Institutional Discrimination

In the United States, institutionalized discrimination occurs everyday. According to Aguirre and Turner (2010) it is both subtle and complex. Because discrimination based on race is illegal, many acts of institutionalized discrimination are informal; a company, school, government, or other public institution does not formally write them in a policy. â€Å"Yet individual acts of informal discrimination are so widespread in many communities that discrimination is informally institutionalized even in the face of formal prohibitions† (Aguirre and Turner, 2010).Despite, being outlawed nationally, discrimination still exists. My first example of institutionalized discrimination exists in the public school system. There is a huge educational gap among urban public schools and suburban public schools, essentially, among white and minority students. In many states, educational systems have imposed standardized testing as a requirement for graduation from high school. I believe that the se implementations are a strategic effort to weed out minorities from achieving higher education and decrease the opportunity to move up in social class.Though state educational systems cannot formally institute discriminatory practices, they can subtly implement requirements such as these testing procedures. As a product of an inner city urban public school, I have experienced this first hand. Guiner and Torres (2009) discussed that a lack of education hinders social mobility, which essentially reinforces racial inequality. From third grade until passing the eleventh grade EXIT Level Texas Assessment of Knowledge and Skills exam, also known as the TAKS test, I was taught how to pass the TAKS test. I wasn’t taught the necessary skills needed to be successful in college.As a student who took all of the AP classes offered at my school, I was not taught to the level to pass these AP test to test out of college general education classes and I wasn’t taught on the college l evel, as the courses are designed for. As a result, upon entering college, although I had taken several AP courses during high school I had earned zero college credit hours. I was also not prepared for college level courses, I was not used to having homework, or test taking outside of the TAKS test, and didn’t feel that I possessed the skills necessary to be successful in college.This was true among many of my high school peers; many weren’t able to survive in college and dropped out after a year, some after a semester. As Aguirre and Turner (2010) put it â€Å"The school may not have intended his to occur—indeed, just the opposite—but the very nature of its structure and operation has worked to discourage students and, in so doing, has subtly and inadvertently discriminated against students†¦Ã¢â‚¬  (pg. 13) This contributes to racial inequality because statistically blacks are less prepared, and subsequently less successful in college than whites. A solution to this form of institutionalized discrimination in schools would be to eliminate standardized testing. Too much time is put into passing a test so that the school can have high numbers and not enough time is put into teaching students skills needed for achieving higher education. After talking to many of my white counterparts, I learned that their high schools spent little, if any time, teaching its students how to pass the TAKS test; they focused on college preparation.Standardized tests are not an accurate depiction of a school’s success; they unfairly hinder graduation rates and are sending young adults into society unprepared. In addition to eliminating standardized testing, schools should focus more on rigorous college level work and teaching time management skills. Because the differences in higher education preparedness is usually among Whites from suburban areas vs. Blacks and Hispanics from poor urban areas, these solutions would help close the gap. My se cond example of institutional discrimination is â€Å"steering. Steering occurs when realtors steer minorities to neighborhoods where the majority of residents are also minorities. Steering also occurs when realtors fail to inform customers of properties that meet the customers’ preferences or specifications. The purpose of this is to subtly segregate those of the same race in the same neighborhood. â€Å"The combination of growing urban Black populations and higher levels of segregation could only produce one possible outcome—higher levels of Black isolation† (Gallagher, 2009).As a result, racially segregated neighborhoods are either really nice, clean, suburban neighborhoods with low crime rates, good schools, grocery stores with healthy eating options, and shopping centers or dirty urban neighborhoods with high crime rates, low performing schools, grocery stores with bad produce and fast food restaurants with unhealthy eating options, and people having to go across town to go shopping for essentials. Racial steering not only reinforces racial inequality, it also hinders diversity.Racial steering must be stopped It would be very difficult to find a solution to eliminate racial steering. Housing acts already exist to eliminate housing discrimination but these laws may need to be expanded. The Fair Housing Act, a subsection of the Civil Rights Act of 1968 prohibits discrimination dealing with the sale, rental, or financing of housing based on race, sex, religion, or national origin. (Employment-discrimination. org) Real estate agencies should be required to show customers all housing options that meet their preferences.There should be a national database that provides realtors and real estate clients with all of the properties that meet preferences so that no available property is left out because the person is of a certain race. My third example of institutional discrimination is â€Å"redlining. † This is when banks deny or make it more difficult for people to get loans, health care, or insurance because they live in a certain area. The particular area is usually characterized by a specific race. Those who exercise red lining use â€Å"blacklists† to keep track of groups or certain areas to use for discriminatory practices.One of the most important solutions to redlining was the Fair Housing Act of 1968 which prohibited redlining that was based on race, sex, religion, gamily status, disability or ethnic origin (Wikipedia). To further the impact of this act, I think it would be important to require banks, insurance companies, and other institutions to keep information regarding their targeting of certain poverty stricken areas or racially dominated areas. This would be something similar to the guidelines of affirmative action, requiring firms to specifically target those of minority groups who are qualified.The qualifications would be based off of past financial credibility or government programs that assist those who can’t afford to pay on their own. All groups of people should have equal access to resources. Minorities shouldn’t have to worry about getting denied or have less access because of the color of their skin. â€Å"In the United States, civil rights laws and cultural beliefs do not condone discrimination as they once did; indeed they demand that all individuals be given equal access to schools, jobs, housing, and other important resources. The United States has been trying to eliminate discrimination for hundreds of years. However, because institutional discrimination is so subtle is difficult to do so completely. Many times institutional discrimination is exercised unconsciously due to the nature in which an institution is set up. Other times, institutional discrimination is very consciously practiced informally. Because of laws that explicitly prohibit discrimination, institutions strategically discriminate against individuals and racial groups by not giving them equal access to resources.This discrimination continues to contribute to racial inequality in education, housing, health care, employment, and other aspects of human life. Not only do basic discrimination laws need to be expanded, but affirmative actions laws need to be expanded as well. A major solution to discrimination is education. Minorities need to be educated themselves about the ways in which they are being denied to access to resources. The fight for equality is not over.

Olympic rent-a-car company Essay

SUMMARY Olympic is a US rent-a-car company facing some changes in the market it operates. A competitor company (Enterprise) is changing its loyalty program. Olympic managers have to evaluate the impact of those changes and to take actions in order to respond correctly to those changes without losing market share and if possible taking advantage of the situation. The aim of this study is to evaluate those changes and to propose a recommendation to respond to these market changes. MARKET SUMMARY The car renting industry in US is a $24 billion industry dominated by 4 big players, Enterprise, Hertz, AVIS and Olympic with the following market revenue shares: Enterprise is the dominant player with 50% share ($12 billion) followed by Hertz with 24%, AVIS with 14%, Olympic with 7% and the other 5% are shared by smaller players. This business is heavily dependent of the overall state of the economy and since the global crisis of 2008 were there was a 6,5% break in total revenues, the revenues are recovering since 2009 growing between 2 and 3% every year. This revenue growth is due to the growth of prices rather to the growth in the number of clients. There are 2 big markets for the rent-a-car business, the Airport rentals and the Local rentals. The airport rentals contribute with 50% of the total revenue ($12 billion) and are divided into leisure and business clients. Costs are higher due to fees paid to the airports that consist in 10% of the revenue plus the fixed fees for counters. The local renting contributes with the other 50% ($12 billion) and the main clients are insurance companies. The counters are located at car dealerships and repair shops. Enterprise and Hertz are the main players in this market and Enterprise has more than 50% share. This industry is heavily influenced by the adaptation of the car fleet to demand and between 2008 and 2012 in response to the global crisis the total number of rent-a-car cars was diminished by 0,5%. CUSTOMER ANALYSIS In 2012, 27% of US adults (proximately 59.400.000 people) rented a car and the main renters were the business travelers. In 2012 airport market, 20% of the travelers were business travelers and gave origin to 80% of the revenue and the other 80% of travelers were leisure travelers and represent 20% of the revenues. Usually business travellers pay more than leisure travellers. This is mainly because leisure travelers pay smaller per day charges as they travel in lower revenue days, do preplanned trips and to loyalty program redemptions. Business travelers tend to earn points in business travelling and to spend those points in leisure travelling. Across this industry, Rent-A-Car companies tend to use loyalty programs to develop relationship between costumers. Each company has it’s own program but they are all very similar. The customer earns points depending of the number of days they rent the car and they also receive free upgrades. The earned points can be claimed and exchanged for rental days. In 2013 Enterprise changed the way their customers gain the loyalty program points. Customers that received points based in the number of days of usage now receive points based on the money they spend. This means that they earn more points faster. Usually clients don’t have any kind of restriction to participate in loyalty programs. Anyone that rents a car can be a member depending on the number of days they rent, as consequence people are members of several loyalty programs as they rent in different companies. The rental loyalty programs are not really differentiating rental companies they are a perk for customers. In 2012 10% of Olympic customers were members of Olympic medalist program and these customers provided 21% of the revenues. They paid for 3.996.000 days and claimed 375.000 free days. This means $323.400.000 of revenue come from members of Olympic medalist program, to this revenue we have to subtract the fixed costs, the free days cost and the program advertising costs ($28.000.000). The fixed cost is 20% of $21 ($4,2) multiplied by the total rental days and equal $1.575.000 and the free days cost is equal to $7.629.552. This gives an economic value of $233 per Olympic medalist program customer. The regular customers represent 79% of revenues that translate into $1.216.600.000. The total rental days for these customers are 24.681.000 and these days represent a cost of $103.660.200 (24.681.000 x $4,2). There are also the advertising costs of ($108.000.000 – $28.000.000 = $80.000.000). Subtracting to $1.216.600.000 the variable costs and the advertising costs we end with $1.032.939.800. Dividing this value by the total number of regular customers (11.052.000) the economic value of the regular customer is obtained and equals to $93. The conclusion is that loyalty program clients  still have a big economic influence in the revenue structure. COMPANY ANALYSIS Olympic is one of the four biggest rent-a-car companies in the US with a share of 7% of revenues witch is the smallest share of this group. The company as chosen to be a follower and has always priced lower than Hertz. It has 464 rental locations and a fleet of 108000 cars that remain in the company for 8 to 18 months. The income per car is slightly below de industry average and the reason for this maybe the dominance of airport counters that bring more costs to the company than a local counter. Olympic has seen an improvement on its revenues for the last 4 years and in table 1 we can see an increase of the net profit from a loss of $15 million in 2008 to a profit of $32 million in 2012. The main reason for these results is the company flexibility to adapt its car fleet to demand (table 2) as well as the adaptation of the number of counters the company has (table 3). RECOMMENDATION The recommendation is that Olympic rent-a-car doesn’t follow the Enterprise strategy. About 1,45% of the total rental days of 2012 involved free days and a free day reward costs about $21 to cover the fixed costs and the payment to the franchisee. Of the 108000 cars fleet each car was rented about 232 days per year. With this data we can calculate the total rental days. Total rental days are equal to 108.000 x 232; this means 25.056.000 rental days per year.  The 1,45% of the total rental days give us the total free days per year in 2012 this percentage represents 363.312 free days that multiplied by the cost of a free day ($21) will give us the cost of all the free days in 2012. The total cost for the free days is equal to $7.629.552. If Olympic decides to match the Enterprise offer, the number of free days will increase to a value between 1,65% and 1,95% of total rental days this means a number of free days between 413424 and 488592 and an increase of free days per year between 50.112 and 125.280 days, this means an increase in cost of the programs free days of $1.052.352 to $2.630.880 (1 million to 2,5 millions increase of free days cost per year). Considering that the demand will not increase a lot this means a net decrease of 3 to 8% of total profits. This decrease is significant for a company that has a small operating margin of 15,8%. The way Olympic responds to the enterprise initiative will be decisive in the profitability of the company. Matching the enterprise offer will lead to an increase in the costs and no increase in market share is guaranteed. Since no great increase in demand is predicted, following the Enterprise strategy would simply represent a 3 to 8% reduction in profits, Olympic cannot afford this reduction due to the narrow operating margin. Beside this, the fleet of Olympic rent-a-car is very well adapted to de demand and implementing no blackout days would probably let some Olympic medalist clients unsatisfied. Enterprise has a huge fleet and available cars this means that it can afford not having blackout days. The increasing usage of the Internet to compare prices and to book services will diminish the loyalty programs importance and effectiveness. Third party consolidators the online price comparisons and bookings bring a greater relevance to prices the rent-a-car companies practice. This will affect the companies’ loyalty programs effectiveness. By focusing on price, customers will chose a rent-a-car company by the price of the service taking to a second plan the loyalty programs benefits. This means that Olympic should focus on global cost reduction in order to keep lowering the prices and therefore gain advantage over the competitors. In the future the company  that has the lower prices will dominate the market. One other market tendency is the reduction of business travelling and the growth of internet based communications. This means that in future rent-a-car companies will have less business travellers, at this moment these clients are the heavy users of loyalty programs, and the leisure clients will gain weight on the revenue share. Olympic should maintain their loyalty program essentially due to the economic value of the loyalty programs customers ($233) much greater them the regular clients ($93) and improve the program by offering other kind of benefits that could improve the market penetration of the program. Some of these benefits could be faster pick up and drop off time for the program customers. Along the way the company could evaluate their loyalty program customers economic value and adapt to the expected decrease of loyalty program importance by reducing free rental days and using the savings of this reduction on rental price reduction. Since loyalty programs don’t benefit business companies Olympic offer the chance to this kind of customer to choose between the loyalty program benefits or a decrease in price. This should attract more large companies business maintaining the small and individual share. To reduce the cost structure Olympic should also try to gain market in the local business dominated by Enterprise and Hertz, this would help to avoid the large costs associated to the operation in airports. This way Olympic could gain market share of a market dominated by 2 companies, maintain their business market share threatened by the teleconferencing trends (shift to insurance) and to improve the global cost structure by taking advantage of the lower costs associated to this kind of counters.

