INTERMODE: innovations in demand responsive transport: final report. Graham Parkhurst. Download with Google Download with Facebook. Create a free account to. Dec 27, 2014 Gibbs C., Gretzel U. (2015) Drivers of Responsive Website Design Innovation by Destination Marketing Organizations. In: Tussyadiah I., Inversini A. (eds) Information and Communication Technologies in Tourism 2015.
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Supply chain capabilities are guided by the decisions you make regarding the five supply chain drivers. Each of these drivers can be developed and managed to emphasize responsiveness or efficiency depending on changing business requirements. As you investigate how a supply chain works, you learn about the demands it faces and the capabilities it needs to be successful. Adjust the supply chain drivers as needed to get those capabilities.
The five drivers provide a useful framework for thinking about supply chain capabilities. Decisions made about how each driver operates will determine the blend of responsiveness and efficiency a supply chain is capable of achieving. The five drivers are illustrated in the diagram below:
1. PRODUCTION – This driver can be made very responsive by building factories that have a lot of excess capacity and use flexible manufacturing techniques to produce a wide range of items. To be even more responsive, a company could do their production in many smaller plants that are close to major groups of customers so delivery times would be shorter. If efficiency is desirable, then a company can build factories with very little excess capacity and have those factories optimized for producing a limited range of items. Further efficiency can also be gained by centralizing production in large central plants to get better economies of scale, even though delivery times might be longer.
[Simulate decisions about production in SCM Globe by defining different products and facilities in the supply chain, and select locations for the facilities that make those products.]
2. INVENTORY – Responsiveness can be had by stocking high levels of inventory for a wide range of products. Additional responsiveness can be gained by stocking products at many locations so as to have the inventory close to customers and available to them immediately. Efficiency in inventory management would call for reducing inventory levels of all items and especially of items that do not sell as frequently. Also, economies of scale and cost savings can be gotten by stocking inventory in only a few central locations such as regional distribution centers (DCs).
[Decisions about inventory are simulated by setting production rates and delivery schedules for products, and by defining on-hand amounts for different products at facilities throughout the supply chain.]
3. LOCATION – A location decision that emphasizes responsiveness would be one where a company establishes many locations that are close to its customer base. For example, fast-food chains use location to be very responsive to their customers by opening up lots of stores in high volume markets. Efficiency can be achieved by operating from only a few locations and centralizing activities in common locations. An example of this is the way e-commerce retailers serve large geographical markets from only a few central locations that perform a wide range of activities.
[Simulate this decision by placing your facilities (factories, warehouses, stores) in selected locations, and then define the storage capacities and operating expenses for those facilities. The screenshot below shows an example of this.]
(click on screenshot to see larger image — from Cincinnati Seasonings case study)
4. TRANSPORTATION – Responsiveness can be achieved by a transportation mode that is fast and flexible such as trucks and airplanes. Many companies that sell products through catalogs or on the Internet are able to provide high levels of responsiveness by using transportation to deliver their products often within 48 hours or less. FedEx and UPS are two companies that can provide very responsive transportation services. And now Amazon is expanding and operating its own transportation services in high volume markets to be more responsive to customer desires. Efficiency can be emphasized by transporting products in larger batches and doing it less often. The use of transportation modes such as ship, railroad, and pipelines can be very efficient. Transportation can also be made more efficient if it is originated out of a central hub facility or distribution center (DC) instead of from many separate branch locations.
[Simulate transportation decisions in SCM Globe by the modes of transportation (truck, railroad, ship, airplane) you use to move products between facilities, and by the delivery routes and frequencies you define.]
5. INFORMATION – The power of this driver grows stronger every year as the technology for collecting and sharing information becomes more wide spread, easier to use, and less expensive. Information, much like money, is a very useful commodity because it can be applied directly to enhance the performance of the other four supply chain drivers. High levels of responsiveness can be achieved when companies collect and share accurate and timely data generated by the operations of the other four drivers. An example of this is the supply chains that serve the electronics market; they are some of the most responsive in the world. Companies in these supply chains, the manufacturers, distributors, and the big retailers all collect and share data about customer demand, production schedules, and inventory levels. This enables companies in these supply chains to respond quickly to situations and new market demands in the high-change and unpredictable world of electronic devices (smartphones, sensors, home entertainment and video game equipment, etc.).
[SCM Globe simulations generate daily performance data on operating costs and inventory levels for all the facilities in the supply chain. As you run a simulation you can see what is happening from end to end across your supply chain. At present most companies don’t have access to this kind of data about the overall status of the supply chains they participate in — but that will change as all markets take on the high-change and unpredictable nature seen in the electronics market.]
