ComputerComputer

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Selecting the Best SC StrategySelecting the Best SC Strategy11

Higher Higher demand uncertaintydemand uncertainty suggests suggests pullpull

Higher importanceHigher importance ofof economies of scaleeconomies of scale suggestssuggests push push

High uncertainty/ EOS not importantHigh uncertainty/ EOS not important (Box I) (Box I) such as the computer industry implies such as the computer industry implies pullpull (( 例如例如，， Dell Computer)Dell Computer)

Low uncertainty/ EOS importantLow uncertainty/ EOS important (Box III) (Box III) such as groceries implies such as groceries implies pushpush– Demand is stableDemand is stable– Transportation cost reduction is criticalTransportation cost reduction is critical– Pull would not be appropriate here.Pull would not be appropriate here.– 例如，可口可樂例如，可口可樂

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Selecting the Best SC StrategySelecting the Best SC Strategy22

Low uncertainty but low value of Low uncertainty but low value of economies of scaleeconomies of scale (Box IV)(high volume (Box IV)(high volume books and cd’s (books and cd’s ( 產品壽命週期短產品壽命週期短 ))– Either Either push strategiespush strategies or or push/pull push/pull

strategies might be most appropriatestrategies might be most appropriate

High uncertainty and high value of High uncertainty and high value of economies of scale economies of scale (Box II)(Box II)– For example, the furniture industryFor example, the furniture industry– How can production be pull but delivery How can production be pull but delivery

push?push?– Is this a “Is this a “pull-pushpull-push” system?” system?

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案列討論案列討論書籍或書籍或 CDCD 採採 push or push-pullpush or push-pull 策略策略――科科技技的影響的影響– 傳統印刷廠傳統印刷廠――一刷、二刷、三刷一刷、二刷、三刷…… (push)(push)– 導入電腦化之印刷製程導入電腦化之印刷製程――大量進紙，欲增印大量進紙，欲增印，，

直接更改文件檔直接更改文件檔…… (push-pull)(push-pull)

家俱業基於實際需求進行生產家俱業基於實際需求進行生產 (pull)(pull) ，訂，訂定定固配送排程固配送排程，，總合所有運往相同區域商總合所有運往相同區域商店的商品店的商品，依，依固定時間進行運送固定時間進行運送 (push)(push) 以以降低運輸成本降低運輸成本

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Push-Pull Strategy Push-Pull Strategy ― Case Study― Case Study

Coca colaCoca cola

御便當御便當…… (( 短前置時間短前置時間、、低需求變異低需求變異 )()( 連續補貨連續補貨 ))(( 第三方物流、第三方物流、 POSPOS 、、 EOS)EOS)McDonald’s…McDonald’s…Sport Obermeyer (example 6-3, p.196)Sport Obermeyer (example 6-3, p.196)– Low-risk products Low-risk products push strategypush strategy– High-risk products High-risk products push-pull strategypush-pull strategy

精品咖啡店精品咖啡店– 單品咖啡單品咖啡――顧客要求小批、多樣化、即時烘焙顧客要求小批、多樣化、即時烘焙 push-push-

pull strategypull strategy– 意式咖啡意式咖啡 push strategypush strategy

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Characteristics and SkillsCharacteristics and Skills

RawMaterial Customers

PullPush

HighLow UncertaintyLong Lead TimesCost MinimizationResource AllocationSupply chain planning

LowHigh UncertaintyShort Cycle

TimesService LevelResponsivenessOrder fulfillment

ComplexityUncertaintyLead timeObjectiveFocusProcesses

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Locating the Push-Pull BoundaryLocating the Push-Pull Boundary11

The The push sectionpush section::– UncertaintyUncertainty is is relatively lowrelatively low– Economies of scaleEconomies of scale importantimportant– LongLong lead timeslead times– ComplexComplex supply chain structures supply chain structures

ThusThus– Management based on Management based on forecastsforecasts is appropriate is appropriate– Focus is on Focus is on cost minimizationcost minimization– Achieved by Achieved by effective resource utilizationeffective resource utilization – –

supply chain optimizationsupply chain optimization

例如，例如， ICIC 產業產業

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Locating the Push-Pull BoundaryLocating the Push-Pull Boundary22