Information Sharing for the Bullwhip Effect

Information sharing for the bullwhip effect: over- or underestimated? Bachelor thesis: Thesis Circle: Organization studies, 2nd semester, academic year 2011-2012 Time will tell†¦. A processes perspective on inter-organizational collaboration Name: ANR: E-mail: PC Jansen 770926 P. C. [email  protected] nl Information sharing for the bullwhip effect: over- or underestimated? Abstract This literature review investigates the effect of information sharing from a buyer to a supplier in a supply chain on the performance of that supplier, with taking in mind that the supplier has to combat the bullwhip effect.With the existence of the bullwhip effect, a supplier cannot make right forecasts and therefore has difficulties in planning its production and/or inventory control. This research shows that information sharing is the key solution to reduce or avoid the bullwhip effect and, by that, is positively influences the performance of the supplier in the chain. Keywords: Bullwhip, supply chain, information sharing, supplier performance, inventory control Thesis Circle: Time will tell†¦. A processes perspective on inter-organizational collaborationSupervisor: Remco Mannak Supervisor 2: Annemieke Stoppelenburg Name: ANR: E-mail: PC Jansen 770926 P. C. [email  protected] nl 2 Table of contents Table of contents 1. Introduction 2. Theoretical Framework 2. 1 Performance of a supplier 2. 2 Information sharing 2. 3 Bullwhip effect 3. Methodology 3. 1 Data collection 3. 2 Quality Indicators 4. Results 4. 1 Information sharing is the key solution 4. 2 Information sharing is not the key solution 5. Conclusion and recommendations 5. 1 Conclusion 5. 2 Recommendations for future research 6.Discussion and reflection 6. 1 Discussion 6. 2 Reflection 7. References 3 4 7 7 7 9 11 11 12 13 13 21 24 24 26 28 28 29 30 3 1. Introduction Collaboration is something which has occurred over all times and is a way for people as well as for organizations to accomplish any goal or wanted result. Min and Zhou (2002) stated that in today’s global marketplace, individual firms no longer compete as independent entities with unique brand names, but rather as integral part of supply chain links.According to Christopher (1992), a supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer. When looking at the downstream linkages, a supplier delivers his products or services to a buyer. The buyer has a recursive demand, and orders this demand to the supplier every period. The supplier, on his turn, has to deal with production scheduling and/or inventory control every period.However, dealing with those issues can be quite difficult for the supplier, when the demand of the buyer is variable and hard to predict. This problem, or phenomenon, is called the Bullwhip effect. Yu et al. (2001) descr ibed this phenomenon as that the variability of an upstream member’s demand is greater than that of the downstream member, and that the effect therefore largely is caused by the variability of ordering. The supplier’s uncertainty about the upcoming buyer’s demand can lead to inefficient productions and inefficient inventory control, which on their turn will lead to increases of costs or decreased in revenues.According to Chen (2003), information sharing is often suggested to combat the undesirable bullwhip effect. The importance of combating the bullwhip effect was elucidated by Yu et al. (2001), who stated that uncertainties will propagate through the supply chain in the form of amplification of ordering variability, which leads to excess in safety stock, increased logistics costs and inefficient use of resources (Yu et al, 2001). So, in order to reduce the chances for these negative consequences of uncertainties for the supplier, information sharing seems the key solution.According to Mohr and Spekman (1994), information sharing refers to the extent to which critical and proprietary information is communicated to one’s supply chain partner. Yu et al. 4 (2001) stated that while every single member has perfect information about itself, uncertainties arise due to lack of perfect information about other members. This seems logical, since a supplier can’t make the right decisions for his production schedule and his inventory control when he doesn’t know what the demand of the buyer will be. As Yu et al. 2001) stated, the supplier in the supply chain needs to make a forecast of its downstream site’s product demand for its own production planning, inventory control and material requirement planning. But, this forecast seems hard to make when uncertainties, by the lack of information, exist. However, there are some authors who don’t agree with this. Raghunathan (2001) for example stated that suppliers can do mu ch better in the case without information sharing, because the supplier can use its information about the retailer’s order history to greatly sharpen its demand forecast.This leads to a remarkable point, because on first sight it seems that the uncertainties, due to the bullwhip effect, can be solved by information sharing between the supplier and the buyer, but some authors have different thoughts on this point. This literature review will asses both views on the importance of information sharing in the supply chain to get a clear overview of its importance for the bullwhip effect and, by that, on the supplier’s performance. This leads to the following research goal and question:Research Question: What is the effect, according to the literature, of information sharing in a supply chain on the performance of the supplier? Conceptual model The following conceptual model will illustrate the goal of this research: Level of information sharing + Performance of the supplier Research goal: The aim of this literature review is to understand the effect of the level of information sharing in a supply chain on the performance of the supplier, where performance can be measured in terms of reductions in total costs and inventories.This paper investigates whether the performance of the supplier is positively influenced by the level of information sharing or not. 5 The unit of analysis: The unit of analysis in this research is on the level of the supplier. It could be expected that the level of information sharing has a positive effect on combating the bullwhip effect, and by that, on the supplier’s performance in the chain, since information can make the uncertainty about the buyer’s demand disappear. Yu et al. 2001) stated that while every single member has perfect information about itself, uncertainties arise due to lack of perfect information about other members. According to this theory, information sharing seems the key solution for reducin g or eliminating the bullwhip effect. Scientific relevance: The scientific relevance of this literature review lies within the contribution it brings to the field of research of the importance of downstream information for the supplier within a supply chain, in order to reduce or avoid the bullwhip effect. It gives insight in the importance of information sharing.Since many authors claim that information sharing is the key solution to reduce or avoid the bullwhip effect, but some on the other hand do not agree with this, this paper tries to give insight in what is true for this case. Practical relevance: The practical relevance of this literature review is that in our world a lot of companies are active in supply chains, and therefore, by this literature review, a supplier working in a supply chain is able to get insight in the importance of information sharing for their performance in that supply chain. 6 2. Theoretical framework 2. Performance of a supplier For the purpose of this research, only the supplier’s performance is being overviewed, and the buyer’s performance is disregarded. The reason for this is that the supplier and the buyer have different interests in the supply chain. The buyer only tries to get the best, in other words, lowest price, but the supplier on his turn also seeks to achieve good selling prices, reductions in total costs and inventories, and by that, increase his revenues. Because of these different targets, it is too complex to focus on both sides’ performance in this research.According to Slack et al. (2004), performance should always be measured against benchmarks, which could be historical standards, target performance standards, competitor performance standards, or absolute performance standards. In addition to that, Clifford (2000) stated that performance often is measured using quantitative measurements, in terms of the gains or benefits a company achieves in comparison to the costs invested. For this re search, the benchmark ‘absolute performance standards’ of Slack et al. 2004) will be used, since this benchmark takes performance on theoretical limits. This is what will be done in this paper as well. The performance of a supplier will be measured using theoretical quantitative measurements, in other words, at stated by Yu et al. (2001), by the extent to which a supplier achieves its specific objectives and benefits in terms of reductions in total costs and inventories. Since this is a literature review, no exact numbers will be used, but, as stated here above, theoretical quantitative measurements will be used. 2. Information sharing As stated before, the performance of the supplier is influenced by the level of information sharing. The reason for sharing information in the supply chain was stated by Yu et al. (2001), who stated that a supply chain partnership is a relationship formed between two independent members in supply channels through increased levels of infor mation sharing to achieve specific objectives and benefits in terms of reductions in total costs and inventories. Various authors described the concept of information sharing in supply chains.According to Mohr and Spekman (1994), information sharing refers to the extent to which critical and proprietary information is communicated to one’s supply chain partner. Lalonde (1998) reviewed five building blocks that characterize a solid supply chain relationship and considered sharing of 7 information as one of them. The other four are sharing of benefits and burdens, multiple contacts between economic entities, cross-functional management processes, and futureoriented collaborative processes (Lalonde (1998)). According to Yu et al. 2001), while every single member has perfect information about itself, uncertainties arise due to lack of perfect information about other members. In their paper they argued that the supply chain member should obtain more information about other members in order to reduce uncertainties. Li and Lin (2006) stated that in a highly uncertain environment with changing markets, organizations tend to build strategic partnership with their supply chain members to share information, increase organizational flexibility, and reduce the risk associated with the uncertainty.One of these risks could be the presence of the bullwhip effect. In their paper, Li and Lin (2006) concluded that generally, organizations with high levels of information sharing and information quality are associated with low level of environmental uncertainty. Furthermore, Li and Lin (2006) argued that, by taking the data available and sharing it with other parties within the supply chain, an organization can speed up the information flow in the supply chain, improve the efficiency and effectiveness of the supply chain, and respond to customer changing needs quicker. More precisely, according to Lehoux et al. 2010), if actors have access to the demand of the final consume r, the number of products kept in stock at each location, the quantity ordered in the past few years, etc. , and are ready to cooperate, they can make planning decision that will have a positive impact on the system. Sahin and Robinson (2002) stated that information sharing can occur at several levels. Under ‘no information sharing’, the only demand data the supplier receives are actual orders from his immediate customer. On the other hand, at the ‘full information sharing’ level, complete information is available to support the specific decision-making environment.According to Sahin and Robinson (2002), this complete information include one or more of the following: production status and costs, transportation availability and quantity discounts, inventory costs, inventory levels, various capacities, demand data from all channel members, and all planned promotional strategies. Lin et al. (2002) argued that the higher level of information sharing is associat ed with the lower total cost, the higher order fulfillment rate and the shorter order 8 cycle time. Seidmann and Sundarajan (1997) summed up a number of possible different information sharing arrangements.They showed four categories, based on the level of impact the shared information has on the buyer and supplier. The categories are as followed: exchanging order information, sharing operational information, sharing strategic marketing information, and sharing strategic and competitive marketing and sales information. In a supply chain, two different streams of information can occur: downstream and upstream. According to Claro and Claro (2010), downstream information refers to the information obtained from a supplier’s marketing channels, be they wholesalers, distributors or retailers.The wholesalers, distributors, or retailers can all be seen as a buyer in the context of this research, since they all place orders at an upstream member (a supplier). From this it can be derive d that upstream information refers to the information a buyer obtains from the supplier. For the purpose of this research, the focus will be on downstream information; the information a supplier receives from the buyer. This information is critical for the supplier’s performance because with this information the buyer will have to make its forecast for production and/or inventory control.The upstream information will be disregarded, since, as stated before, this research only focuses on the supplier, and therefore the buyer’s performance will be disregarded. 