The table below summarizes what can be done to guide the five supply chain drivers toward responsiveness or efficiency. Companies and supply chains continually adjust their mix of responsiveness and efficiency as situations change.
Over the long run, the cost of one driver — Information — continues to drop while the cost of the other four drivers continues to rise. Companies that make best use of information to increase their internal efficiency, and increase their responsiveness to external supply chain partners will gain the most customers and be the most profitable.
WHEN TO BE EFFICIENT AND WHEN TO BE RESPONSIVE
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Efficiency is good — In the 20th century, efficiency drove economic growth. The push for efficiency increased productivity and lowered the prices of products from automobiles to home appliances thus making them available to a wide segment of the population. Yet efficiency requires two things that are becoming much harder to find. The first thing is predictability. To efficiently plan and manage production and distribution of products you need to know what the demand will be for those products, and you need to know what the cost of raw materials will be and what the selling prices will be for the products. Then you can optimize your operations to produce the right amounts at the right prices and maximize profits.
Efficiency also requires one more thing — stability. You need to know that demand and prices will remain relatively stable for some number of years (5 or 10 years or more). Because then you can build factories and stores and transportation infrastructure to enable your efficient operating model. Efficiency is best when producing relatively simple commodity products and services that sell in more predictable and stable markets.
Responsiveness is better — In the 21st century, responsiveness drives the economy. Responsiveness is what drives continuous innovation in products and technology and continuous change in the ways we organize businesses and serve customers. The big companies of the 20th century were efficient manufacturing companies (Ford, GM, US Steel, Kodak, Whirlpool etc.), but the big companies of the 21st century are responsive service and technology companies (Alibaba, Amazon, Apple, Facebook, Google, Starbucks, Tencent, etc.). All these 21st century companies certainly need to be efficient, but their success is based mostly on their ability to sense and respond quickly to changing markets and evolving customer desires. Lowest price is not always the deciding factor in purchasing decisions. People want products and services that respond quickly and meet their changing needs and desires.
Apple and Starbucks do not sell the lowest priced laptops or cups of coffee, nor does Porsche or Tesla make the lowest priced automobiles, but as long as people value the quality and innovation offered by those companies and others like them, they will pay more for their products. Home delivery of everything from clothes to groceries costs a bit more, but people value and pay for the responsiveness and convenience of those services. Responsiveness is best when providing complex or unique products and services that sell in continuously changing markets driven by evolving technology and new customer needs and desires.
THE RIGHT MIX OF EFFICIENCY AND RESPONSIVENESS
Even within supply chains that emphasize responsiveness, there are segments of those supply chains that should focus on efficiency. Efficiency is critical wherever there are high volumes of predictable products moving between facilities. For example, segments of supply chains that connect factories with warehouses or distribution centers should be as efficient as possible. They should use the most efficient transportation modes and delivery schedules, and those facilities should automate their operations as much as possible.
However, segments of supply chains that connect distribution centers to end use consumers usually focus on responsiveness. These are known as “last mile” deliveries. They use transportation modes and delivery schedules that emphasize responsiveness because customers have come to expect fast delivery of products. In every supply chain some operations will need to focus on efficiency and others on responsiveness. That mix continues to shift over time as customer preferences, market conditions, and technologies change.
New technologies such as robots, drones, artificial intelligence and 3D printing are making big impacts on how supply chains operate. And yet after all is said and done, these new technologies can be employed to do one of two things: increase efficiency or increase responsiveness (or some blend of the two). See our blog article “Five New Supply Chain Technologies and How to Use Them” for ideas about how new technologies can be used to improve efficiency and responsiveness of the supply chain drivers, and create supply chains that become competitive advantages.
One company making good use of information and technology to manage their supply chain drivers is Zara Clothing Company. Zara’s supply chain is a big competitive advantage (screenshot below shows design of Zara’s supply chain in Spain). It sells unique clothing products in a constantly changing market shaped by popular fashion and new customer desires. See our case study about how Zara’s supply chain makes it’s unique business model such a success – “Zara Clothing Company Supply Chain“.
