When GSPM is carried out effectively, the effects can be seen in total cost, risk management and global leverage. Total cost is already a standard benefit to Supply Chain Management; however both risk management and global leverage are benefits that are often overlooked. With consolidation of suppliers to remain competitive, it is important to balance total cost and supply risk ensuring quality and timeliness. Global leverage adds value to the firm by positioning the firm in a place to benefit from the potential arenas it operates in. .
Forecasting.
The article "Is Forecasting a Waste of Time?" was taken from the July/August 2002 issue of Supply Chain Management Review. The article takes an in-depth look at different sales forecasting models, which are used in today's business environment. The author points out that many companies undergo forecasting activities that fail to add value to the overall forecast. Inherent biases exist through forecasters such as sales reps, marketers, and management, all of whom tend to have alternative agendas. For example, a sales rep might underestimate demand for a good, in effort to meet quotas more easily. The author goes on to describe a superior form of forecasting, the future value added approach. The approach measures the change in forecasting accuracy due to an activity in the forecasting process. By comparing the forecast accuracy after a process activity to the accuracy achieved without that activity, mangers are able to figure out which steps in the forecasting process are positive, and which ones can be eliminated.
Justification for Choice of Articles.
The reason we selected the Avon article is that it pertained to the topic our group had picked, which is Supply Chain Management. It was short and to the point. The article didn't go into great detail about things, but gave enough background information so that the reader had a general idea of how large Avon is and the problem it was facing.