2. 3 Bullwhip effect Forrester (1958) was the first one to describe the bullwhip effect and identified the supply chain’s natural tendency to amplify, delay, and oscillate demand information, and demonstrates its effect in a serial supply chain consisting of a retailer, distributor, warehouse, and factory. So, this phenomenon is known as the bullwhip effect.According to Metters (1997), it is so called becaus e a small variance or seasonality in actual consumer demand can ‘crack the whip’ for upstream suppliers, causing upstream suppliers to alternately produce at capacity then experience downtime. Yu et al. (2001) described this phenomenon as that the variability of an upstream member’s demand is greater than that of the downstream member. Basically, they say, the bullwhip effect is largely caused by the variability of ordering. Lee et al. (1997) identified the five major causes of the bullwhip effect as (1) the use of ‘demand signal processing', (2) nonzero 9 ead times, (3) order batching, (4) supply shortages, and (5) price fluctuations. According to Sucky (2008), the bullwhip effect has a number of negative effects in real supply chains, which can cause significant inefficiencies. Huang et al. (2007) stated that the devastating consequences caused by the bullwhip effect are clear indeed, like a redundant inventory, excessive production and resultant costs, i neffective transportation and laggardly logistics, inefficient operations, and low economic benefits of supply chain system.Sucky (2008) agreed with this and stated that the bullwhip effect typically leads to excessive inventory investments throughout the supply chain as the parties involved need to protect themselves against demand variations. So, for the supplier, this means that the uncertainty about demand can lead to more costs, derived from those excessive inventory investments, since suppliers have to forecast their production and/or inventory control, without knowing for sure if this forecast is correct. According to Lee et al. 1997), to reduce uncertainties, and by that the costly bullwhip effect, suppliers and buyers should share demand forecast information as well as information on inventory levels, sales data, order status, and production schedules. The bullwhip effect was illustrated by Sterman (1989) by the ‘beer game’. This game is a role-playing simulati on of an industrial production and distribution system. The game is designed in a way that each participant has a lack of information and they cannot communicate with each other. Therefore, according to Lee et al. 1997), each player has to make his decisions relying on orders from the neighboring player as the sole source of communications. The results of this test confirmed the existence of the bullwhip effect, because they revealed that the variances of orders amplify as one moves up in the supply chain (Lee et al. , 1997). 10 3. Methodology The design of this research was an integrative literature review. No empirical data has been gathered, only existing scientific literature was used in order to do this research. Therefore, this research was pure theoretical.The level of information sharing was used as the independent variable and the supplier’s performance, which is based on the bullwhip effect, was used as the dependent variable. 3. 1 Data collection Since this researc h is a literature review, only scientific academic literature was used. Therefore, the reliability of this research was guaranteed. The literature was found by using ISI (Web of Sciences) and Google Scholar. Web of Sciences was used as primary database, and Google Scholar was used when Web of Sciences could not provide the articles it showed in the search results.If this was the case, mostly the articles were indeed found by Google Scholar. When searching literature on Web of Sciences, the citation database was only using the Social Sciences Citation Index (SSCI). Literature was partly searched and selected by some applicable search terms in ‘Web of Sciences’. Table 1 shows the most important search terms which were used. Those terms were used solely as well as in a combination together in order to find relevant articles. The search results were sorted by the times the articles were cited, in order to find the most important paper for my topic.The only problem which cam e up when using this strategy was that the newest articles, which could be important for this research, were very low in those search results, since they haven’t been cited that much yet. Therefore, after finishing this first sorting strategy, a second sorting was done as well, based on newest to oldest, to see if the last couple of years important papers regarding my topic have been written. The other part of data collection was done by looking at articles which were cited by the papers I viewed as important for my research.Search terms Supply chain Information sharing Supplier Supplier’s performance Table 1. Search terms 11 Bullwhip effect Downstream information Inventory control Demand process 3. 2 Quality indicators The reliability of this research was guaranteed, since only scientific academic literature was be used. All the literature that was used in this paper is high quality literature, because the used literature is published in well-known journals, and is pe er-reviewed.The confirmability is high for this research. The results will be able to be confirmed by others, since all statements, definitions and assumptions in this research were derived from previous literature. In this literature review, there has been consistent and correct referring to the authors. Next to that, the validity was also ensured, since more than just one database was used, so that all the relevant literature for this research was assured. The construct validity is enhanced as well.What had to be measured has actually been measured, since the concepts of this research were clearly defined and the used articles for doing this research were all using the same definitions and concepts. 12 4. Results Two different views on the importance of information sharing in order to reduce or avoid the bullwhip effect can be distinguished in the literature: a positive effect on one side, and on the other hand there are authors who do not agree that information sharing is the key solution to reduce or avoid the bullwhip effect. . 1 ‘Information sharing is the key solution’ The importance of information sharing for combating the bullwhip effect was clearly shown by the simulation study of Chatfield et al. (2004), who used a simulation model to examine the effects in supply chains of stochastic lead times and of information sharing and quality of that information in a periodic order-up-to level inventory system. One of their main findings was that information sharing reduces total variance amplification and stage (node to node) variance amplification.This, is what is needed to reduce or avoid the bullwhip effect. Chatfield et al. (2004) therefore indeed conclude that information sharing decelerates the bullwhip effect as we go up the supply chain, which could be the result of planning ahead, since the upper supply chain echelons would be responding to customer demand information before the demands actually show up in the form of an order from the downstream partner. The findings of Moyaux et al. (2007), also by a simulation study, are in line with this.They concluded that, with information centralization (buyer’s demand information available), the supplier knows in real time and instantaneously the market consumption. By this, the supplier will be able to manage his production schedule and inventory control in the best way. Sterman’s (1989) results from his ‘beer game’-experiment are in line with this, since they showed that the bullwhip effect appears when actors in a chain haven’t got all the information they need to make the right decisions about production and inventory control.Sterman (1989) stated that misconceptions about inventory and demand information (Lee et al. , 1997) causes the bullwhip effect. So, Sterman (1989) also states that the effect of information sharing on the supplier’s performance is positive since it helps to reduce or avoid the bullwhip effect. Croson and Donohue (2005) do not doubt about whether or not information sharing is the key solution; they see particularly sharing information on inventory levels as countermeasure to the bullwhip effect. According to them, from an operational perspective, inventory 13 nformation can be used to update demand forecasts and lessen the impact of demandsignaling errors and delays. In their paper, they stated that ‘analytical research on inventory management in two-echelon supply chains with a single supplier and one or more retailers (e. g. , Bourland et al. 1996; Lee et al. 1997; Cachon and Fisher 2000; Gavirneni et al. 1999) concludes that sharing inventory information can improve supply chain performance, with the upstream member (i. e. , the supplier) enjoying most of the benefits’ (Croson and Donohue (2005)).According to Croson and Donohue (2005), in these analytical models, inventory information provides the supplier with more timely and less distorted demand signals, and these signals are then factored into the supplier’s order decisions, and these factors result in lower safety stock and/or higher service levels in comparison with cases where no inventory information is shared. Lee et al. (1997) totally agreed with those findings. In their paper, as stated earlier, they analyzed four sources of the bullwhip effect (demand signal processing, rationing game, order batching, and price variations).With their demand model, they considered a retailer's singleitem multiperiod inventory problem, where the retailer (buyer) orders a single item from a supplier every period. In this setting, the supplier relies totally on the order data from the buyer. According to Lee et al. (1997), their result shows that such an arrangement will cause the supplier to lose track of the true demand pattern at the retail end, and, besides that, the supplier's inventory control based on this distorted information will inevitably suffer. Lee et al. 1997) concluded, based on th ese findings, that when sales and inventory data are shared among chain members, the supply chain as a whole can implement echelon-based inventory control which can yield superior performance to installation-based inventory control. Moreover, Huang et al. (2007), based on three simulation experiments according to the empirical practice of the three most representative Chinese companies in the steel industry, found that the bullwhip effect existed in this supply chain, and that the effect can be reduced by a control method they developed.Based on classical control theories and methods, combined with the empirical practices, Huang et al. (2007) concluded that the best way for firms to dampen and control the bullwhip effect is to take effective measures for information sharing, especially in this information society. More specifically, Huang et al. (2007) stated that managers should choose an appropriate method of controlling the bullwhip effect, which 14 as to be the usage of some adv anced information management system and management solutions, for example Advanced Planning System (APS), Enterprise Resource Planning (ERP), E-business, Vendor Managed Inventory (VMI), short-term inventory, and distribution optimization, is an effective way to control the bullwhip effect. Since those management systems are advanced information management systems, they are all based on shared information in the supply chain. The conclusions of Huang et al. (2007) therefore indicated the importance of information sharing to reduce or avoid the bullwhip effect.Ozer and Wei (2004) also showed how important the effect of information sharing can be for the supplier. According to Ozer and Wei (2004), both the cost and the base stock level decrease as customers place more of their demand in advance. Advance demand information, according to Ozer and Wei (2004), refers to the situation when customers place orders in advance for a future delivery. If this is the case, the supplier knows what the order will be for the upcoming period, and therefore, the uncertainty seems low or even eliminated.As a consequence of that, it is clear that the cost and base stock level decrease. However, Ozer and Wei (2004) even go further on this important role of information. Based on a numerical study, where they studied 350 problem instances, they stated that advance demand information can be a substitute for capacity and inventory. In other words, when a supplier receives full demand information from the buyer’s side, the supplier doesn’t even have to hold any stock, and by that, the supplier’s performance is influenced positively, since the supplier doesn’t have the risk of extra costs and inventories.One other way to show the value of information sharing in a supply chain was brought up by Cannella and Ciancimino (2011). Cannella and Ciancimino (2011) performed a supply chain stress test via a sudden and intense change in demand, and they distinguished diff erent supply chain configurations: traditional and information exchange. In the traditional supply chain, each level in the supply chain issues production orders and replenishes stock without considering the situation at either up- or downstream tiers of the supply chain (Cannella and Ciancimino (2011)).On the other hand, in the information exchange supply chain, the retailer and supplier order independently, yet exchange demand information and action plans in order to align their forecasts for capacity and long-term planning (Cannella and Ciancimino (2011)). Their main conclusion regarding the difference in these configurations is that the 15 bullwhip effect, inventory instability and intermittent orders are not completely eliminated, but are reduced with respect to the traditional supply chain, and that information exchange supply chains