The The pull sectionpull section::– HighHigh uncertaintyuncertainty– SimpleSimple supply chain structuresupply chain structure– ShortShort lead timeslead times

ThusThus– Reacting to Reacting to realized demandrealized demand is important is important– Focus on Focus on service levelservice level– FlexibleFlexible and and responsiveresponsive approaches approaches

例如，網路購物例如，網路購物……

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Locating the Push-Pull BoundaryLocating the Push-Pull Boundary33

The The push sectionpush section requires: requires:– Supply chain planningSupply chain planning– Long term strategiesLong term strategies

The The pull sectionpull section requires: requires:– Order fulfillment processesOrder fulfillment processes– Customer relationship managementCustomer relationship management

Buffer inventoryBuffer inventory at the boundaries at the boundaries::– The The outputoutput of the of the tactical planning processtactical planning process– The The inputinput to the to the order fulfillment processorder fulfillment process..

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案例案例精品咖啡店的精品咖啡店的 push-pull boundarypush-pull boundary―― 自家自家店內店內– 生豆進貨生豆進貨 push (push ( 前置時間長前置時間長、、運輸成本高運輸成本高 ))– 單品烘焙單品烘焙 pull(pull( 顧客要求小批、多樣化、新鮮顧客要求小批、多樣化、新鮮

——即時烘焙即時烘焙 ))

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Locating the Push-Pull BoundaryLocating the Push-Pull Boundary44

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6.3 The Impact of Lead Time6.3 The Impact of Lead Time11

LongerLonger the the lead timelead time, more important it , more important it is to implement a is to implement a push based strategypush based strategy. .

Typically Typically difficultdifficult to to implement a pull implement a pull strategystrategy when when lead times are so longlead times are so long that it is that it is hard to react to demand hard to react to demand informationinformation. .

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Impact of Lead TimeImpact of Lead Time22

FIGURE 6-10: Matching supply chain strategies with products: the impact of lead time and demand uncertainty

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Impact of Lead TimeImpact of Lead Time33

Box A Box A – Items with Items with shortshort lead timelead time and and high high

demand uncertaintydemand uncertainty – Pull strategyPull strategy should be applied as much as should be applied as much as

possible. possible.

Box B Box B – Items with Items with long long supply lead timesupply lead time and and low low

demand uncertaintydemand uncertainty. . – Appropriate supply chain strategy is Appropriate supply chain strategy is pushpush..

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問題討論問題討論眼鏡業眼鏡業 vs. vs. 紅酒製造業者 紅酒製造業者 ― ― short lead short lead time and high demand uncertainty vs. time and high demand uncertainty vs. long lead time and low demand long lead time and low demand uncertainty ― pull vs. pushuncertainty ― pull vs. push

Integration3535

Impact of Lead TimeImpact of Lead Time44

Box C Box C – items with items with shortshort supply supply lead timelead time and and

highly predictablehighly predictable demanddemand. . – Continuous replenishment strategyContinuous replenishment strategy

Suppliers receive Suppliers receive POS dataPOS dataThey use these data to prepare shipments at They use these data to prepare shipments at previously agreed-upon intervalspreviously agreed-upon intervalsA A pull strategypull strategy at the at the production production and and distribution distribution stages and stages and pushpush at the at the retail retail outletsoutlets..

– 例如例如，食品雜貨業之較短生命週期的產品，食品雜貨業之較短生命週期的產品 (( 麵包、麵包、乳製品乳製品 ))

Integration3636

Impact of Lead TimeImpact of Lead Time55

Box D Box D – Items with Items with lead timeslead times are are longlong and and

unpredictable unpredictable demanddemand InventoryInventory is critical in this type of is critical in this type of environment environment

Requires positioning inventory strategically Requires positioning inventory strategically in the supply chainin the supply chain

Integration3737

問題討論問題討論御便當 御便當 vs. Blu-ray ― vs. Blu-ray ― short lead time short lead time and low demand uncertaintyand low demand uncertainty vs. vs. long long lead time and high demand uncertaintylead time and high demand uncertainty ― ― continuous replenishmentcontinuous replenishment vs. vs. inventoryinventory positioning positioning

Integration3838

6.4 Demand-Driven Strategies 6.4 Demand-Driven Strategies

Requires Requires integratingintegrating demand demand informationinformation into the into the supply chain supply chain planning process planning process – Demand forecastDemand forecast: :

Use historical demand data to develop long-Use historical demand data to develop long-term estimates of expected demandterm estimates of expected demand

– Demand shapingDemand shaping: : Firm determines the impact of various Firm determines the impact of various marketing plans such as marketing plans such as promotionpromotion, , pricingpricing discountsdiscounts, , rebatesrebates, , new product introductionnew product introduction, , and and product withdrawalproduct withdrawal on demand forecasts. on demand forecasts.

