supply chain management operations management - 5 th edition chapter 10 roberta russell &...
Post on 20-Dec-2015
261 Views
Preview:
TRANSCRIPT
Supply Chain ManagementSupply Chain Management
Operations Management - 5th EditionOperations Management - 5th Edition
Chapter 10Chapter 10
Roberta Russell & Bernard W. Taylor, IIIRoberta Russell & Bernard W. Taylor, III
10-10-22
What is a Supply Chain?What is a Supply Chain?
All facilities, functions, activities, All facilities, functions, activities, associated with flow and transformation associated with flow and transformation of goods and services from raw materials of goods and services from raw materials to customer, as well as the associated to customer, as well as the associated information flowsinformation flows
An integrated group of processes to An integrated group of processes to “source,” “make,” and “deliver” products“source,” “make,” and “deliver” products
All parties involved, directly or indirectly, All parties involved, directly or indirectly, in the fulfillment of a customer requestin the fulfillment of a customer request
10-10-33
““Supply Networks”Supply Networks”
Most supply chains have multiple Most supply chains have multiple supplierssuppliers A better term would be Supply NetworksA better term would be Supply Networks
10-10-44
Supply Chain IllustrationSupply Chain Illustration
10-10-55
Supply Supply Chain Chain for for Denim Denim JeansJeans
10-10-66
Supply Supply Chain Chain
for for Denim Denim
Jeans Jeans (cont.)(cont.)
10-10-77
Supply Chain ProcessesSupply Chain Processes
10-10-88
Supply Chain for Service Supply Chain for Service ProvidersProviders
More difficult than manufacturingMore difficult than manufacturing Does not necessarily focus on the flow of Does not necessarily focus on the flow of
physical goodsphysical goods Focuses on human resources and Focuses on human resources and
support servicessupport services More compact and less extendedMore compact and less extended
10-10-99
Supply Chain Management (SCM)
Managing flow of information through supply chain in order to attain the level of synchronization that will make it more responsive to customer needs while lowering costs
Keys to effective SCM information communication cooperation trust
10-10-1010
Objectives of SCMObjectives of SCM
Maximize valueMaximize value Increase firm’s profitabilityIncrease firm’s profitability Increase revenueIncrease revenue
Responsiveness, flexibilityResponsiveness, flexibility Reduce costsReduce costs
For making product, transportation, receiving For making product, transportation, receiving orders, and customer serviceorders, and customer service
10-10-1111
Value vs. Supply ChainValue vs. Supply Chain
Value chain every step from raw materials to the eventual end
user ultimate goal is delivery of maximum value to the
end user Supply chain
activities that get raw materials and subassemblies into manufacturing operation
Terms are often used interchangeably
10-10-1212
SCM Decision PhasesSCM Decision Phases
Supply chain strategy or designSupply chain strategy or design Supply chain planningSupply chain planning Supply chain operationsSupply chain operations
10-10-1313
Strategy and DesignStrategy and Design
How should the SC be structured over How should the SC be structured over several years?several years?
What should be the locations and What should be the locations and capacities of production and capacities of production and warehousing?warehousing?
How should we take into account How should we take into account uncertainty in future market conditions?uncertainty in future market conditions?
10-10-1414
How is Strategic Fit Achieved?How is Strategic Fit Achieved?
Step 1: Understanding the customer and Step 1: Understanding the customer and demand uncertaintydemand uncertainty
Step 2: Understanding the supply chainStep 2: Understanding the supply chain Step 3: Implementing policies to match Step 3: Implementing policies to match
strategic business model with the supply strategic business model with the supply chainchain
10-10-1515
Step 1: Understanding Customer Step 1: Understanding Customer and Demand Uncertaintyand Demand Uncertainty
Identify the needs of the customer segment(s) Identify the needs of the customer segment(s) being servedbeing served
Demand uncertainty: how much product is Demand uncertainty: how much product is demanded by each customer segment?demanded by each customer segment?
