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Upstream
Downstream
Material Flow
Cash Flow
Information Flow
Quick Response?
Low costs? Make to order?
Make to stock?
2025 2035
2015 Spring
• Market Mediation
o Ensuring that the right variety of products are available at the right place, at
the right time, in the right quantities
Functional Innovative
Trade-off
Improvement
Low Cost
Produce Life
Long Short
Cycle
Demand
Low High
Uncertainly
Profit Margin
Low High
Product Value
Low High
Product
Low High
Variety
High
Tier 1 Manufacturer Distributor Retailer Customer stockouts
Supplier
Glitch-Wrong Material,
High inventories Ineffective High landed costs
Machine is Down –
through the chain promotions to the shelf
effect snowballs
Challenges Implications
Increasing demand and supply uncertainties Uncertainty drives need for flexibility
Shortening product and technology cycles Dynamic instead of static supply chains
Multiple outsourced supply chain partners Differential interests of multiple players
Sequential Optimization