Presentation on

Obstacles to co-ordination in supply chain

Presented to Presented by
Dr Malini TN Chandan M P Tejaswi
Department of Management Studies Anusha S G Vidya K M
Monisha S Shreyas R
NMIT, Bengaluru
Obstacles to co-ordination in supply chain is
concerned with

• Incentive obstacles
• Information processing obstacles
• Operational obstacles
• Pricing obstacles
• Behavioral obstacles
Incentive obstacles

• It refers to situation in which incentives offered to different stages or

participants In a supply chain lead to actions that increases vaiability
and reduce total supply chain profits.

• It includes
 Local Optimization within functions or stages of the supplychain
 sales force incentives
Information processing obstacles
• Information processing obstacles refer to situation in which demand
information is distorted as it moves between different stages of the
supply chain, leading to increased variability in orders within the
supply chain.

• It includes
 Forecasting based on orders and not customer demand
 Lack of information sharing
Operational obstacles

• It refers to actions taken in the course of placing and filling orders that
lead to an increase in variability.

• It includes
 Ordering in large lots
 large replenishment lead time
 Rationing and shortage gaming
Pricing obstacles
• It refers to situation in which the pricing policies for a product lead to
an increase in variability of orders placed.

• It includes
 lot size-based on quantity discounts
 Price fluctuation
Behavioral obstacles
• Behavioral obstacles refer to problems in learning within organization
that contribute to the bullwhip effect.

• It includes
 impact of one action in other stage of supplychain
 unable to identify the root cause
 local analysis
 opportunistic and duplication of effort
THANK YOU