SC uncertainty: what can go wrong within the SC uncertainty: what can go wrong within the SC?SC? Late deliveries, inflated orders, long variable lead Late deliveries, inflated orders, long variable lead
times, incomplete shipments, bad quality shipmentstimes, incomplete shipments, bad quality shipments One “solution” to this problem is to hold extra One “solution” to this problem is to hold extra
inventory.inventory. Is this a good idea?Is this a good idea?
10-10-1616
Bullwhip EffectBullwhip Effect
Occurs when slight demand variability is magnified as information moves back upstream
10-10-1717
Step 2: Understanding the SCStep 2: Understanding the SC
There is a cost to achieving There is a cost to achieving responsivenessresponsiveness
High Low
Low
High
Responsiveness
Cost
10-10-1818
Step 3: Achieving Strategic FitStep 3: Achieving Strategic Fit
Ensure SC is consistent with target customers’ Ensure SC is consistent with target customers’ needsneeds
Implied uncertainty spectrum
Responsive supply chain
Efficient supply chain Certain
demandUncertain demand
Responsiveness spectrum
Zone of
Strateg
ic
Fit
10-10-1919
Supply Chain PlanningSupply Chain Planning
Intermediate range planning (quarter to a Intermediate range planning (quarter to a year)year)
Similar to aggregate planning (Chap 13)Similar to aggregate planning (Chap 13) Start with forecast, consider options for Start with forecast, consider options for
supply, timing of marketing promotionssupply, timing of marketing promotions
10-10-2020
Supply Chain OperationsSupply Chain Operations
Daily to weekly planningDaily to weekly planning Goal is handle incoming order in best Goal is handle incoming order in best
possible mannerpossible manner Allocate inventory or production to Allocate inventory or production to
particular orders, decide shipment mode, particular orders, decide shipment mode, set delivery schedule, place set delivery schedule, place replenishment ordersreplenishment orders
10-10-2121
Supply Chain IntegrationSupply Chain Integration
Getting the various supply chain Getting the various supply chain members to collaborate and work members to collaborate and work togethertogether
IT has been an integral partIT has been an integral part
10-10-2222
Process View of a SCProcess View of a SC
Two main viewsTwo main views Cycle ViewCycle View
Clearly defines processes involved and the Clearly defines processes involved and the owners of each processowners of each process
Push/Pull ViewPush/Pull View
10-10-2323
Cycle ViewCycle View
Customer Order CycleCustomer Order Cycle
CustomerCustomer
RetailerRetailer
DistributorDistributor
ManufacturerManufacturer
SupplierSupplier
Replenishment CycleReplenishment Cycle
Manufacturing CycleManufacturing Cycle
Procurement CycleProcurement Cycle
Customer ArrivalCustomer Arrival
Customer Order EntryCustomer Order Entry
Cust Order FulfillmentCust Order Fulfillment
Cust Order ReceivingCust Order Receiving Retail Order TriggerRetail Order Trigger
Retail Order EntryRetail Order Entry
Retail Order FulfillmentRetail Order Fulfillment
Retail Order ReceivingRetail Order Receiving Order Arrival from Order Arrival from
warehouse/distributorwarehouse/distributor
Production SchedulingProduction Scheduling
Manufacturing & ShippingManufacturing & Shipping
Receiving at Receiving at warehouse/distributorwarehouse/distributor Order from manufacturerOrder from manufacturer
Production or raw Production or raw materialsmaterials
ShippingShipping
10-10-2424
Push/Pull ViewPush/Pull View
Categorizes processes based on Categorizes processes based on whether:whether: They are initiated in response to a customer They are initiated in response to a customer
order (PULL)order (PULL) They are initiated in anticipation of a They are initiated in anticipation of a
customer order (PUSH) customer order (PUSH)
Examples?Examples?