generally outperform the traditional configuration.This means that, ceteris paribus, all performance measures are superior to the traditional cas e (Cannella and Ciancimino (2011)). This conclusion is an important one for the research question of this paper, since it makes clear that the supplier’s performance is really dependent on whether information is shared or not. One other remarkable thing in their conclusion is that the bullwhip effect is not totally eliminated when information is shared in the supply chain. Dejonckheere et al. 2004) concluded this as well in their paper, when they showed that for the class of order-up-to policies, information sharing helps to reduce the bullwhip effect significantly, especially at higher levels in the chain, however, the bullwhip problem is not completely eliminated and it still increases as one moves up the chain. A new question one can come up with here is if it is possible to totally eliminate the bullwhip effect by information sharing. An answer to this new question is given by Chen et al. (2000).In their research, they provided a model based on the assumption that demand information is centralized, and all stages use the same inventory policy and forecasting technique. Centralized demand information means that customer demand information is available to every stage of the supply chain (Chen et al. , 2000). The findings of Chen et al. (2000) showed that providing each stage of the supply chain with complete access to customer demand information can significantly reduce bullwhip effect. However, according to Chen et al. 2000), the results also demonstrated that even when (i) all demand information is centralized, (ii) every stage of the supply chain uses the same forecasting technique, and (iii) every stage uses the same inventory policy, there will still be an small increase in variability at every stage of the supply chain. Reason for this, given by Chen et al. (2000), is that the supplier can never know the mean and the variance of buyer’s demand. This means that the bullwhip effect can never totally be eliminated from the supply chain, even if full information sharing is done by the buyer.Croson and Donohue (2006), who conducted the beer game-experiment of Sterman (1989), also concluded that the bullwhip cannot totally be eliminated. Croson and Donohue (2006) conducted the game under business students at the University of Minnesota and found that the bullwhip effect still exists when retail demand is stationary (not fluctuating) and commonly known. Reason for this was 16 given by Sterman (1989) itself, who noted that dynamic settings render decision making difficult, even when only one decision maker is involved, due to reduced saliency of feedback.For the purpose of this study this means that a supplier is missing the feedback or forewarning of when the buyer is running short on inventory. Therefore, uncertainty still exist since the forecast is hard to make, and the bullwhip effect will not be eliminated. However, Yu et al. (2001) stated that this is possible. Based on their case study of L&TT, a Hong Kong based mul tinational company which had to deal with a large number of new manufacturers and component suppliers in their industry, Yu et al. (2001) concluded that with access to the customer rdering information, the supplier can eliminate the amplified buyer’s demand variance in its replenishment process. Besides that, Yu et al. (2001), according to their quantitative analysis, stated that the supply chain partnership can not only help the members of a decentralized supply chain to eliminate the bullwhip effect, but also improve the overall performance of the supply chain. So, based on the findings of Yu et al. (2001), the overall performance of the supply chain can be improved. This means that the supplier and buyer should make information sharing arrangements, since it can be advantageous for them both.Seidmann and Sundarajan (1997) summed up possible different information sharing arrangements, showing the impact of information sharing on the operations, sales, marketing, and product ion strategies of the parties that contract to share the information. The four arrangements they summed up are exchanging order information, sharing operations information, sharing strategic marketing information, and an agreement where the information adds both strategic and competitive value to the party that receives it. The sharing strategic marketing information agreement seems the optimal agreement for the research question in this paper.According to Seidmann and Sundarajan (1997), arrangements like these occur when one organization owns information that it can derive little independent value from, but which another can use to generate operational benefits for the company it receives the information from, besides garnering strategic value for its own sales and marketing departments. This level can be very beneficial for the supplier. As Seidmann and Sundarajan (1997) stated, the information in this level can be used by the supplier’s sales and product development groups for improved demand forecasting, promotion scheduling, and segment-specific forecasts and therefore, in 17 hat situation, it is possible for a buyer to allow a supplier to access broad market information that provides the supplier with strategic and competitive benefits. A new point of discussion can come up here, because, according to Lee et al. (1997), sales data and inventory status data are proprietary for buyers, and they are not obligated to share this data with others, in this case, the supplier. Lee et al. (1997) in their paper do not state that sharing information can be advantageous for the buyer as well as the supplier as Yu et al. (2001) do, but they take in mind why the buyer would exchange information to the supplier.According to Li (2002), in line with this, buyers would not voluntarily share their information. He identified conditions under which the manufacturer would be able to buy retailer information. Claro and Claro (2010) concluded as well that sharing informa tion can be good for both sides in the supply chain. They found their results by doing a survey research under 174 suppliers and 67 buyers, with which they tested their hypothesis, which was: ‘the more downstream information a supplier obtains, the higher the degree of collaboration in a buyer-supplier relationship’ (Claro and Claro, 2010).The results supported the hypothesis. Claro and Claro (2010) showed that when downstream information is shared, so, from buyer to supplier, the degree of collaboration, in terms of joint planning, joint problem solving and flexibility in the supply chain is very high. These findings show that sharing the proprietary information can bring advantages for the buyer as well. An interesting point in the studies who showed that information sharing is the key solution for reducing or avoiding the bullwhip effect was brought up by Croson and Donohue (2006).As stated before, they conducted the beer game under business students, but for the pur pose of the study of this interesting finding the participants also had access to dynamic inventory information. According to Croson and Donohue (2006), the results suggest that members near the beginning of the chain exhibit a different impact from inventory information than those near the end. This means that having access to dynamic information will lead to a greater reduction of the bullwhip effect for suppliers like a manufacturer and a distributor, than for suppliers who are closer to the end consumer, like a distributor.So, from their findings, information sharing is very important for reducing or avoiding the bullwhip effect, but much more important for suppliers who are at the beginning of the chain than for suppliers who are closer to the end buyer. 18 ‘Information sharing is the key solution’ Chatfield et al. (2004) simulation model to examine different effects in a supply chain ? periodic order-up-to level inventory system Moyaux et al. (2007) ? simulation s tudy ? Findings: Information sharing reduces total variance amplification and stage (node to node) variance amplification.Sterman (1989) ? Beer-game experiment ? This experiment is used and conducted a lot in the literature Croson and Donohue (2005) ? Analytical research on inventory management in two-echelon supply chains with a single supplier and one or more retailers Lee et al. (1997) ? Analyzed four sources of the bullwhip effect ? With their demand model, they considered a retailer's single-item multiperiod inventory problem Huang et al. (2007) ? Three simulation experiments in the Chinese steel industry ?Based on classical control theories and methods, combined with the empirical practices Ozer and Wei (2004) ? Numerical study with 350 instances Findings: With information centralization, the supplier knows in real time and instantaneously the market consumption Findings: The bullwhip effect appears when actors in a chain haven’t got all the information they need to mak e the right decisions about production and inventory control Findings: Sharing inventory information can improve supply chain performance, with the upstream member (i. e. the supplier) enjoying most of the benefits Findings: When sales and inventory data are shared among chain members, the supply chain as a whole can implement echelon-based inventory control which can yield superior performance Findings: The best way for firms to dampen and control the bullwhip effect is to take effective measures for information sharing, especially in this information society. Managers should choose an appropriate method of controlling the bullwhip effect Findings: Both the cost and the base stock level decrease as customers place more of their emand in advance. Advance demand information can be a substitute for capacity and inventory Findings: The bullwhip effect, inventory instability and intermittent orders are not completely eliminated, but are reduced with respect to the traditional supply cha in, and that information exchange Cannella and Ciancimino (2011) ? Supply chain stress test via a sudden and intense change in demand 19 supply chains generally outperform the traditional configuration. Dejonckheere et al. (2004) ? The class of order-up-to policies Findings: ?Information sharing helps to reduce the bullwhip effect significantly, especially at higher levels in the chain ? Hhowever, the bullwhip problem is not completely eliminated and it still increases as one moves up the chain Chen et al. (2000) Findings: ? A model based on the assumption that ? Providing each stage of the supply chain demand information is centralized, with complete access to customer demand and all stages use the same inventory information can significantly reduce policy and forecasting technique bullwhip effect ?The supplier can never know the mean and the variance of buyer’s demand, so the bullwhip effect is never completely eliminated Yu et al. (2001) Findings: ? Case study of L ? With access to the customer ordering ? Quantitative analysis information, the supplier can eliminate the amplified buyer’s demand variance in its replenishment process ? The supply chain partnership can not only help the members of a decentralized supply chain to eliminate the bullwhip effect, but also improve the overall performance of the supply chain Claro and Claro (2010) Findings: ?Survey research under 174 suppliers ? When downstream information is shared, and 67 buyers so, from buyer to supplier, the degree of collaboration, in terms of joint planning, joint problem solving and flexibility in the supply chain is very high. Croson and Donohue (2006) Findings: ? Sterman’s (1989) beer-game under ? Members near the beginning of the chain business students exhibit a different impact from inventory information than those near the end ? Having access to dynamic information ill lead to a greater reduction of the bullwhip effect for suppliers at the beginning of the chain, th an for suppliers who are closer to the end consumer 20 4. 2 ‘Information sharing is not the key solution’ Eventhough a lot of authors, as shown here above, state that information sharing is the key solution for reducing or avoiding the bullwhip effect and by that improving the supplier’s performance, there are also authors who do not agree with this. For example Raghunathan (2001), based on analysis of the earlier study of Lee et al. (2000) and through simulation. Lee et al. 2000), studied the value of sharing demand information in a supply chain model with a nonstationary demand process. Their key findings are that the suppliers costs can be reduced as a result of information sharing. Raghunathan does not agree with this. According to Raghunathan (2001), a supplier can reduce the variance of its forecast further by using the entire order history to which it has access. Thus, Raghunathan (2001) stated, when intelligent use of already available internal informatio n (order history) suffices, there is no need to invest in interorganizational systems for information sharing.Next to Raghunathan are Cachon and Fisher (2000), who studied the value of sharing data in a model with one supplier, N identical retailers, and stationary stochastic consumer demand. They concluded that, for the setting they studied, implementing information technology to accelerate and smooth the physical flow of goods through a supply chain is significantly more valuable than using information technology to expand the flow of information. The reason they give is that when a retailer is flush with inventory, its demand information provides little value to the supplier because the retailer has no short-term need for an additional batch.According to Cachon and Fisher (2000), a retailer’s demand information is most valuable when the retailer’s inventory approaches a level that should trigger the supplier to order additional inventory, but this is also precisely when the retailer is likely to submit an order. Graves (1999) goes beyond this and gives an even lower value to information sharing in a specific, namely, zero. Graves (1999) developed a model assuming assume that each site in the system orders at preset times according to an order-up-to policy, that delivery times are deterministic, and that the demand processes are stochastic with independent increments.Graves (1999) concludes that information sharing provides no benefits to the supply chain, when there is no outside inventory source and an order-up-to-policy. 