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高需求預測誤差高需求預測誤差對供應鏈績效表現帶來不對供應鏈績效表現帶來不利的影響，造成利的影響，造成銷售損失銷售損失、、過時存貨過時存貨，以，以及及無效率的資源利用無效率的資源利用。。

Effect of forecast errorEffect of forecast error

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預測誤差的估計預測誤差的估計平均絶對誤差平均絶對誤差 ((mean absolute deviation, mean absolute deviation,

MADMAD))

均方誤差均方誤差 (mean squared error, MSE)(mean squared error, MSE)

平均絶對百分比誤差平均絶對百分比誤差 (mean absolute (mean absolute

percent error, MAPE)percent error, MAPE)t t

t

Actual Forecast

ActualMAD

n

2

t tActual ForecastMSE

n 1

t tActual ForecastMAD

n

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預測的監控預測的監控 11――管制圖管制圖管制中心線管制中心線 (Center Line, CL)(Center Line, CL) ：： CL=0CL=0

管制上限管制上限 (Upper Control Limit, UCL)(Upper Control Limit, UCL)

管制下限管制下限 (Lower Control Limit, LCL)(Lower Control Limit, LCL)

UCL 0 z MSE

LCL 0 z MSE

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預測的監控預測的監控 22――追蹤訊號追蹤訊號追蹤訊號的追蹤訊號的目的目的在於在於偵測誤差偵測誤差的任何的任何偏差偏差數值為數值為 00 最為理想最為理想，，正負正負 44 到正負到正負 55 的界的界限常被作為限常被作為可接受範圍可接受範圍。若。若數值落在可接數值落在可接受範圍外受範圍外，會被，會被視為有預測偏差的訊號視為有預測偏差的訊號，，此時此時需進行矯正動作需進行矯正動作。。

當計算出第一個當計算出第一個 MADMAD 值後，可用值後，可用指數平滑指數平滑法法更新更新 MADMAD

t tt

tMAD

實際值 預測值

追蹤訊號

t t 1 t 1tMAD MAD MAD 實際值 預測值

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選擇選擇推－拉界線推－拉界線使需求能透過下列一個或多個構使需求能透過下列一個或多個構面來面來彙總需求彙總需求：：產品 、地理區域 、時間產品 、地理區域 、時間

使用使用市場分析市場分析、、人口統計學人口統計學及及經濟趨勢經濟趨勢改善預測改善預測的準確性的準確性 (( 因果法因果法 ))

決定各店決定各店最佳產品組合最佳產品組合以便以便降低在同一市場競爭降低在同一市場競爭的商品種類的商品種類。。

將將顧客顧客結合到協同規劃與預測程序結合到協同規劃與預測程序中，以便更中，以便更瞭瞭解市場需求解市場需求、、促銷影響促銷影響、、價格事件價格事件與與廣告廣告。。

– Collaborative Planning Forecasting and replenishment, Collaborative Planning Forecasting and replenishment,

CPFR))

降低預測誤差的方法降低預測誤差的方法

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案例案例iPhoneiPhone 、、 Apple Watch… Apple Watch… 預購活動預購活動……– 利用預購量預測市場可能需求量利用預購量預測市場可能需求量……

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案例案例宜蘭燒餅 宜蘭燒餅 vs. vs. 無錫排骨無錫排骨– 上網瀏灠 上網瀏灠 滙款 滙款 宅配到府 宅配到府 vs. vs. 只有無錫的賣只有無錫的賣

場有賣場有賣……

網路實體零售商 網路實體零售商 (click-and-mortar) vs. (click-and-mortar) vs. 實體零售商 實體零售商 (brick-and-mortar)(brick-and-mortar)– 案例，向台中的咖啡店訂咖啡案例，向台中的咖啡店訂咖啡……– ＊大與＊美相關老店 ＊大與＊美相關老店 vs. vs. 虛實整合商店虛實整合商店……

