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MIT Supply Chain Management Program – Lemonade Video

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MIT Supply Chain Management Program – Lemonade Video

The MIT Supply Chain Management program’s homage to lemonade stands with a serious lesson about relying solely on technology to propel your business forward.


The MIT Supply Chain Management (SCM) program often uses creative, simplified examples to explain complex concepts. In the “Lemonade Stand” video, the lemonade stand is used as an analogy to introduce and explain basic supply chain management principles.

Summary of the Video:

  1. Introduction to Supply Chain:
    • The video begins by explaining the concept of a supply chain through a lemonade stand. A supply chain includes all the processes involved in producing and delivering a product to the customer, from sourcing raw materials to production, distribution, and final delivery.
  2. Demand Forecasting:
    • The video shows how estimating the number of lemonade cups customers will buy is crucial. Inaccurate demand forecasting can lead to either overproduction (wasting resources) or underproduction (losing potential sales).
  3. Inventory Management:
    • The importance of managing inventory levels is highlighted. The lemonade stand needs to ensure it has enough lemons, sugar, and cups without overstocking, which ties up capital and storage space.
  4. Production Planning:
    • It also discusses the planning involved in producing the lemonade, such as the timing and quantity of production. This involves making decisions about how much lemonade to make based on the forecasted demand.
  5. Distribution and Logistics:
    • The video touches on how the lemonade needs to be delivered to the customers efficiently, considering factors like location, transportation costs, and delivery timing.
  6. Supply Chain Optimization:
    • Finally, the video might illustrate how optimizing these processes—demand forecasting, inventory management, production planning, and distribution—can lead to a more efficient and profitable operation.

The video aims to provide a foundational understanding of supply chain management through a simple, everyday example that is easy to grasp. This makes it easier for viewers to relate to and apply the concepts to more complex supply chains in real-world scenarios.

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SCM Quotes

  • “Don’t let the digital supply chain scare you.  Big data, IoT, cloud, AI, drones and deep learning are just ways to improve the supply chain.” ~SupplyChainToday.com
  • “Automation and technology would be a great boon if it were creative if there were more leisure more opportunity to engage in raising a family providing guidance to the young all the stuff we say we need. America will work if we’re all in it together. It’ll work when there’s a shared sense of destiny. It can be done!” ~Jerry Brown
  • “Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.” ~ W. Edwards Deming
  • “Leaders win through logistics.  Vision, sure. Strategy, yes.  but when you go to war, you need to ahve both toilet paper and bullets at the right place at the right time.  In other words, you must win through superior logistics.” ~Tom Peters
  • “Supply Chain – the supply chain starts from the origin of the raw material and ends once the product has been discarded or recycled.”  ~SupplyChainToday.com
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