21 Gavirneni et al. (1999) furthermore studied different patterns of information flow between a retailer and a supplier. With their study they found that information sharing is does not always have a big value, in other words, is not always the key solution for reducing or avoiding the bullwhip effect.The objective in their paper is to determine a production strategy to minimize the supplier’s costs, under various sce narios that differ in terms of the supplier’s information about the downstream part of the supply chain. Their key observations, according to Chen (2003), are: (1) when the retailer demand variance is high, or the value of (s, S) is either very high or very low, information tends to have low values, and (2) if the retailer demand variance is moderate, and the value of (s, S) is not extreme, information can be very beneficial.A (s, S)-policy, according to Yu et al. (2001) means that an order will be placed to replenish the stock level to S at each time period if the stock level is less than the recorder point s. So, according to Gavirneni et al. (1999), in some situations information sharing is overestimated and is definitely not the key solution for reducing or avoiding the bullwhip effect. Dejonckheere et al. (2003) found some other solution for reducing the bullwhip effect and neither did say that information sharing is the key solution.Based on a methodology by control sys tems engineering, which includes transfer functions, frequency response curves and spectral analysis, they introduced a general decision rule that avoids variance amplification (bullwhip effect) and succeeds in generating smooth ordering patterns, even when demand has to be forecasted. Firstly, Dejonckheere et al. (2003) concluded that whatever forecasting method is used, order-up-to policies will always result in a bullwhip effect. Therefore, they tried to find a solution to reduce or avoid this effect. According to Dejonckheere et al. 2003), the crucial difference with the class of order-up-to policies is that in their proposed rule, net stock and on order inventory discrepancies are only fractionally taken into account. Their general decision rule has to expected benefits: (1) it is expected to detect and eject rogue variations in demand (high frequencies) so that excess costs due to unnecessary ramping up and down production or ordering levels are avoided, and (2) it is possible to quantify the amount of variability reduction by means of the same procedure (Dejonckheere et al. (2003)). 22 ‘Information sharing is not the key solution’ Raghunathan (2001) Findings: ?Analysis of the earlier study of Lee et ? A supplier can reduce the variance of al. (2000) and through simulation its forecast further by using the entire order history to which it has access Cachon and Fisher (2000) Findings: ? Based on a model with one supplier, ? Implementing information technology N identical retailers, and stationary to accelerate and smooth the physical stochastic consumer demand flow of goods through a supply chain is significantly more valuable than using information technology to expand the flow of information Graves (1999) Findings: ?Based on a model assuming that each ? Information sharing provides no site in the system orders at preset benefits to the supply chain, when times according to an order-up-to there is no outside inventory source policy, that del ivery times are and an order-up-to-policy. deterministic, and that the demand processes are stochastic with independent increments Gavirneni et al. (1999) Findings: ? Studied different patterns of ?When the retailer demand variance is information flow between a retailer high, or the value of (s, S) is either and a supplier. very high or very low, information tends to have low values Dejonckheere et al. (2003) Findings: ? Based on control systems engineering ? Introduced a general decision rule ? Whatever forecasting method is used, order-up-to policies will always result in a bullwhip effect ? Their general decision rule: (1) is expected to detect and eject rogue variations in emand (high frequencies), and (2) it is possible to quantify the amount of variability reduction by means of the same procedure 23 5. Conclusion and recommendations 5. 1 Conclusion The answer to the research question as stated in the beginning of this paper is provided in this section. The research question wh ere this research is based on was: ‘What is the effect, according to the literature, of information sharing in a supply chain on the performance of the supplier? To answer the research question, and to see if information sharing for the bullwhip effect is over- or underestimated, the literature around the topic of the bullwhip effect had to be assorted, and it showed that in two main streams exist in the literature when focusing on the role of information sharing for the bullwhip effect. In the literature, with exceptions (Raghunathan 2001: Cachon and Fisher 2000: Graves 1999: Gavirneni et al. 1999: Dejonckheere et al. 2003), information sharing as the key solution to reduce or avoid the bullwhip effect seems to have the upper hand.First, shortly the most important findings from the first view will be summarized, which was the view of information sharing as key solution to reduce or avoid the bullwhip effect in order to increase the performance of a supplier. Chatfield et al. (2004) and Moyaux et al. (2007) showed by simulation studies that with information sharing in the supply chain, the supplier is much more well-known about what is going happen, in other words, what the market does and what the buyer’s demand will be, and therefore, according to their findings, the bullwhip effect is reduced.Also results of some empirical studies showed that information sharing is the key solution. Huang et al. (2007) concluded that managers should stick to advanced information management systems for their company because this will reduce the bullwhip effect. Ozer and Wei (2004), with their numerical study, found that advance demand information will results in decreases of costs and inventory level, and therefore has a positive effect on the supplier’s performance. Yu et al. 2001), with their case study of L, concluded that when a supplier has access to the buyer’s ordering information, the supplier can eliminate the amplified buyer’s dema nd variance in its replenishment process. Claro and Claro (2010), by their survey research, even showed that not only the supplier can benefit from sharing information but the buyer can do as well, because when downstream information is shared, the degree of collaboration, in terms of joint planning, joint problem solving and flexibility in the supply chain is very high. 24The main findings of the other view, the view which finds that information sharing is not the key solution, were as followed. Raghunathan (2001) stated that information sharing is not necessarily needed, because a supplier can reduce the variance of its forecast further by using the entire order history to which it has access. Furthermore, Cachon and Fisher (2000) concluded that accelerating and smoothing the physical flow of goods through a supply chain is significantly more valuable than using information technology to expand the flow of information.Graves (1999) found that, in a specific market model, informati on sharing provides no benefits to the supply chain, when there is no outside inventory source and an order-up-to-policy. Dejonckheere et al. (2003) had a remarkable result. They introduced a general decision rule, which should detect the bullwhip effect and quantify the amount of the bullwhip effect, so that suppliers can respond to this in time. The arguments for information sharing as key solution seem stronger than the ones who say information sharing is not that important.The argument of Raghunathan (2001) for example, that a supplier can reduce the variance of its forecast further by using the entire order history to which it has access, seems not very strong. The findings of Raghunathan in fact were rejected by Croson and Donohue (2006) who conducted the beer game of Sterman (1989) under business students and found that the bullwhip effect still exists when retail demand is stationary (not fluctuating) and commonly known.This means that, even if a supplier has the order histo ry, the demand is known, and the demand is not really fluctuating, a supplier cannot make the right forecast since the bullwhip effect isn’t totally eliminated. The argument of Raghunathan (2001) can call up more discussion. Results from the past do not guarantee anything for the future, and especially these days with the economic crises, you never know what the market with do and how the financial situation of your customers will be.Therefore, making forecasts based on history seems not a strong argument. Other arguments saying that information sharing is overestimated all focus on specific situations, but it seems that overall information sharing is not overestimated at all in the literature. Much more authors, based on different (simulations) models and empirical studies, claim that information sharing is the key solution to reduce or avoid the bullwhip effect than authors who do not claim that, and this seems logical. Without enough information, a supplier 25 annot make r ight judgments about his production schemes and inventory control, since he doesn't know what the next period will bring for him in terms of the buyer’s demand. The results of this uncertainty for the supplier can be either a low inventory and the chance of not being able to fulfill the buyer’s demand because of that inventory, or the chance of having an inventory which is too large and being stuck with too many unsold products after the buyer’s demand. To avoid this effect, the supplier should have access to the necessary information from the buyer.However, as also stated by Li (2002), why would a buyer share this information, when it is not in any way beneficial for him? The information sharing arrangements of Seidmann and Sundarajan (1997) can bring the solution. Their third level, sharing strategic marketing information, is the one which suits the best in this case. The supplier and buyer should make this arrangement, so that the buyer shares the needed down stream information to the supplier. This information shared has strategic value to the supplier.The buyer, on his turn, could, in return for the information, ensure himself for example of better purchase prices. In this way, both parties can gain from the agreement. Claro and Claro (2010) came up with more descriptions of how the performance of the buyer could positively be influenced as well next to the performance of the supplier, by stating that joint planning, joint problem solving and flexibility in the supply chain are all possible consequences of a situation where information is being shared from buyer to supplier. 5. Recommendations for future research For further research it will be very interesting to investigate to what extent the performance of the buyer and supplier can be negatively influenced as well by information sharing within the supply chain. In the literature, as I have seen, a lot is written about the importance of information sharing, and the overall conclusio n is that information sharing is the key solution to reduce or avoid the bullwhip effect, and, by that, positively influences the performance of the supplier and also the whole chain’s performance.However, there hasn’t been done much research about possible negative consequences of information sharing within the chain and therefore this seems a gap in the existing literature. For example, what could happen when information is fully shared between suppliers and buyers, is that the suppliers get totally dependent on those information by controlling their production and/or inventory, and when the information for any reason suddenly is distorted, misinterpreted or wrong, a problem can occur. 26 6. Discussion and reflection 6. Discussion As it is clear from the results section and conclusion, two views on the importance of information sharing for the supplier’s performance exist in the literature. The conclusion shows that it can be stated that information sharing is the key solution to reduce or avoid the bullwhip effect, and, by that, has a positive influence on the performance of the supplier. The practical implication of this research lies within the insight it gives to actors in a supply chain. The insight is especially meant for suppliers, since this research focused on the supplier and not specifically on the buyer.The bullwhip effect seems a very common problem in supply chains and therefore it seems to be a topic which suppliers will often will encounter. This research gives insight in how the bullwhip effect can be reduced or avoided. As concluded, the first solution on sight seems easy. Suppliers should try to make the buyer share the needed downstream information, so that the supplier can make right forecasts, and wellover thought production and/or inventory control. However, one cannot ignore for example the general decision rule of Dejonckheere et al. (2003).They believe that their model can detect and quantify the bullwhip effect in time, so this might be a solution as well for reducing or avoiding the effect. However, no sequel study on their paper has been done and so, there hasn’t been any further prove of this model. The setting of this paper gives reason for discussion. In this paper, the focus has only been on the performance of a supplier and did not specifically focus on the buyer’s performance. This research even ignored more or less the buyer’s performance. Therefore, discussion can come up, since the supply chain has two sides: a buyer and a supplier.As said, this research only looked through the eyes of the supplier, in other words, how the supplier could reduce or avoid the bullwhip effect, by that make better forecasts and decisions about production and/or inventory control, and so improve his performance. The overall conclusion is that information sharing is the key solution. However, this is only in the interest for the supplier, while the other important player in this story, namely, the buyer, hasn’t been spotlighted in this story. In this paper it is assumed and concluded that a buyers should share his information, but the 7 paper did not really put a good focus on the buyer’s performance, and what the possible consequences of information sharing for the buyer could be. Another point of discussion lies within the literature used for this research. The problem is that a lot of authors use models in their paper to conduct, analyze and conclude about whether or not information sharing is important for the bullwhip effect, but those models differ from each other. Some authors use stationary market models, some use non-stationary, some use order-up-to policy models, some use order-point-quantity policies.In other words, authors use specific supply chain settings to make their conclusions, and therefore, this research includes a very broad scope on the topic, which means that conclusions made in this research are not applicable in every supply chain, since the supply chain settings can differ. 