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理論應用理論應用麻雀的尾巴一旦拉長，也會變成鳳凰 麻雀的尾巴一旦拉長，也會變成鳳凰 ― ―

長尾理論 (the long tail)

問題問題– 便利商店便利商店 80%80% 的營收來自的營收來自 400400 個品項，其餘個品項，其餘

14001400 個品項的營業額僅有兩成個品項的營業額僅有兩成……– 7net

案例案例– 搶攻宅經濟！ㄧ通電話訂搶攻宅經濟！ㄧ通電話訂 LVLV 送到家　接單量送到家　接單量

增增 22倍 倍

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問題問題Amazon Amazon 的興衰的興衰……

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6.5 The Impact of the 6.5 The Impact of the InternetInternet on on Supply Chain StrategiesSupply Chain Strategies11

ExpectationExpectation that increasing use of the that increasing use of the internet would internet would solve a lot of the solve a lot of the business problemsbusiness problems– However, reality was very differentHowever, reality was very different

Many of the problems in the internet-Many of the problems in the internet-based businesses were based businesses were related torelated to logistics strategieslogistics strategies

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問題討論問題討論網路賣年菜網路賣年菜……– 鮮食直送 鮮食直送 vs. vs. 第三方低温物流第三方低温物流 ++ 便利商店取貨便利商店取貨

物流的問題解決了，但是口味物流的問題解決了，但是口味……

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The Impact of the The Impact of the InternetInternet on on Supply Chain StrategiesSupply Chain Strategies22

E-business strategiesE-business strategies were supposed were supposed to:to:– ReduceReduce cost cost– Increase Increase service levelservice level– Increase Increase flexibilityflexibility– Increase Increase profitprofit

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Reality is … downfallReality is … downfallPeapod ExamplePeapod Example– Founded 1989Founded 1989– 140,000 members, largest on-line grocer140,000 members, largest on-line grocer– Revenue tripled to $73 million in 1999Revenue tripled to $73 million in 1999– 1st Quarter of 2000: $25M Sales, Loss: $8M1st Quarter of 2000: $25M Sales, Loss: $8M

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Reality is … successfulReality is … successful

DellDell Example:Example:– Dell Computer has outperformed the competition Dell Computer has outperformed the competition

in terms of shareholder value growth over the in terms of shareholder value growth over the eight years period, 1988-1996, by eight years period, 1988-1996, by over 3,000%over 3,000% (see Anderson and Lee, 1999) (see Anderson and Lee, 1999)

Amazon.com ExampleAmazon.com Example– Founded in 1995; 1st Internet purchase for most Founded in 1995; 1st Internet purchase for most

peoplepeople– 1996: $16M Sales, $6M Loss1996: $16M Sales, $6M Loss– 1999: $1.6B Sales, $720M Loss1999: $1.6B Sales, $720M Loss– 2000: $2.7B Sales, $1.4B Loss2000: $2.7B Sales, $1.4B Loss– 2005: Revenue reached 8.49B with total profit of 2005: Revenue reached 8.49B with total profit of

359M359M

Integration5353

What is E-Business?What is E-Business?11

E-businessE-business is a collection of is a collection of business business modelsmodels and and processesprocesses motivated by motivated by Internet technologyInternet technology, and focusing on , and focusing on improvingimproving the extended enterprise the extended enterprise performanceperformanceE-commerceE-commerce is the ability to perform is the ability to perform major major commerce transactions commerce transactions electronicallyelectronically

Integration5454

What is E-Business?What is E-Business?22

e-commerce is part of e-Businesse-commerce is part of e-BusinessInternet technologyInternet technology is the driver of the is the driver of the business changebusiness changeThe The focusfocus of E-Business is on the of E-Business is on the extended enterprise:extended enterprise:– Intra-organizational Intra-organizational – Business to Consumer (B2C)Business to Consumer (B2C)– BusinessBusiness to Business (B2B) to Business (B2B)

Integration5555

The Grocery Industry The Grocery Industry From Push SystemsFrom Push Systems......– Supermarket supply chainSupermarket supply chain

......To Pull SystemsTo Pull Systems– Peapod, 1989-1999Peapod, 1989-1999

Picks inventory from storesPicks inventory from storesStock outs 8% to 10%Stock outs 8% to 10%

