Supply Chain 4.0: A New Strategic Management System


Today, it feels like everything has changed—it’s either been closed, postponed, or canceled. Some states have officially shut down. You’re working from home, while watching your kids (and trying to teach them). You haven’t seen or hugged your loved ones in weeks.
Traditionally, the BWE has been studied in serial supply chains. That is also the setting of the famous beer game, where the typical demand pattern across the supply chain looks like this: for a relatively small change in demand seen by the retailer, the demand variability progressively increases at the more upstream wholesaler, distributor, and factory (see the figure below). This leads to capacity shortages, stockouts, excess inventory, and increased operational costs. No wonder BWE has received a lot of attention among academics and practitioners alike.

It also can help to remind yourself that these catastrophic thoughts aren’t “expressions of facts,” Rajaee said. Rather, they’re “expressions of fear”—our brain’s way of trying to protect us, she said.

For that, we teamed up with Bill Schmidt from Cornell and Jing Wu from the Chinese University of Hong Kong and turned to data. First, we had to build a supply network and determine the positions of firms in the network: which firms are more downstream and which are more upstream? In a network that looks like the one on the left, it is not easy. We used the distance to final consumers as a measure of upstreamness.

What can managers take away from this study?

First, suppliers can use the network of customers to shield from the adverse effects of demand distortion exhibited by downstream customers. A right mix of customers can help smooth out spikes and dips in their order patterns. That, in turn, helps maintain steady utilisation of resources, and give employees predictable schedules.
Maybe even deeper ways. For example, tap into technology by using Zoom, Skype, or FaceTime to virtually play games together, said Sheva Rajaee, MFT, founder of The Center for Anxiety and OCD in Irvine, Calif.Or try these additional connection boosters with your loved ones, which come from Clinton Power:

  1. Watch the same movie at the same time and text about your reactions
  2. Create a shared Spotify playlist and listen together
  3. Read a chapter of the same book every day and talk about it

New York City psychotherapist and coach Kate Crocco, MSW, LCSW, suggested being the first person to reach out. “Often the best medicine for fear and sadness is being there for someone else.”