6. 2 Reflection When looking back on writing this literature review, findings literature was not the problem. Many articles have written about the topic ‘supply chain’ in relation to ‘bullwhip effect’, but this didn’t mean that it was easy to find the right literature.Because of the large quantity papers, a very specific search method was needed in order to find the really important papers to be able to answer the research question of this paper. One difficult point in doing this research was that many of the most important papers included very detailed and extensive statistical models, which sometimes made it very difficult to understand the papers in the right way and derive right conclusions from it. Besides that, it was important to focus only on the supplier’s performance and leave the buyer’s performance outside the focus of this paper.The reason of that is that the supplie r and buyer, as written before, both have their own values and interests, and therefore, if the paper would focus on both of these actors, more than one dimension will exist and the research will get too extensive. When the research goal and question were clear, soon it became clear as well that two views on the importance of information sharing for the bullwhip effect existed. However, I was hoping to find much more results on the second view, namely that information sharing is not the key solution. This was a disappointing thing in the research. 28 7.References Aviv, Y. (2001). The effect of collaborative forecasting on supply chain performance. Management Science 47(10): 1326–1343. Bourland, K, Powell, S, Pyke, D. (1996). Exploiting timely demand information to reduce inventories. European Journal of Operational Research, 92: 239–253. Cachon, G. , M. Fisher (2000). Supply chain inventory management and the value of shared information. Management Science 46(8): 1032à ¢â‚¬â€œ1048. Cannella, S. , Ciancimino, E. (2011). On the bullwhip avoidance phase: supply chain collaboration and order smoothing. International Journal of Production Research 48 (2): 6739–6776.Chatfield, D. C. , Kim, J. G. , Harrison, T. P. , Hayya, J. C. (2004). The bullwhip effect—impact of stochastic lead time, information quality, and information sharing: a simulation study. Productions and Operations Management 13 (4): 340–353. Chen, F. (1998). Echelon reorder points, installation reorder points, and the value of centralized demand information, Management Science 44 (12, No. 2): 221–S234. Chen, F. 2003. Information sharing and supply chain coordination. In A. G. de Kok, S. C. Graves, eds. Handbooks in Operations Research and Management Science: Supply Chain Management, Chapter 7.North-Holland, Amsterdam, The Netherlands, 341-413. Chen, F. , Drezner, Z. , Ryan, J. K. , Simchi-Levi, D. , (2000). Quantifying the bullwhip effect in a simple supply chai n: the impact of forecasting, lead times and information. Management Science 46 (3): 436–443. Christopher, M. G. (1992). Logistics and Supply Chain Management. Pitman Publishing, London, UK. Clark, A. , H. Scarf (1960). Optimal policies for a multi-echelon inventory problem. Management Science 6: 475–490. Claro, D. P. , & Claro, P. B. O. (2010). Collaborative buyer–supplier relationships and downstream information in marketing channels.Industrial Marketing Management, 39(2): 221–228. Croson, R. and Donohue, K. (2005), â€Å"Upstream versus downstream information and its impact on the bullwhip effect†, System Dynamics Review, Vol. 21 No. 3: 249-60. Croson, R. , K. Donohue. (2006). Behavioral causes of the bullwhip effect and the observed value of inventory information. Management Science. 52(3): 323–336. 29 Dejonckheere, J. , Disney, S. M. , Lambrecht, M. R. , Towill, D. R. , (2003). Measuring and avoiding the bullwhip effect: A control theor etic approach. European Journal of Operational Research 147 (3): 567–590. Dejonckheere, J. Disney, S. , and et al. (2004). The impact of information enrichme

Dear Mrs. Ghosson Essay Example | Topics and Well Written Essays - 1000 words

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Marketing and Sales of AirAsia Company Case Study

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HR speech and written report - Essay Example The challenge in this case is that if it decides to look for labor offshore, it risks thrashing from the Clothing workers Union (CWU) and the government that has invested a lot of funds into the clothing industry so as to enable the sector offer employment to the local population. According to Czenter (2010), clothing and textile industry is one of the highest employing industries especially for the low skilled labor force in a majority of the countries. Similarly, for OZ as a company that wants to continue being in business must appreciate the role they play in the industry and should, instead of dodging reality, adapt to techniques that will see them make profit while at the same time ensure work tenure for their labor force. The FWA has a core mandate of ensuring the security of workers tenures. In this regard, it will make it its business to indulge in the affairs of OZ clothing so long as they, in any way, try to curtail the working conditions of the workers. OZ clothing faces stiff industrial relations in as far as its case is concerned. With FWA at its neck, it has to work with the labor force it has. It is critical that other strategies other than cutting the services of the labor force must be adopted. It is essential that OZ clothing must become more innovative so that its clothing products meet the competitive threshold in the market so that they can favorably compete with those from other regions like China. Just as (Czenter,2010) notes in her Essay , â€Å"labor market and globalization† that reduction of work force does not mean that customers will cease to demand the same level of output or even the same quality of the product, it thus becomes necessary that OZ restructure to become relevant in the market. This they can do by engaging in value addition strategy. Their clothe lines should appear to have superior to those offered in the market by other players like the

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Logical Fallacies - Essay Example This fallacy illustrates disconnect in the premises and the conclusions. Informal fallacies forms include; inappropriate arguments or generalizations, due to ignorance. Informal fallacies are usually more common and interesting than the formal fallacies (Engle 141). In this paper, I’ll discuss the second logical fallacy illustrated in the assignment instruction. The fallacy is: Tradition is not always right. On Saturday, 23rd August 2014, I had a discussion with a class friend on the roles of tradition in the society. My friend continuously illustrated that tradition is not always rights; in order to influence my opinion on only the negative aspects of tradition. This fallacy illustrates informal fallacy, which is based on argument due to ignorance. My friend did not understand the importance of tradition in our society; but I effectively did my part by explaining the positive and negative issues in tradition. Tradition has greater significance in any society than previously believed. Tradition represents existing knowledge; and it is a collection of related ideas and concepts lasting for long time durations (Shils 42). These ideas are continuously improved in the society through addition of new knowledge. This is referred to as dynamic tradition. On the other hand, static tradition does not change easily over time. The prevalent tradition type in America is the mixed tradition that combines the two traditional approaches. Dynamic tradition is very significant because it illustrates the best knowledge in America. The tradition discovers the best ideas, and then continuously discards knowledge proved to be mistaken. Dynamic tradition is best due to the great levels of criticism, thought, and error correction allowed. If there is a wrong aspect in tradition; then emphasis should be on improving it, and not abandoning the aspect. Tradition should be flexible enough to

CCOT Essay Europe America Africa Essay Example for Free

CCOT Essay Europe America Africa Essay The Renaissance in Western Europe marked the end of the Middle Ages and the start of Europe’s rise as a global power. The various States in Western Europe became more centralized, and monarchs exercised more control over their subjects. Christopher Columbus’s voyage to America and his return truly began the new age of exploration for Europe. This New World discovery greatly altered the lives of Native Americans, forcing them to live with colonists and people they had never been in contact with. Meanwhile, Prince Henry’s expeditions opened up new opportunities for trade in Africa. Through the period of 1492-1750, many things changed but parts of life stayed the same such as the European domination and the presence of trade in Africa. New contacts among Western Europe, Africa, and the Americas, however, led to interaction that has evolved greatly over the span of time. The new contacts and increased trade directly cause the rise in power in the Middle-Class in Europe. Throughout the feudal period, the control of the power and wealth was in the hands of the Nobles. As trade with Africa and the Americas increased, however, a new merchant class rose. As the new class became wealthier, they began to agitate for political power, sparking large battle like the 1789 French Revolution. The social changes in the Americas were unprecedented. The diseases brought over that the Europeans were so used to like measles and smallpox decimated the Native Americans because they had no previous contact with those illnesses. One example of this is when disease infested blankets were gifted to the Aztecs by Hernan Cortez during his quest to conquer them. These tactics were then later used to take down the Incas. Native Americans were suppressed into being slaves and or servants to the Europeans. A similar trend occurred in North America. Unlike the Aztecs or Incas, North American natives were decentralized, and loosely organized by tribes. Columbus’s initial subjugation of the Haitians, forcing them to mine gold, set a precedent for future domination. Africa was greatly affected by the slave trade. Large, constant amounts of labor were needed on the Spanish and Portuguese sugarcane plantations, and Native American populations were often unable or unwilling to work as slaves. Especially after Bartolome de las Casas’s campaign against the enslavement of Native Americans, the Europeans were desperate another source of cheap labor. Because of this, the Atlantic slave trade began, beginning a long and cruel period of time where as many as 12 million slaves for transported from Africa to the Americas. This mass slave trade had both positive and negative effects on African society. Although slavery was cruel and abusive, the money some empires acquired from working with the Europeans enabled them to create stronger relations and improve overall. Despite the massive change taking place, there were various aspects of life that stayed the same. In Western Europe, the large gap between the rich and the poor was still present; even though a stronger and more powerful middle class had developed, the power was still in the hands of an elite tier of people. Literally every West Europe country was controlled by a monarchy, with barely any representation. In Britain for example, only 2% of the population could vote due to restrictions and laws. In the Americas, many tribes were still able to keep their traditional way of life. Usually, tribes unsettled by the British settlers in North America migrated westward, and since the French had yet to take control of the Louisiana Territory, they were free to continue with their traditional methods. Africa was still almost completely free. It wasn’t until the 1880’s that Africa started to become majorly colonized. Though they were less powerful than the Western Europeans, the African nations remained independent and were directly reliant on trade In conclusion; the interaction between Western Europe, Africa, and the Americas resulted in both change and continuity. A major trend that is irreversible was the newfound connection between regions. Columbus joined the New World with Europe, creating a strong relationship that still stands today. Therefore, interaction between 1492 and 1750 set a precedent for future actions.