And, finally to And, finally to Push-Pull SystemsPush-Pull Systems– Peapod, 1999-presentPeapod, 1999-present

Dedicated warehousesDedicated warehouses allow allow risk pooling risk pooling (covers a (covers a geographical areageographical area larger larger than the one covered by an than the one covered by an individual supermarketindividual supermarket))Stock outs less than 2%Stock outs less than 2%

Integration5656

Challenges for On-line Grocery StoresChallenges for On-line Grocery Stores Transportation costTransportation cost– Density of customersDensity of customers– Very Very short order cycle timesshort order cycle times

Less than 12 hoursLess than 12 hours

– Difficult to compete on costDifficult to compete on costMust provide some Must provide some added valueadded value such as convenience such as convenience

Is a push-pull strategy appropriate?Is a push-pull strategy appropriate?

What might be a better strategy?What might be a better strategy?– Low demand uncertaintyLow demand uncertainty, , high economies of scale high economies of scale

(transportation cost)(transportation cost)… … push strategy is betterpush strategy is better……? ? – 例如，買菜網例如，買菜網……

Integration5757

Less than 300,000 shoppersLess than 300,000 shoppers

NNuummbbeerr ooff ccuussttoommeerrss

AAvveerraaggee oorrddeerr

DDeelliivveerryy cchhaarrggeess

WWeebbvvaann 2211000000 $$7711 $$44..9955 ffoorr << $$5500 ffrreeee ffoorr >> $$5500

PPeeaappoodd 114400000000 $$112200 $$77..9955 ppeerr oorrddeerr

HHoommeeGGrroocceerr..ccoomm 5500000000 $$111100 $$99..9955 << $$7755 ffrreeee ffoorr >> $$7755

NNeettGGrroocceerr..ccoomm 6600000000 $$7700 $$22..9999 ffoorr << $$5500 $$44..9999 ffoorr >> $$5500

SShhooppLLiinnkk..ccoomm 33330000 $$9988 $$2255 mmoonntthhllyy

SSttrreeaammlliinnee..ccoomm 33440000 $$110000 $$3300

Source: D. Ratliff

Integration5858

A New Type of Home Grocer A New Type of Home Grocer

grocerystreet.com grocerystreet.com – On-line window for retailersOn-line window for retailers– The on-line grocer picks products at the The on-line grocer picks products at the

storestore– Customer can pick products at the store or Customer can pick products at the store or

pay for deliverypay for delivery

Yahoo超級商城

Integration5959

The Book Selling Industry The Book Selling Industry

From Push SystemsFrom Push Systems......– Barnes and NobleBarnes and Noble

......To Pull SystemsTo Pull Systems– Amazon.com, 1996-1999Amazon.com, 1996-1999– No inventory, used Ingram to meet most demandNo inventory, used Ingram to meet most demand– Why?Why?

And, finally to And, finally to Push-Pull SystemsPush-Pull Systems– Amazon.com, 1999-presentAmazon.com, 1999-present

7 warehouses, 3M sq. ft.,7 warehouses, 3M sq. ft.,– Why the switch?Why the switch?

Volume grewVolume grewProfit margins Profit margins , service level , service level , etc., etc.

Integration6060

Direct-to-Consumer:Cost Direct-to-Consumer:Cost Trade-OffTrade-Off

Cost Trade-Off for BuyPC.com

$0$2$4$6$8

$10$12$14$16$18$20

0 5 10 15

Number of DC's

Co

st (

$ m

illio

n)

Total Cost

Inventory

Transportation

Fixed Cost

Integration6161

Industry Benchmarks:Industry Benchmarks:Number of Distribution CentersNumber of Distribution Centers

Sources: CLM 1999, Herbert W. Davis & Co; LogicTools

Avg.# ofWH 3 14 25

Pharmaceuticals Food Companies Chemicals

- High margin product- Service not important (or easy to ship express)- Inventory expensiverelative to transportation

- Low margin product- Service very important- Outbound transportationexpensive relative to inbound

