Cycle View of Supply Chain Processes
Cycle View: The processes in a supply chain are divided into a series of
cycles, each performed at the interface between two successive stages of
the supply chain.
Each cycle follows a similar pattern: a buyer places an order, the supplier
processes and fulfills it, and the buyer receives it
A cycle view of the supply chain clearly defines the processes involved and
the owners of each process.
This view is useful when considering operational decisions because it
specifies the roles and responsibilities of each member of the supply chain
and the desired outcome for each process.
One of the fulfillment models for the distribution network design
assumes that another firm will perform the fulfillment
– Advantages:
• low start-up costs for the retailer to service the Internet channel
• possible transportation economies
– Disadvantage:
• loss of control over service levels
3. Shipping via DC using Milk Runs
– Advantages:
Lower outbound transportation cost for small lots
– Disadvantage:
Further increase in
coordination complexity
4. Types of Logistics Relationships
Types of Relationships
• Vertical relationships
These refer to the traditional linkages between firms in the supply chain such as
retailers, distributors, manufacturers, and parts and materials suppliers.
• Horizontal relationships
Includes those business agreements between firms that have “parallel” or
cooperating positions in the logistics process.
Relationships may differ in numerous ways. A partial list includes:
• Duration
• Obligations
• Expectations
• Interaction/Communication
• Cooperation
• Planning
• Goals
• Performance analysis
• Benefits and burdens
Intel is one of the world’s largest manufacturers of computer chips, Intel needs little introduction.
However, the company needed to reduce supply chain expenditure significantly after bringing its
lowcost “Atom” chip to market. Supply chain costs of around $5.50 per chip were bearable for units
selling for $100, but the price of the new chip was a fraction of that, at about $20.
Somehow, Intel had to reduce the supply chain costs for the Atom chip, but had only one area of
leverage—inventory. The chip had to work, so Intel could make no service trade-offs. With each
Atom product being a single component, there was also no way to reduce duty payments.
Intel had already whittled packaging down to a minimum, and with a high value-to-weight ratio, the
chips’ distribution costs could not be pared down any further.
Intel is one of the world’s largest manufacturers of computer chips, Intel needs little introduction.
However, the company needed to reduce supply chain expenditure significantly after bringing its
low-cost "Atom" chip to market. Supply chain costs of around $5.50 per chip were bearable for units
selling for $100, but the price of the new chip was a fraction of that, at about $20.
Somehow, Intel had to reduce the supply chain costs for the Atom chip based on the semiconductor
industry: a true make to order scenario.
The company began with a pilot operation using a manufacturer in Malaysia, being single
component , there was also no way to pay less in the way of duties, Intel had already whittled
packaging down to a minimum, and with a high value-to-weight ratio, the chips’ distribution costs
could not be pared down any further.
but had only one area of leverage—inventory. The chip had to work, so Intel could make no service
trade-offs. With each Atom product being a single component, there was also no way to reduce
duty payments.
The only option was to try to reduce levels of inventory, which, up to that point, had been kept very
high to support a nine-week order cycle. The only way Intel could find to make supply chain cost
reductions was to bring this cycle time down and therefore reduce inventory.
Which one of the following strategies has the highest impact... to influence Intel's supply chains in
the short run...
1- work with our suppliers to share collective resources including planes and trucks, to deliver
the best solution for our customers.
2- Work closely with our suppliers to help ensure their employees’ health and safety,provide
suppliers assistant.