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Chapter 5

The document discusses the importance of demand management in supply chain management, highlighting the differences between demand forecasting and demand management. It covers various instruments for demand management, their potential effects, and the significance of collaborative planning and forecasting. Additionally, it outlines methods for quantifying demand scenarios and the implications of pricing policies on supply chain performance.
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0% found this document useful (0 votes)
4 views32 pages

Chapter 5

The document discusses the importance of demand management in supply chain management, highlighting the differences between demand forecasting and demand management. It covers various instruments for demand management, their potential effects, and the significance of collaborative planning and forecasting. Additionally, it outlines methods for quantifying demand scenarios and the implications of pricing policies on supply chain performance.
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Nyoman Pujawan, Ph.

D, CSCP
Professor of Supply Chain Engineering
Institut Teknologi Sepuluh Nopember (ITS) Surabaya
E-mail: pujawan@[Link]

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
• Mahasiswa bisa menjelaskan pentingnya demand
management pada supply chain Pokok Bahasan:
• Demand forecasting Vs demand management
• Mahasiswa bisa menjelaskan perbedaan antara
demand forecasting dengan demand • Instrumen untuk demand management
management (pricing, promotion, dll)
• Mahasiswa bisa menjelaskan sejumlah instrumen • Mengkuantifikasikan efek dari pricing policy
untuk demand management serta efek yang • Konsep CPFR dan event management
mungkin ditimbulkannya
• Mahasiswa bisa mengkuantifikasikan efek dari Metode:
skenario permintaan dengan fluktuasi yang
berbeda terhadap kinerja supply chain dengan • Ceramah
suatu model aggregate plan • Studi kasus
• Mahasiswa bisa menjelaskan konsep • Laboratorium
Collaborative Planning, Forecasting &
Replenishment
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
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Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Demand forecasting  the process that an organization takes to predict the
level of demand. Demand forecasting takes demand pattern as a given.
forecast sifatnya terlambat

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Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
• High forecast errors
• High inventory investments
• Low service levels (shortages often occurred)
• High cost of adjusting the level of capacity
• Fluctuated resource utilization

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
ex: harga bioskop weekdays weekend,
harga tiket pesawat high season

• Demand is never truly exogenous, but often very much dependent


on internal processes. Sales and marketing use promotion and
other means to inflate sales. While this is good in terms of
increasing sales volume, such an effort could result in a serious
danger if not communicated properly to the related functions in
the company as well as to other channels of the supply chain.
• Typical consequences:
• Serious out of stock - permainan harga
- permainan waktu penjualan
- positioning di rak
• Excessive inventory - memainkan behavior customer ->
nyantumin stok di online

firecast demand sifatnya given


Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
Actively seeks to ensure that the customer demand ‘profile’ as an input to
the demand-planning process is as smooth as possible in order to make
supply chain operations easier.

In other words, the company is not only passively process the given
demand, but is trying to reduce demand volatility, or improving demand
stability.

Thus, demand forecasting is REACTIVE, while demand management is


PROACTIVE to customer demand.

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Demand
Forecasting

Production
Production Delivery
Planning
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
• Pricing & Promotion: discounts, rebates, etc.
• Assortment & Shelf management
• Deal structure: terms and condition, price protection,
return policies. misal padakondisi peak gabole direfund, boleh pake qris or not, harus bayar sekrg atau boleh kredit

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
SNOP: menyeimbangkan perencaan supply dan demand (ex mengorbakan inventory cost agar adjust capacity)

• Decisions:
• What to produce, how many, and when in aggregate terms
• Number of workers to hire and layoff each period
• Amount of overtime
• Number of units subcontracted
• Parameters needed:
• Production rate
• Cost parameters (regular production, inventory holding, backlog, overtime,
subcontract, hiring, layoff)
• Capacity (regular, overtime, subcontract)

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Capacity
(regular, overtime, subcontracted)
Backlog/lost sales
due to delay

Inventory

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
• Chase  capacity as the lever (varying capacity to meet demand).
• Level  inventory as the lever (constant output rate, inventory
and/or backlog are used to meet demand variability)
• Mixed strategy  both capacity and inventory can vary.

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Parameters:
cH = cost of hiring one worker
cF = cost of firing one worker
h = cost of holding one unit of inventory for one period
cR = cost of producing one unit on regular time
cO = cost of producing one unit on overtime
cU=Idle cost per unit of production
cS= cost to subcontract one unit of product
nt = number of production days in period t
K = aggregate units produced by one worker in a day
I0 = initial inventory
W0 = initial workforce
Dt = forecast of demand in period t

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Variables
Wt= Work force level in period t
Pt = Production level in period t
It = Inventory level in period t
Ht = Number of workers hired in period t
Ft = Number of workers fired in period t
Ot = overtime production in units
Ut = Undertime (worker idle) in units
St = Number of units subcontracted in period t

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Objective Function:
Min. T
 (cH H t  cF Ft  cI It  cOOt  cUU t  cS St )
t 1

Subject to

Wt  Wt 1  H t  Ft
Pt  KntWt  Ot  U t
I t  I t 1  Pt  S t  Dt
H t , Ft , I t , Ot ,U t , St ,Wt , Pt  0
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
Demand
Costs
January 1600
February 3000
Material costs 10/unit
March 3200 Holding cost 2/unit/mth
April 3800 Stockout cost 5/unit/mth
May 2200 Hiring & training 300/worker
June 2200
Layoff 500/worker
Sale price 40/unit Labor hours (hrs) 4/unit
Starting inventory 1000 Regular time 4/hour
Starting workforce 80 Overtime 6/hour
Subcontracting 30/unit
Regular working hours 8/day
Maximum overtime 10 hrs/month
Inventory costs charged based on
end of period inventory
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
• Total costs over the planning period: $422,275
• Material costs
• Labor costs
• Inventory holding costs
• Stockout costs
• Layoff costs
• Hiring and training costs
• Overtime costs
• Subcontracting costs
• Revenue: $640,000
• Profit: $217,725

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Demand
January 3000
February 2400
March 2560
April 3800
May 2200
June 2200

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
• Costs $421,915
• Revenue $643,400
• Profit $221,485

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Demand
January 1600
February 3000
March 3200
April 5060
May 1760
June 1760

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
• Costs $438,857
• Revenue $650,140
• Profit $211,283

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi

• 

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi
Traditionally:
• Each function and each supply chain channel could have different
forecast figures

• Plans are developed in isolation from other supply chain channels

• Minimal communication and coordination between channels takes


place for corrective actions when actual production deviates from the
plan

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
The CPFR ® Process Model Seller

FRONT END AGREEMENT Collaborative


Planning
JOINT BUSINESS PLAN

CREATE SALES FORECAST Collaborative


Forecasting
IDENTIFY EXCEPTIONS

RESOLVE EXCEPTIONS

CREATE ORDER FORECAST


Buyer
IDENTIFY EXCEPTIONS

RESOLVE EXCEPTIONS

GENERATE ORDER

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
CPFR® Model

Planning

Forecasting

Replenishment

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
• 

• 

• 

• 

Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain


Management 3rd. Ed, Penerbit Andi
Pujawan, I N., and Mahendrawathi Er. (2017), Supply Chain
Management 3rd. Ed, Penerbit Andi

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