Supply Chain Management of Mirinda

Supply Chain Management of Mirinda Pepsi was founded in 1898 by Caleb Bradham, a new Bern North Carolina, druggist who first formulated Pepsi-Cola. Today Pepsi has expanded at a large scale and has a portfolio of beverage brands that includes carbonated soft drinks, juices and juiced drinks, Ready-to-drink teas and coffees, isotonic drinks, bottled water and enhanced water. PepsiCo has well known beverages such as Mountain Dew, Diet Pepsi, Tropicana Pure Premium, Aquafina, Tropicana Juice Drinks, Tropicana Twister , MIRINDA and much more. PepsiCola markets Frapoccuino ready-to-drink coffee through a partnership with Starbucks. PEPSI CO PRODUCT: the product we are taking for the project of supply chain management is MIRINDA. RIAZ BOTTLERS: Riaz Bottlers (PVT) Limited (RBL) incorporated in Pakistan as a private limited company in 1976. RBL is the franchise holder of Pepsi Cola International with seven brands. Like PEPSI, PEPSI MAX, 7UP, MIRINDA and MOUNTAIN DEW etc. They have recently launched Aquafina and are in process of moving towards some other products. RBL today is one of the best National Companies in Pakistan. At RBL, they believe that Our existence and success is more than just meeting our business objectives and we are proud of the success that the company has achieved. Together our people provide the skills, knowledge and expertise to deliver the quality of service that our customers expect and upon which our reputation depends. RIAZ BOTTLERS AND SUPPLY CHAIN MANAGEMENT: RBLs primary functions are to demeanor a methodical manufacturing and supply of the product without any tactical and strategic flaws. Backed by a powerful competitive strategy and empowered by some effective supply chain strategies, the group has been managing an effective supply chain through out the region. It has set up a urbane manufacturing and storage plant in Lahore with production units and huge production capacity. RBL has different management departments dealing with specialized Marketing, HR, IT and Supply Chain Processes. In this report we conducted the process of the basic supply chain management functions of RBL for MIRINDA by Pepsi co. COMPREHENSION OF MIRINDA SUPPLY CHAIN: The goal of every supply chain is to maximize the overall value generated. The value of a supply chain generates is the difference between what the final product is worth to the customer and the costs the supply chain incurs in filling the customers request. (Chopra, Meindl 2006) DECISION PHASES IN SUPPLY CHAIN OF MIRINDA SUPPLY CHAIN DESIGN OF MIRINDA: A proper decision regarding how to structure the supply chain over next upcoming years have been made and the short term aswell as the longterm decisions have been made by the company in regards to location and capacities of production and warehousing facilities, the products to be manufactured or stored at various locations, the modes of transportation to be made, information systems and so on. Their supply chain design is very expensive to alter on short notice and supports the companys strategic objectives. In order to ensure a good supply chain strategy, Riaz Bottlers plans one to two years in advance. It has several contracts with manufacturers, and receives raw material on a convenient basis. The company also decides where production plants are to be placed. RBL has production plants at Lahore. The production process is 80% automated. The company has to provide and manage transport for the delivery of products as well as the arrangement of third party services for the procurement of products. The shipping department handles orders and the transport department decides the vehicles for safe delivery. Material planning and sourcing is carried out as well. Sources of supply of raw material both local and foreign are identified and terms and conditions are negotiated. Capacity planning is also done at this stage. Sales forecasting and production planning depends upon the capacity of the organization with respect to: Production. Storage: Raw and packing. Storage: Finished goods. Riaz bottlers Lahore has a procurement budget of nearly Rs 10 billion. Approved suppliers cannot go beyond this budget. The supplier is audited by the most cost efficient quality control department. Distributors are also decided by the company, keeping in mind past performances. The company has  increased its distribution capacity from one to ten filling lines during the last few years lending it  a competitive edge over Coca Cola. SUPPLY CHAIN PLANNING OF MIRINDA: After RBL set the design of their supply chain they do the planning which increases their surplus in supply chain and thats their goal too. The planning launches and make them set their constraints over some span of time according to the demand of Mirinda. Pepsi co carries out sales forecasting for local demand as well as for export purposes to countries such as Afghanistan etc for Mirinda. The annual sales target is conveyed to the supply chain department of RBL. Planning is carried out on a monthly, weekly and daily basis for order planning allocation , warehousing ,production scheduling inventory planning and optimization. at RBL. SUPPLY CHAIN OPERATION OF MIRINDA: In RBL , the production , sales and supply chain departments get united to decide the inventory on weekly basis. There is always less uncertainty about the demand . the operation process includes customer orders in the best possible manner. During this RBL , allocate inventory or production to individual orders, set a date (which is always according to the will of customers and they dont get disappointed) that an order is to be filled, generate a proper pick lists at a warehouse in gulberg , allocate to shipping, set delivery and so on. PROCESS VIEWS OF MIRINDA SUPPLY CHAIN The processes in a supply chain are divided into a series of cycles each performed at the interface between two successive stages of a supply chain. CYCLE VIEW OF SUPPLY CHAIN: Supplier / manufacturers: The suppliers to Pepsi Co are franchise operative (RBL) as well as company operative (LAYS chips) system and are located in eight cities of Pakistan. The cities are Lahore, Islamabad, Karachi, Peshawar, Hyderabad, Sukkhar, Gujranwala and Faisalabad. PepsiCo has its Plant , Factory ,Workshop and Warehouse at the same place in Lahore . the Address is : Guru Mangat Road, Gulberg Lahore Distributors: They are located throughout the country; every city has its distributors. The distribution done on direct and indirect ways that would be discussed in the distribution section of the report. Retailers : retailers outlets are all sort of shopkeepers, malls , hotels etc to whom the distributors provide the stock via transportation i.e. trucks etc which carries distribution from point to point in different allocative routes. Customers: Its customers are all sort of target markets from social class A to C and range within all demographical and pyschographical parameters. PUSH AND PULL VIEW OF MIRINDA SUPPLY CHAIN: The push process implementation is commenced in anticipation to a customer order. MIRINDA has a seasonal demand. Just in time concept is pertinent in non-seasonal period and not pertinent in seasonal period. All processes that are part of the procurement cycle, manufacturing cycle, replenishment cycle, and customer order cycle are push processes. MIRINDA Sales order and processing: The Shipping Manager receives sales order from Sales Team, distributors through telephone, fax email one day before dispatch. The sales are made to base distributors on advance payment against orders then shipping manager plans according to the demand of distributors on daily basis. COMPETITIVE AND SUPPLY CHAIN STRATEGIES: There are three major sustainable advantages that give PepsiCo a competitive edge as they  operate in the global marketplace: Big, muscular brands. Proven ability to innovate and create differentiated products. Powerful go-to-market systems. PepsiCos ( Mirinda) overall mission is to increase the value of shareholders investment. They do this through sales growth, cost controls and wise investment of resources. They believe their commercial success depends upon offering quality and value to their consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to their investors while adhering to the highest standards of integrity. A customer while purchasing a bottle of Mirinda will consider product quality, price and availability of the product. Thus, Mirinda in Pakistan particularly focuses its competitive strategy as to producing sufficient variety, reasonable prices, and the availability of the product. SUPPLY CHAIN STRATEGIES STEP ONE: THE CUSTOMER AND SUPPLY CHAIN UNCERTAINTY. Identifying customer needs: RBL needs to understand the customer needs for each targeted segment and the uncertainty the supply chain faces in satisfying these needs. As RBL deals with beverages, which are a fast moving consumer good, it knows the requirements of consumers. Mirinda is considered as a drink which is refreshing during summer, and taken regularly during winter, with demand hiking around festivals such as Eid and occasions such as weddings. RBL caters to both cities and rural areas. It understands the needs of both. As demand for beverages is seasonal, the quantity of product needed for each lot is taken care of with past demand in mind. Consumers generally require a small response time, high service level, reasonable price and some variety (for example mirinda has apple flavor too now). Demand uncertainty and implied demand uncertainty: Demand for Mirinda varies by product. For example there is a greater demand for Mirinda as compared to Mirinda Apple, which is sort of new. Hence, Mirinda has a low demand uncertainty as compared to Mirinda Apple. The product Mirinda is approaching its maturity stage in the PLC whereas Mirinda Apple is in the introductory stage. Mirindas implied demand uncertainty varies with the product type as well as the customer needs. Due to decreased lead time (the customer may purchase its competitors product if Mirinda is not available at that time such as Fanta, Gourmet cola, Amrat cola ), need for greater variety and higher level of service, implied demand uncertainty increases. This is true for cities where unmet demand by Mirinda is met by Coca Cola Company, Gourmet Cola and other such competitors. Supply uncertainty is also affected by new products. New products have higher supply uncertainty. Uncertainty for the capability of the supply chain: After determining the demand uncertainty it takes a look at the uncertainty resulting from the supply chain. Mirinda is not a new product and its market is going towards maturation. The company does not have many difficulties in delivering a product and has a fixed delivery schedule (on daily basis). Mirinda hence has a predictable supply and somewhat uncertain demand depending on market conditions. STEP TWO: UNDERSTANDING THE SUPPLY CHAIN CAPABILITIES: The efficiency and responsiveness varies according to the consumer needs, implied demand uncertainty, product type and market segments. In remote areas Pepsi Co ( Mirinda) focuses on being somewhat efficient as other modes of transportation could turn the product to be highly expensive. According to the company it does not deal with distributors who do not have 20 to 25 vehicles, therefore as the company has focus on cost reduction, uses slow and inexpensive modes of transportation, the demand is certain, and uses economies of scale in production, the product Mirinda is more inclined towards being somewhat efficient. In cities, the company focuses its attention on being highly responsive as Mirinda has to meet short lead time, meet a high service level, handle a large variety of products and respond to wide ranges of quantity demanded especially at the retail stage. Highly efficient somewhat efficient somewhat responsive highly responsive In towns MIRINDA In cities STEP 3: ACHIEVING THE STRATEGIC FIT: The Mirinda supply chain assign different roles to its different stages, the company has to decide either to transfer the responsiveness to the manufacture stage or to the retailer stage as making one stage more responsive allows the other stage to focus on being more efficient. While discussing the Mirindas supply capability it is seen that Mirinda tends to be more responsive in the cities and a bit less in towns. Therefore, transferring the responsiveness to the retailer and distributor, allowing them to face the higher implied demand uncertainty. This in return allows the manufacturer and supplier to be more efficient. At the same time, multiple beverage types contribute to a broader product portfolio causing RBL to adjust its strategies accordingly; tailoring the supply chain to best meet the needs of each beverage demand. SUPPLY CHAIN DRIVERS AND METRICS: Bonding drivers with Product Life Cycle (PLC) Supply chain strategy: Mirinda mainly follows a combined cost effective responsive supply chain strategy in lahore. The intensive supply of the product is being ensured throughout the city market with the help of RBL distributors. Mirinda has been able to reach out to all market segments without any delays because of its business maturity and  comparative business strength. It has the normal beverages sales volumes as compared to any  other cities. Although there is an overwhelming stability in the product market yet there are some remote areas where there are conditions for a possible stock out due to their remoteness. For addressing this risk Mirinda has financed different whole sellers in those areas to respond immediately. Mirinda in Lahore and in most parts of Pakistan can be rightly placed into the category of an ever growing mature business. Responsiveness: In case of Fast Moving Consumer Goods (FMCGs) that target a huge segment of market, responsiveness is a deciding factor for the organizational success. In a typical Pakistani market, quick response enables supply chains to meet the customer demands for evershorter lead times, and to synchronize the supply to meet the peaks and troughs of demand. Mirindas supply chain has been able to reinforce a greater response to the uncertain and unpredictable market behavior only because it has multisided processing facilities and corresponds to a systematic production network with both dedicated and multi-product facilities. The major focus is to determine the processes that are to be integrated in the supply chain  network with their corresponding suppliers, distribution centers and the associated transport links  between them. The major considerations in the design are the supply chain responsiveness and  profitability. Framework for Structuring Drivers: The framework is based on a motive to create strategic fit between the competitive and supplychain strategy. Mirinda Competitive strategy stands to provide a large variety of products very  quickly; simultaneously the supply chain