SCM Globe Rt systems usb devices driver download for windows. is a “sandbox” where you can model real supply chains or design new ones anywhere in the world and run simulations to see how well they work. We are glad to provide a free evaluation account to instructors, students and supply chain professionals interested in exploring supply chain simulations — click here to request an account — Get Your Free Trial Demo
Part of this article is excerpted from my book Essentials of Supply Chain Management, 4th Edition, 2018
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The supply chain is a complex, multi-faceted process encompassing everything from warehouse fulfillment to logistics. With many companies continuing to work towards supply chain optimization, the industry is ripe for innovation. As new technologies emerge that hold promise for streamlining fulfillment processes to speeding logistics, the traditional supply chain is rapidly transforming into a more advanced, more functional process driven by digital technology, artificial intelligence and other innovations. Listed in no particular order, here’s a look at eight of the most prominent innovations that are transforming supply chains.
Last-mile delivery
Companies like UPS are developing innovative programs that aim to solve the last-mile delivery challenge. The company launched an electric bike program, eBike, which expedites deliveries in areas with limited parking. The program launched in Portland, Oregon and Pittsburgh, Pennsylvania, with the added bonus of reducing harmful emissions. Programs like UPS’ eBike support the demand for rapid delivery and enable companies to meet same-day and next-day delivery promises even in congested urban areas.
Self-service/do-it-yourself logistics
With self-service and do-it-yourself logistics programs like Amazon’s Flex program, individuals can launch and run their own logistics companies to deliver Amazon packages, even employing a fleet of drivers and vehicles if they choose. While self-service logistics programs don’t resolve the truck driver shortage problem, they do offer an alternative for companies that face challenges with traditional logistics services.
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On-demand warehousing
On-demand warehousing, part of what’s considered the shared economy, is another supply chain innovation that addresses a common pain point — in this case, companies that need additional warehouse space temporarily but don’t want to take on the operating costs of opening a new warehouse facility. To solve this challenge, companies like Flexe connect companies in need of warehouse space with businesses that have space available. It’s a win-win, helping warehouse companies minimize operating costs by eliminating the need to expand for short-term needs, while offering participating warehouses an opportunity to monetize their available space.
Collaborative mobile robots
Collaborative mobile robots offer greater flexibility and scalability compared to traditional warehouse automation solutions, increasing order picking efficiency and improving accuracy by guiding associates through tasks. By optimizing picking routes in real-time, collaborative mobile robots like 6 River Systems’ Chuck reduce unnecessary walking and improve warehouse productivity. Much like on-demand warehousing makes it possible to secure additional warehouse space as needed without infrastructure investments, companies can rent 6 River Systems’ collaborative mobile robots to increase capacity during peak, returning them when demand returns to normal.
Truck platooning
Truck platooning is an emerging concept that allows greater vehicle-to-vehicle communication, enabling trucks to travel at a closer distance than usual while in constant communication. Traveling closely reduces drag, which improves fuel efficiency, resulting in safer, more fuel-efficient transportation which can help to reduce logistics costs.
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Blockchain
A blockchain is a permanent ledger of transactions that can improve transparency, reliability and efficiency in supply chains. While the concept of blockchain for the supply chain is still in development, it holds promise for all industries. In the pharmaceutical industry, for instance, where an estimated one million deaths each year are attributed to counterfeit medications and 30% of pharmaceuticals sold in developing markets are counterfeit, blockchain could potentially reduce this risk. Likewise, the automotive industry could use blockchain to track parts and identify counterfeits. Lab simulations show that blockchain could handle more than seven billion unique serial numbers and 1,500 transactions per second.
Tagging, sensors and geolocation technologies
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Innovations like tagging, sensors and geolocation technologies go hand-in-hand with blockchain, providing real-time tracking of individual parts and goods to improve traceability and transparency. Security-center Gmbh & Co. Kg Driver Download for windows. Using one such technology, RFID-IV, the U.S. Department of Defense tracks and monitors 24,000 high-value military assets worldwide, offering in-transit visibility and reliability while eliminating blind spots in the supply chain. This technology offers real-time alerts for issues such as tampering, delays or assets that enter or exit pre-determined geographical zones, allowing the DoD to implement contingency plans and mitigate delays.
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Big data and AI
Supported by the real-time tracking technologies mentioned above, big data and artificial intelligence are also transforming the supply chain. In fact, it’s not the tracking devices themselves that make the DoD’s alerts possible, but tracking devices paired with cloud-based visibility and analytics platforms. With the use of IoT devices, companies can share supply chain information without the need for human interaction, and by leveraging big data, artificial intelligence technologies transform raw data into actionable insights that aid decision-making. A variety of supply chain innovations (such as collaborative mobile robots and drones) and even legacy functions like fleet optimization leverage AI for smarter decision-making.
These eight innovations certainly aren’t the only technologies shaking up the supply chain, but they are some of the most promising. Companies won’t stop innovating anytime soon, so even more innovative technologies are on the horizon for the supply chain industry.