Integration6262

The Retail IndustryThe Retail IndustryBrick-and-mortar (Brick-and-mortar ( 實體零售商實體零售商 )) companies companies establish virtual retail stores establish virtual retail stores ― ― click-and click-and mortar (mortar ( 網路實體零售商網路實體零售商 ))– Wal-MartWal-Mart ，， K-MartK-Mart ，， BarnesBarnes ，， & 7-11 (7net)& 7-11 (7net)

An effective approach - An effective approach - hybrid stocking hybrid stocking strategy strategy – High volume/fast moving products for High volume/fast moving products for local local

storagestorage– Low volume/slow moving products for Low volume/slow moving products for browsing browsing

and purchase on line and purchase on line ((risk poolingrisk pooling))

Integration6363

案例案例Another case: Another case: 高島高島 ×× 的咖啡機的咖啡機……– 策略聯盟下的虛實整合策略聯盟下的虛實整合……

7net

www.scubastore.com

Integration6464

案例案例安＊物流中心 安＊物流中心 vs. Coca Colavs. Coca Cola

Integration6565

E-FulfillmentE-Fulfillment

How have strategies changed?How have strategies changed?– From From shipping casesshipping cases to to single items single items (( 產品產品

多樣、少量化多樣、少量化…… ))– From From shipping to a relatively small number shipping to a relatively small number

of storesof stores to to individual end users. individual end users. ((宅配宅配 ))– Increased the importance and the Increased the importance and the

complexity of complexity of reverse logisticsreverse logistics– 例如，網路購物例如，網路購物 (B2C)(B2C)

Integration6666

E-Fulfillment Requires a New E-Fulfillment Requires a New Logistics InfrastructureLogistics Infrastructure

Traditional Supply Chain e-Supply Chain

Supply Chain Strategy Push Push-Pull

Shipment Type Bulk Parcel

Inventory Flow Unidirectional Bi-directional

Reverse Logistics Simple Highly Complex

Destination Small Number of Stores Highly Dispersed Customers

Lead Times Relatively long Relatively Short

Integration6767

E-business OpportunitiesE-business Opportunities11

Reduce Facility CostsReduce Facility Costs– Eliminate retail/distributor sitesEliminate retail/distributor sites

Reduce Inventory CostsReduce Inventory Costs– Apply the Apply the risk-pooling conceptrisk-pooling concept

Centralized stockingCentralized stockingPostponement of product differentiationPostponement of product differentiation

Use Dynamic PricingUse Dynamic Pricing Strategies to Strategies to Improve Supply Chain PerformanceImprove Supply Chain Performance– Dynamic pricing: Dynamic pricing: 不同的時間訂定不同的價不同的時間訂定不同的價格格

Integration6868

E-business OpportunitiesE-business Opportunities22

Supply Chain VisibilitySupply Chain Visibility– Reduction in the Bullwhip EffectReduction in the Bullwhip Effect

Reduction inReduction in Inventory Inventory

Improved Improved service levelservice level

Better utilization of Better utilization of ResourcesResources

– Improve supply chain performanceImprove supply chain performanceProvide Provide key performance measureskey performance measures

Identify and alertIdentify and alert when when violations occurviolations occur

Allow Allow planning basedplanning based on on globalglobal supply chain supply chain datadata

Integration6969

問題討論問題討論畢業後從事網拍 畢業後從事網拍 or or 找份正職工作？？找份正職工作？？– 商品屬性商品屬性

運輸成本運輸成本存放期限存放期限壽命週期壽命週期單位利潤單位利潤……

– 市場屬性市場屬性密度密度廣度廣度需求前置時間需求前置時間相關人口統計變數相關人口統計變數競爭競爭……

Integration7070

SummarySummaryImplementation Implementation of push-pull strategies of push-pull strategies and and demand-driven strategies demand-driven strategies have helped many have helped many companies to improve performance, reduce companies to improve performance, reduce costs, increase service levels. costs, increase service levels. Collapse of many Internet companies shows Collapse of many Internet companies shows that that e-businesse-business has great challenges. has great challenges. Companies need to:Companies need to:– Identify the appropriate supply chain strategy for Identify the appropriate supply chain strategy for

individual products. individual products. – Case for no physical infrastructure or inventory is Case for no physical infrastructure or inventory is

tenuous tenuous – Push–pull strategy Push–pull strategy

advocates holding inventoryadvocates holding inventoryalthough it pushes the inventory upstream in the supply although it pushes the inventory upstream in the supply chain.chain.