Decision Support System Improves Supply Chain Operations

Military clothing retailers employ a traditional Economic Order Quantity (EOQ) strategy, producing infrequent, large orders that cause serious production scheduling and delivery problems for manufacturers, producing what is sometimes called the bullwhip effect. These problems delay manufacturer response and cause stock outages at the retailer. This paper describes a decision support system that helps increase product visibility in the supply chain and establishes a more frequent, regular ordering scheme based on a forecast of demand. In one supply chain in which this system was deployed stock outages were reduced to near zero and inventories were reduced by $6 million at retail. In another supply chain the system improved product visibility and assisted intelligent production scheduling by the manufacturer, resulting in improved deliveries and thus greater satisfaction of both manufacturer and retailer.