MIS-9
MIS-9
Management
Supply Chain Management
Supply Demand
Converter
Supplier Retailer
Distributor
Source
Converter Consumers
Distributor End-User
Supplier
Value-Added Goods
Funds/Demand Flow
Information Flow
Supplier Supplier
Manufacturer Distributor Customer
Tier-2 Tier-1
Ordering
The Bullwhip continued...
Bullwhip effect occurs because of various reasons:
• More number of players in supply chain
• Order Batching- Accumulate orders
• Shortage gaming- Ask for more than what is
needed
• Bulk discount purchasing
• Excessive dependent on forecasting
The Bullwhip in graphically
How to reduce Bull whip effect
• Segment customers based on product needs.
• Cultivate warm relationships with suppliers.
• Customize the logistics network.
• Develop forecasts collaboratively involving every link
of the supply chain.
• Use point of sales data other than forecast
• Delay product differentiation till the last possible
moment.
• Efficient supply chain management has to be
accompanied by a technology strategy.
• Use of EDI effectively within supply chain players.
Information Technologies (IT) in SCM
4. Blockchain
5. Cloud Computing
1. Enterprise Resource Planning (ERP)
in SCM
• ERP is a centralized software system that integrates all core supply chain
processes into a single platform.
Examples:
• SAP SCM – Provides end-to-end supply chain visibility.
• Oracle SCM Cloud – Offers AI-powered insights for demand forecasting.
2. Internet of Things (IoT) in SCM
• IoT involves interconnected smart devices that collect and exchange
real-time data to optimize supply chain operations.
Applications in SCM:
– Real-time Tracking – RFID and GPS sensors help track shipments and
inventory.
– Smart Warehousing – IoT-powered robots and automated inventory
systems streamline warehouse operations.
– Predictive Maintenance – Sensors detect potential equipment failures
before they happen, reducing downtime.
– Cold Chain Management – IoT monitors temperature-sensitive goods
(e.g., vaccines, food).
Example:
• DHL Smart Sensor Technology – Uses IoT for real-time shipment
tracking and condition monitoring.
3. Artificial Intelligence (AI) & Machine
Learning in SCM
• AI and ML use data-driven algorithms to improve supply chain
efficiency, forecasting, and automation.
• Applications:
– Demand Forecasting – AI predicts market trends and optimizes inventory
levels.
– Route Optimization – AI-powered tools determine the best delivery routes
to save time and fuel.
– Autonomous Decision-Making – AI-driven systems can make real-time
supply chain adjustments.
– Chatbots & Virtual Assistants – AI-powered bots handle supplier and
customer queries.
Example:
• Amazon’s AI-driven Logistics – Uses AI to optimize warehousing,
delivery routes, and inventory.
4. Blockchain Technology in SCM
• Blockchain is a decentralized digital ledger that records transactions
securely and transparently.
Benefits in SCM:
– Improved Traceability – Tracks product movement across the supply
chain.
– Fraud Prevention – Prevents counterfeit goods by verifying authenticity.
– Automated Smart Contracts – Reduces paperwork and speeds up
transactions.
– Enhanced Security – Tamper-proof data ensures trust between
stakeholders.
Example:
• IBM Food Trust – Uses blockchain to trace food products from farm
to table, improving food safety.
5. Cloud Computing & Big Data
Analytics in SCM
• Cloud computing provides on-demand data access, while big
data analytics processes large datasets for insights.
Advantages in SCM:
– Real-time Data Access – Enables remote monitoring of supply
chain activities.
– Scalability – Businesses can scale their IT infrastructure as needed.
– Improved Collaboration – Cloud platforms facilitate real-time
communication between suppliers, manufacturers, and distributors.
– Data-Driven Insights – Big data analytics helps in predicting
demand, identifying bottlenecks, and optimizing supply chain
operations.
Example:
• Alibaba Cloud SCM Solutions – Uses cloud-based analytics
for demand prediction and supplier management.