Tailored logistics systems

How can tailored systems improve a supply chain To provide some intuition, consider a manufacturer who receives orders for two products. Orders for product 1 arrive at the rate of X, orders per day. Orders for product 2 arrive at the rate of X2 orders per day. The number of orders received each day X = Xj + X2. Both products share a common production facility that produces products at the rate of fi per day. Assume that 

If orders are processed in their order of arrival (first in, first out), the lead time for any product order is 

Suppose that demand per day for the first product follows a normal distribution with a mean of m, and a standard deviation of Oj. Also the second product demand has a mean of nii and a standard deviation of Qj-Assume that O, — O2. 

Wliat can the matiiifactiirer do to dectease inventory levels for these products  

Suppose we manage the producrion facility so that we prioritize product 1 over product 2. Thus orders for product 1 are processed before we process orders for product 2. 

---

To implement collaboration in a relationship, partners must agree on the purpose of collaboration and means of achieving it. Collaboration may necessitate certain changes in how the companies operate. It should be tailored to specific business processes such as, order placement, order fulfillment, logistics, and payment. Cisco Systems coordinated supply and demand across its supply chain with an intelligent-software for early detection of conflicts and their resolutions (Lee and Whang 2004). 

---