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CONFIGURING A SUPPLY CHAIN TO REDUCE THE COST OF DEMAND UNCERTAINTY
Author(s) -
FISHER MARSHALL,
HAMMOND JANICE,
OBERMEYER WALTER,
RAMAN ANANTH
Publication year - 1997
Publication title -
production and operations management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 3.279
H-Index - 110
eISSN - 1937-5956
pISSN - 1059-1478
DOI - 10.1111/j.1937-5956.1997.tb00427.x
Subject(s) - intuition , lever , supply chain , computer science , on demand , demand management , business , microeconomics , operations research , risk analysis (engineering) , operations management , industrial organization , environmental economics , economics , marketing , physics , epistemology , quantum mechanics , engineering , macroeconomics , multimedia , philosophy
Reducing lead time enables a company to react more quickly to demand information and, hence, to better match supply with uncertain demand. But it is only one lever for improving response capability. Managers are familiar with others (e.g., excess capacity, supplier choice, and so forth) but lack techniques to quantify the impact of adjusting these levers. Here, we enumerate a number of these levers and present a model whereby they might be combined into effective response capability. The impact of adjusting these levers is illustrated by data obtained from a skiwear manufacturer that did so. Some of the insights that resulted run counter to intuition.