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<shoumen@>
What to do ?
• Understand customer need • Monitor supply availability • Manage supply chain partner performance • Decentralize problem solving • Monitor corrective actions and feedback • Include macro-economic indicators
Disclaimer: Opinions expressed in this presentation are that of the author. It does not represent the consensus opinion of MIT as an institution or other faculty that may be directly or indirectly associated with MIT School of Engineering or MIT Sloan School.
W AREHOUSE
MEDIA / POP
Amateur's Design Forum
Amateur Models
ERP
World History of Fashion
Celebrity Gallery
The Way We Wore
TRAVEL HEALTH EDUCATION ARTS & MUSIC
Data Warehouse Data mining Data Mart Retailers
USD, DEM EURO, INR YEN, YUAN
Accessories Jewelry, Shoes Shiseido, Coach
Harrod's, M&S
Gucci, Bally's
Guerlain, Polo
Manufacturer
PERSONAL PROFILE
SOFTWARE
MIT Forum for Supply Chain Innovation
<shoumen@>
Source: AMR Research 1999 October
20
15 10
CRM $ billion
1997
1999
Digitally speaking
MIT Forum for Supply Chain Innovation
<shoumen@>
Part of the Process
MIT Forum for Supply Chain Innovation
<shoumen@>
PERSONAL DIGITAL PROFILE
<shoumen@>
U n c e r t a i n t y…….
Lack of rule-based resolution: expectation vs result
Financial Impact Cost of Correction Side Effects
MIT Forum for Supply Chain Innovation
Side Effects (undesirable)
Tackle only symptoms Negative fall out
MIT Forum for Supply Chain Innovation
<shoumen@>
EBM in SCM offers little ADAPTABILITY to SENSE and RESPOND ( Supply Chain Event mis-Management )
MIT Forum for Supply Chain Innovation
<shoumen@>
Evolving Analytical Tools and Early Users
Source: Forrester MIT Forum for Supply Chain Innovation
MIT Course 1.270 / ESD.273 (Fall 2002 MW 4:00-5:30 Rm 1-246)
Logistics & Supply Chain Management PROFESSOR DAVID SIMCHI-LEVI
Uncertainty in Demand Pipelines Ignites Supply Nets
MIT Forum for Supply Chain Innovation
<shoumen@>
BODY SCANNER BY TC2
MIT Forum for Supply Chain Innovation
<shoumen@>
Invasion of the Body Scanners
• Insulation of Planning from Execution • Individual optimisation not SC optimisation • Smart-Hub and Dumb-Spoke Configuration • Isolation of Environment of Operation
9th October 2002
by Shoumen Datta, Research Scientist Engineering Systems Division, School of Engineering Executive Director, Forum for Supply Chain Innovation /innovation
<shoumen@>
Source: Forrester Research MIT Forum for Supply Chain Innovation
<shoumen@>
Source: Forrester MIT Forum for Supply Chain Innovation
MIT Forum for Supply Chain Innovation
<shoumen@>
Retailer: What should we order for Fall ? Customer: How will I look in this dress? Manufacturer: What’s the next demand?
2001
5
0 2003
1997 C8 2.3
1999 3.7
2000 5.4
2001 7.9
2002 11.5
2003 16.8
Customer Relationship Management EXPECTATION vs RESULT
MIT Forum for Supply Chain Innovation
MIT Forum for Supply Chain Innovation
<shoumen@>
Source: Forrester
MIT Forum for Supply Chain Innovation
<shoumen@>
Traditional Adaptive
Source: Forrester MIT Forum for Supply Chain Innovation
Tailors -----------------Contract Shops
Individual Tailors On-call
RETAILERS
MACYS, NORDSTROM, BLOOMINGDALES
China, India, Siam
FABRIC SUPPLIERS
Global Design
<shoumen@>
Source: HP & Forrester
Portfolio of Real Options
MIT Forum for Supply Chain Innovation
<shoumen@>
U n c e r t a i n t y…….
Financial Impact
Education Course 1.270 / ESD.273
MIT Forum for Supply Chain Innovation
<shoumen@>
Nobel Prize in Economics 2002
(announced today, 09 Oct 2002)
"for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty"
MIT Forum for Supply Chain Innovation
<shoumen@>
Today’s discussion
UNCERTAINTY
SCM is managing uncertainty.
URL for powerpoint presentation /innovation
Portal
eFASHION
PERSONAL PROFILE ANALYSIS
MALL
Julia aRoberts
m
Preference Survey
BODY SCAN
EBC B2B
Data Warehouse
Anne Klein Levis, Bebe Talbots, AX
Order
FABRIC BROKER
Opportunity lost: unable to ramp up Economic loss: unable to ramp down
MIT Forum for Supply Chain Innovation
<shoumen@>
U n c e r t a i n t y……. Push-Pull Case Study by DSL
<shoumen@>
U n c e r t a i n t y…….
Cost of Correction
Resources Inventory
MIT Forum for Supply Chain Innovation
<shoumen@>
U n c e r t a i n t y…….
<shoumen@>
U n c e r t a i n t y…….
Financial Impact
Opportunity lost: unable to ramp up Economic loss: unable to ramp down
MIT Forum for Supply Chain Innovation
b. 1934
b. 1927
"for having established laboratory experiments as a tool in
empirical economic analysis, especially in the study of
alternative market mechanisms"
Daniel Kahneman
1/2 of the prize
USA and Israel
Vernon L. Smith
1/2 of the prize
USA
Princeton University Princeton, NJ, USA
George Mason University Fairfax, VA, USA
INDEPENDENT
DESIGN BROKER
CRM
RETURN
Financial
SHIPPING
DONATE
Salvation Army CARE
Goodwill
SHIPPING
eBAY Boutiques J C Penney Outlet Stores
Manufacturing Tailor Broker
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