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Ben Lau statistics . machine learning . programming . optimization . research

Supply Chain

1 min read Updated:

Business

供应链到底有多重要? | Supply Chain@小Lin说

ERP

A ERP system is a software application with a centralized database that can be used to collect, store, manage and interpret data from many business activities, including:

  • Sales
  • Forecast
  • Channel
  • Stock
  • Supplier
  • Logistics

A ERP system is mainly used to avoid the bullwhip effect. The effect is the amplification of variability in demand when moving up the supply chain from retailers to manufacturers, which can lead to overproduction, stockouts, and other inefficiencies. This can occur when retailers incorrectly forecast demand or misunderstand anomalies in consumer purchasing behavior.

In reality, designing and implementing an ERP system for an existing business is extremely complicated. Nike’s ERP system, for example, took 7 years to implement and debug a new ERP system, which led to a 20% decrease in stock price and 100 million dollars lost.

SHEIN and ZARA are good examples of having a good supply chain leading to a competitive advantage. ZARA uses RFID to track every piece of clothing, which allows them to track everything from production, customers without the need of human counting, while SHEIN learns customer needs from social network, and launch hundreds of new products every day.