Chains of deliveries and information systems, or the history of one misunderstanding

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4 namerenno I indicate neither forum, on which were placed this question nor name of its author, since I consider that the author entered absolutely correctly, having publicly presented the question, to which he not had answer. From its side, 4 it is also intended to enter correctly and to give it answer. In order not to develop bicycle, I will make this on the basis of Marshall's article Fisher (Marshall L Fisher, "What Is the Right Supply Chain for Your Products?", Harvard Business Review , March-April 1997).

Thus, from what does begin control of the chain of deliveries, or Supply Chain Management ? Obviously, from its development. However, the development of the chain of deliveries should be begun from the answer to one principally most important question: is the product, which moves along this chain, functional or innovativnym ?

Functional products serve the satisfaction of vital needs and are bought frequently, in the majority of the cases without the caution in the place of the acquisition (it was required - he saw - it purchased). On them there is a more or less predictable demand, and their life cycle lasts relatively for long. To competitors it is easy to imitate them, and consequently, it is difficult to make them highly remunerative.

Innovativnye products, on the contrary, are the last word of technology or mode, it is difficult to predict demand on them, and their life cycle is considerably shorter. As the compensation for risk and brevity of existence of this goods its producer obtains relative freedom from the competition and possibility connected with this to attain higher profitability.

First question to the specialists in the information systems, thus, is already visible with the naked eye: as with the aid of the information system to determine functionality or innovativnost' of product? It is obvious that a question of functionality and effectiveness it cannot be answered with the aid of the information system - it must be tightly "sewn" into product strategy of company regardless of the fact, is there in it generally information system.

Marshall Fisher gives the following exemplary indices of demand for the functional and innovativnye products:

it is important to remember that the chain of delivery fulfills two basic functions. Physical function of the chain of delivery is visible to any: materials are converted in the detail, and those - into the finished articles, and all this one way or another is moved in the space. Intermediary function of the chain of delivery is less obvious, but not is less important - for the market must come the fact that it is necessary for users.

Both functions, naturally, are fulfilled with some expenses. In the course of the performance of physical function the production costs, transport and storage appear. However, intermediary function implies the expenses of another kind. When proposal exceeds demand, it is necessary to reduce prices and to sell with the loss, while when demand exceeds proposal, appear the missed incomes and dissatisfied clients.

V the conditions of the predictable demand for the functional products of the expenses of mediation are relatively small. Therefore companies, which generate such products, can concentrate primary attention in the reduction of physical expenses, which is especially important with the high elasticity of demand for the functional products. Specifically, such companies usually and use the information systems, which permit implementation of planning production resources ( Manufacturing Resource Planning , or MRP). Software, utilized for these purposes, makes it possible to govern orders, production and deliveries, which leads to a decrease of commodity reserves according to the entire chain of deliveries and an increase in production efficiency. Most important in such cases information - this of the information about events inside chain of deliveries. This information allows for suppliers, producers and salesmen to coordinate their actions in order to satisfy the predictable demand with the smallest possible expenses.

This approach, however, is absolutely unfit for the innovativnykh products. In the case with the innovativnymi products prevailing prove to be the expenses of mediation; specifically, they, but not physical expenses, become the center of the attention of leaders. Critically important information in such cases find out of chain of deliveries - on the market. The very decisions of major importance, which must be assumed to management, in this case concern not the reduction of expenses and reserves, but that, in what place of chain of deliveries should be placed the reserves, necessary for the most complete satisfaction of the weakly predictable and rapidly passing demand.

Marshall Fisher proposes to examine the chains of deliveries from two conflicting points of view: physical effectiveness and reaction to the conditions of the market:

functional products practically never are supplied on the flexible chains (in other words, very difficult to find in the real life the situation, described by left lower cell in the table). The reason for this state of affairs lies in the fact that the absolute majority of companies, which generate functional products, very well understand the need for the adjusting of the effective chain of deliveries. Opposite situation, however, occurs sufficiently frequently.

For the companies, which one way or another arrived at the fact that are supplied the innovativnye products on the effective chain (right upper cell in the table), Fisher recommends two possible outputs:

to transfer product into the discharge of functional (to decrease the number of variations and the frequency of their appearance). This solution could you soak to the producers of the tooth paste, which at present produce more than 20 varieties of its product, but in this case they do not have profitability, which could actually make a tooth paste innovativnym product.
To transfer into the discharge of functional only part of the products, and for the rest to build the separate flexible chain of deliveries. This solution could you soak auto industry, which could transfer to the new flexible chain of deliveries expensive exclusive (i.e., innovativnye) automobiles like rodstera BMW Z3. as a result, innovativnye automobiles could be stored finished in the salons of the dealers, where this is very applied, but in the form of assemblies at the plant, where this is much cheaper. However, functional automobiles as before were manufactured and would be sold with the application of effective chains of delivery, which decrease the commodity reserves to the minimum.

To companies, which supply functional goods on the effective chains, Fisher recommends not to misuse by advertising campaigns with the proposal of product on the lowered price. Splash of demand appearing in such cases is completely capable to create plugs in the chain of deliveries, as this happened in company Campbell Soup , which generates the konservirovannye soups:

I finally for the companies, which supply innovativnye products on the flexible chains (and being encountered in this case the significant uncertainty of demand for his products), Fisher recommends three possible strategies (depending on situation can be used them both separately and together):

to decrease the uncertainty (this it is possible to attain, if we find the source of new data, which they will serve as the more precise indicator of demand)
to avoid the uncertainty (to decrease to the minimum the time of the preparation for production in order operationally to answer changes in the demand)
to insure from the uncertainty (to create in the chain of deliveries excess buffer commodity reserves or production capacities)

construction of the chain of deliveries, which corresponds to goods, prevents Fisher, it can prove to be the complex matter. However, the competitive advantage, which appears as a result, completely justifies labor input.

Thus, now already must be obvious that the solutions relatively SCM in the rationally organized company must start with the determination of market strategy of company, but in no way not during the construction of her information system. As to precisely reflect the already taken solutions in the turned information system - question, to which no and it cannot be united for all possible organizations answer.

Additional information you can obtain in company Interface Ltd.

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Chains of deliveries and information systems, or the history of one misunderstanding

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