strategy stands to materialize the availability of that  variety of products. Mirinda mainly follows a responsive supply chain strategy. Alignment of mirindas business strategy to a corresponding supply chain strategy is achieved through proper deployment of supply chain drivers. Mirinda has to deal with different set of market segments  simultaneously. Most of the time the approach needs to be responsive enough to grow substantially to be able to compete with uncertain demand, while in many areas demand is certain and very much predictable, so there it incorporates an efficient supply chain strategy. THE FACILITY DRIVER ROLE, LOCATION AND CAPACITY: In RBL the Mirinda is stored, assembled and fabricated at gulberg Lahore..Mirinda has established a flexible and a product-focused production facility in order to respond effectively to the variability in demand.The storage facilities are designed in order to provide maximum possible capacity for the inventory. It has franchising holding bottling operations. OVERALL TRADE OFF ( RESPONSIVE): In order to ensure the responsive strategy implementation, the role of facilities is of prime importance in the supply chain of RBL The large amount of excess capacity allows the facility to be very flexible and to respond to wide surges in demands placed on it. In alignment with the responsive supply chain strategy the facilities have been geographically located close to the market. THE INVENTORY DRIVER ROLE , LOCATION AND SEASONAL INVENTORY: RBL has established a comprehensive plan to ensure the sufficient inventory levels to keep up with the market demand effectively. The inventory type is seasonal .For this purpose the main inventory storage has been established within the main plant area maneet road gulberg Lahore inside RBL. It has the storage capacity of 200,000 Sq Ft and the area is being utilized both horizontally and vertically. The shipping department is in charge for storage and subsequent displacement of the product orders. The  inventory capacity is being utilized and maintained in coordination with the production department and is based on the term production estimates. OVERALL TRADE OFF (RESPONSIVE): Increasing inventory makes the supply more responsive to the customers. At RBL, managers bear a high inventory cost to ensure maximum levels of inventory and to reduce the production and transportation costs. THE TRANSPORTATION DRIVER DESIGN AND CHOICE OF TRANSPORTATION MODE: PTN is providing transport to PEPSI CO( mirinda) in the form of big large trucks.Faster transportation of the products allows RBL to maintain sufficient levels of stock on the shelves.RBLs transportation network is the collection of routes, modes and locations along which the product can be shipped. With the help of distributors the product is being supplied to the market. There are multiple supply and demand points within the city which cater to the market demand. RBL decides and selects different modes of transportation having different characteristics with respect to the speed and size of shipment. OVERALL TRADE OFF ( RESPONSIVE): The transportation network has been designed with a view to ensure responsiveness and boost the availability of the product. For RBL using fast mode of transport increases responsiveness as well as the transportation cost but lowers the inventory holding cost. Transportation driver has a large impact on the responsiveness of the business. THE INFORMATION DRIVER COMPONENTS OF INFORMATION DECISIONS: Connects all the supply chain stages effectively allowing them to coordinate and maximize total supply chain profitability. It is also crucial to the daily operations of each stage in the supply chain. The unit manager utilizes the production scheduling system that is based on information on demand to create a schedule that allows RBL to produce the right amount of product. The warehouse in charge uses this information to create visibility of the warehouses inventory items. They dont have any enabling technologies such as EDI, ERP and RFID OVERALL TRASE OFF (RESPONSIVE): Information sharing helps these firms improve its responsiveness within the market. It helps to accurately forecast demand and realize frequency of updates, measurements of the effects of seasonal factors influencing the production, measurements of variances from the plan and the ratio of demand variability to order variability. Timely and accurate information  enables the distribution managers to fix potential stock out or oversupply problems. THE PRICING DRIVER FIXED PRICING VERSUS MENU PRICING: Mirinda keeps its pricing strategy with the comparison of its competitors for example FANTA. And the demand is seasonal so during the season on period the pricing is done on the fixed basis i.e. summers. And during winters which is the off season period the pricing is done on menu basis for example Rs 2 to Rs 5 ruppees off per 1.5 litre bottle etc. THE SOURCING DRIVER: OUTSOURCED, SUPPLIER SELECTION AND PROCUREMENT: Pepsico has outsourced decisions in its supply chain as RBL is an outsourced company for it. They think that it was best to outsource Mirinda and other beverages aswell because the growth in total supply chain is significant with little additional risk. The responsive components are outsourced such as the PTN aswell which provides transportation to Pepsico ( Mirinda). It has number of suppliers within Lahore and all districts of the country. Both procurement in direct aswell as indirect ways are doneand they have a good coordination between its suppliers and buyers. DISTRIBUTION NETWORK OF MIRINDA Direct distribution: Delivery of post mix cylinders handling of key accounts: The key accounts are  different wholesalers, restaurants and hotels like Pizza Hut, KFC, Metro which  serve as a place for key sale. These are known as national key accounts and are very  important in terms of competition. Export Parties. Indirect distribution: Through Base market distributors Through Outstation distributors Before delivering the product some certain guiding principles are followed for the assessment of  distributors capability by RBL. Applicant must have 30 to 40 vehicles (depending on the area). Applicant must have 40,000 cases of empty bottles. Applicant must deposit Rs.5, 000,000 as a security. RBL uses light and heavy vehicles for safe delivery of goods to the distributors for timely  delivery. It follows the just in time concept which is applicable in Non-seasonal period and not  applicable in the seasonal period. REVIEW AND REVISE DISTRIBUTION: This is usually done through taking over key revenue areas. If the distributor does not achieve its  sales target, the distribution is taken back and an addition of new distributor is done. Therefore  MIRINDAS supply is low supply uncertainty. Some of its supply source capabilities are: Less breakdowns High quality Flexible supply capacity Mature production process FACTORES INFLUENCING DISTRIBUTION NETWORK DESIGN: At the highest level, performance of a distribution network should be evaluated along two  dimensions: 1. Customer needs that are met 2. Cost of meeting customer needs While customer service consists of many components we will consider those measures that are influenced by the structure of the distribution network for Mirinda . Response Time: For Mirinda is minimal as the direct customers for it are the retailers and then  the consumers. So with over 30 to 40 delivery trucks in Lahore , it is readily available to every  retailer within 30 minutes or an hour max . Lahore has 12 warehouses from where the supply to the market is done through trucks provided by PTN. Product Variety: They have made their place in the market with their unique product line ranging from Mirinda to Mirinda Apple with refreshing taste and great quality. Customers Desire: customer desire more for mirinda instead of apple mirinda .Recently, the sales for 250 ml bottles has increased and 1.5 litre bottle decreased but they are trying to increase it as it gives the company higher profits. Availability: The product is always available in stock whenever an order arrives. Whenever the distributors feel that after one loading there could be a stock out they place an order to RBL in advance just to keep the floor with enough stock in hand. The Distributors have 3 days stock as back up with them in order of any malfunctioning of the plant or other such external factors. Customer Experience For Mirinda has always been positive as they receive the product with ease and on time. The retailers are the direct customers as they place an order to the distributors. There has never been a shortage or a delay for mirinda in Metro or Pizza Hut which are the key accounts for the company. Order Visibility They are not really an electronic phenomenon where you can track your order  through computer. It is more of person-to-person contact and one can easily track down their  orders through the designated staff in each sector of Lahore or for that sake all over Pakistan. Returnability: Pepsi Co ( mirinda) has always been very strong in a sense that unsatisfactory items can be  returned and changed on the spot. This is true for both the consumers and the retailers. They have laid down a system through which they can effectively manage this requirement. The retailers are told to take down the  comments and the address or phone numbers from the person who is returning the bottle. It seems at first that a customer always wants the highest level of performance along all these dimensions, in practice however this is not always the case. DESIGN OPTION FOR DISTRIBUTION NETWORK:: Distributor Storage with Carrier Delivery: In Pepsi Co ( mirinda) inventory is not held by the manufacturers at the factories but is held by distributors/retailers in intermediate warehouses and package carriers are used to transport the products from  the intermediate location to the final customer. This requires distributor storage to keep high  levels of inventory because distributor/retailer aggregates demand uncertainty to a lower level  than the manufacturer. Transportation costs for Pepsi are somewhat lower because an economic mode of transportation (e.g. truckload) can be employed for inbound shipments to the warehouse, which is closer to the customer. Facility cost is high because of a loss of aggregation and often end up with higher processing costs. The information structure needed is not that complex. The distribution warehouse serves as a buffer between manufacturer and customer. Real time visibility between customers and warehouse is needed whereas as visibility between customer and manufacturer is not required. Response time is also reduced. Customer convenience is high and order visibility with manufacturer storage becomes easier. Distributor  storage is well suited for medium to fast moving goods and it can also handle higher level of  variety than retail stores VALUE OF DISTRIBUTION SYSTEM: There are basically two components of distribution: Storage Distribution The storage facilities of RBL are designed in order to boost the timely availability of the product. For this purpose the distributors are fully equipped with facilities that are needed to ensure intensive supply of the product. The storage facilities are designed to contain the maximum possible inventory items that are needed at any given time. RBL has established several storage units nearer to the market in order to boost  availability. Transportation conducts inventory movement from point to point in supply chain of RBL. It incorporates a combination of modes and routes at different stages. Transportation choices have a large impact on the responsiveness strategy of the business. RBL has several contracts with several distributors with multiple transport facility that ensure the maximum possible transport of inventory within a short period of time. The distribution does not work between specific supply chain components but it performs a basic function of  integration amongst all supply chain components. The Pepsi Co distribution system linked the entire supply chain for all product categories. The distribution centers and its information network play a key role in that regard. The major object is to carefully track sales of items and offer short replenishment cycle times. The distributors offer stored deliveries too many retail  outlets in the twin cities. Different products are being delivered conveniently on pre-orders. The distribution system is flexible enough to alter delivery schedule depending on customer demand. The Territory Distributor Managers maintain a contact with the retailers in order to book and  place the orders. Whenever a store places an order it is immediately transmitted to the supplier  through the distribution manager. Now RBL receives orders from all distribution centers and the shipment department delivers the orders. At the distribution centre, products from the manufacturer are delivered into different trucks and each truck makes deliveries to multiple retail stores. The number of stores depends  upon the sales volume. The system works on trust and does not require the delivery person to be  present when store personnel scan the delivery. This reduces the delivery time at each store. Each truck has a capacity of 1572 cans.The distribution department is in direct contact with the manufacturers and keeps updating inventory levels. They keep in stock spare three days stock to combat external uncertainty. The distribution department is responsible for all the variety of the products in their portfolio. PepsiCos overall distribution network spreads throughout Pakistan connecting the remotest of places and providing great customer service. Globalization has increased the competition that the company for its products like mirinda is constantly coming up with new projects, campaigns and distribution. RECOMMENDATIONS: RBL doesnt have proper enabling technologies such as EDI , ERP , RFID and EDD . they should be having that for the better performance of its supply chain activities. These engagements would   Identify specific opportunities to improve operational performance and reduce costs within your manufacturing, assembly, supply chain, and customer support processes Define specific process changes and the auto-id technology required to streamline each process step Address the business, manufacturing, logistics, information technology, and financial implications of RFID including starting points and scale-up plans When integrated with enterprise resource planning (ERP) system, demand planning applications can help: Compare calculated forecasts to actual results over time for trend analysis. Focus on hot spots to prepare for whats coming into high demand. Share forecast information securely via the Web through role-based portals. Reduce operating costs. Streamline production. The end result: lower inventory costs, fewer stock outages, faster time to market, and happier customers.