UCAM MBA

Supply Chain Planning, Modelling

and Analytics

Qualitative and Quantitative

Aapproaches to
Supply Chain Operations

Sidath Waidyasekera
MBA(PIM-USJ), PG Dip Mkt(UK), MCIM(UK), MILT(UK),
MIDPM(UK), MSLIM(SL), MIM(SL)
Chartered Marketer

Winfield Academy of Business

& Finance
1
Textbooks
 Chapter Outline
1. Qualitative and Quantitative approaches to
supply chain operations
2. Forecasting techniques
3. The appropriateness of supply net works
4. Location planning models for different entities
in the supply net work
5. Inventory control & management approaches

5
 What is the Supply Chain
Planning Process?
Supply chain planning is the process of planning a product from raw
material to the consumer. It includes supply planning, production planning,
demand planning, and sales and operations planning.

• Supply planning determines how best to fulfill the requirements created from the
demand plan. The objective is to balance supply and demand in a manner that
achieves the financial and service objectives of the enterprise.
• Production planning addresses the production and manufacturing modules
within a company. It considers the resource allocation of employees, materials,
and of production capacity.
• Demand planning is the process of forecasting demand to make sure products
can be reliably delivered. Effective demand planning can improve the accuracy
of revenue forecasts, align inventory levels with peaks and troughs in demand,
and enhance profitability for a particular channel or product.
• Sales and operations planning (S&OP) is a monthly integrated business
management process that empowers leadership to focus on key supply chain
drivers, including sales, marketing, demand management, production, inventory
management, and new product introduction
 Qualitative and Quantitative approaches

R D
Qualitative Quantitative
approach approach
• Customer Satisfaction, • Order to deliver lead time,
• Product Quality, • Supply chain response
time,
• Delivery performance,
• Flexibility,
• Resource utilization.
 Qualitative Approach
• Beamon (1999) categorized SC performance measures in three main types;
Resource, Output and Flexibility and declared that output measures include
customer responsiveness, quality and quantity of the final
product produced. Some of the output measures can be measured numerically
such as number of items produced but some of them such as customer
satisfaction and product quality cannot be measured numerically.
• Qualitative category is divided into quality, flexibility, visibility, trust and
innovativeness. Chan (2003) claimed that quality factor of the mentioned criteria
have a full picture of criterion which should be interpreted in the SCM qualitative
performance. Quality is categorizes into customer satisfaction, customer
response time, lead time, on time delivery, fill rate, stock-out probability and
accuracy.
Quality Performance measure
in supply chain
Qualitative Performance
Measurement Framework
 Quantitative Approach
• Quantitative Supply Chain Optimization, or Quantitative Supply Chain in
short, is a broad perspective on supply chains that, simply put, aims to
make the most of human intelligence, augmented with the capabilities of
modern computing resources. Yet, this perspective is not all-inclusive. It
does not pretend to be the endgame solution to supply chain
challenges, but to be one complementary approach that can nearly
always be used to improve the situation.
• Quantitative Supply Chain helps your company to improve quality of
service, to reduce excess stocks and write-offs, to boost productivity, to
lower purchase prices and operating costs … and the list goes on.
Supply chain challenges vary wildly depending on different situations
• Quantitative Supply Chain embraces this diversity and strives, all while
facing the resulting complexity. However, for supply chain practitioners
who are used to more classical approaches to optimize their supply
chains, Quantitative Supply Chain might feel a bit bewildering
 Learning Objectives
• Describe the quantitative analysis approach,
• Understand the application of quantitative analysis in a real
situation ,
• Describe the three categories of business analytics,
• Describe the use of modeling in quantitative analysis ,
• Use computers and spreadsheet models to perform quantitative
analysis,
• Discuss possible problems in using quantitative analysis,
• Perform a break – even analysis.
 Introduction
• Quantitative analysis can be applied a wide variety of
problems,
• Not enough to just know the mathematics of a technique,
• Must understand the specific applicability of the technique,
its limitations and assumptions,
• Successful use of quantitative techniques usually results in
a solution that is timely, accurate, Flexible, economical,
reliable and easy to understand and use.
 Business Analytics
• Descriptive analytics – Statistical measures such
as means and standard deviations , Statistical
quality control,
• Predictive analytics – Decision analysis and
decision trees, Regression models, Forecasting,
Project scheduling, waiting line models, simulation
• Prescriptive analytics – Inventory models such
as the economic order quantity, linear
programming, Transportation and assignment
models, network models.
The Quantitative analysis Approach