10-10-2525
Macro ProcessesMacro Processes
All SCM processes can be classified into 3 All SCM processes can be classified into 3 macro processesmacro processes Customer Relationship Management (CRM) – Customer Relationship Management (CRM) –
Customer/FirmCustomer/Firm Market, sell, call center, order managementMarket, sell, call center, order management
Internal Supply Chain Management (ISCM) – Firm Internal Supply Chain Management (ISCM) – Firm Strategic planning, demand planning, supply planning, Strategic planning, demand planning, supply planning,
fulfillment, field servicefulfillment, field service Supplier Relationship Management (SRM) – Supplier Relationship Management (SRM) –
Firm/SupplierFirm/Supplier Sourcing, negotiation, buy, design collaboration, supply Sourcing, negotiation, buy, design collaboration, supply
collaborationcollaboration
10-10-2626
Suppliers and OutsourcingSuppliers and Outsourcing
Sourcing selection of suppliers
Outsourcing purchase of goods and services from an
outside supplier Core competencies
what a company does best Single sourcing
a company purchases goods and services from only a few (or one) suppliers
10-10-2727
DistributionDistribution
Encompasses all channels, processes, and Encompasses all channels, processes, and functions, including warehousing and functions, including warehousing and transportation, that a product passes on its transportation, that a product passes on its way to final customerway to final customer
Often called logisticsOften called logistics LogisticsLogistics
transportation and distribution of goods transportation and distribution of goods and servicesand services
Driving force today is speedDriving force today is speed Particularly important for Internet dot-comsParticularly important for Internet dot-coms
10-10-2828
Amazon.com
10-10-2929
Distribution Centers (DCs)Distribution Centers (DCs)
DCs are some of the largest business DCs are some of the largest business facilities in the United Statesfacilities in the United States
Trend is for more frequent orders in Trend is for more frequent orders in smaller quantitiessmaller quantities
Flow-through facilities and automated Flow-through facilities and automated material handlingmaterial handling
PostponementPostponement final assembly and product configuration final assembly and product configuration
may be done at the DCmay be done at the DC
10-10-3030
TransportationTransportation
Rail low-value, high-density, bulk
products, raw materials, intermodal containers
not as economical for small loads, slower, less flexible than trucking
Trucking main mode of freight
transport in U.S. small loads, point-to-point
service, flexible More reliable, less damage
than rails; more expensive than rails for long distance
10-10-3131
Transportation (cont.)Transportation (cont.)
Air most expensive and fastest, mode of
freight transport lightweight, small packages <500 lbs high-value, perishable and critical
goods less theft
Package Delivery small packages fast and reliable increased with e-Business primary shipping mode for Internet
companies
10-10-3232
Transportation (cont.)Transportation (cont.)
Water low-cost shipping mode primary means of international shipping U.S. waterways slowest shipping mode
Intermodal combines several modes of shipping-
truck, water and rail key component is containers
Pipeline transport oil and products in liquid form high capital cost, economical use long life and low operating cost
10-10-3333
SCM SoftwareSCM Software
Enterprise Resource Planning (ERP) software that integrates components of a
company by sharing and organizing information and data
SAP was first ERP software mySAP.com
web enabled modules that allow collaboration between companies along the supply chain
10-10-3434
Recent Trends in SCMRecent Trends in SCM
RFIDRFID GlobalizationGlobalization Supply chain securitySupply chain security Network optimizationNetwork optimization Transportation issuesTransportation issues
10-10-3535
RFID CapabilitiesRFID Capabilities
10-10-3636
RFID Capabilities (cont.)RFID Capabilities (cont.)
10-10-3737
RFID in (RFID in (Future?Future?) Wal-Mart) Wal-Mart
10-10-3838
Global Supply ChainGlobal Supply Chain
To compete globally requires an To compete globally requires an effective supply chaineffective supply chain
Information technology is an Information technology is an “enabler” of global trade“enabler” of global trade
Nations form trading groupsNations form trading groups No tariffs or dutiesNo tariffs or duties
10-10-3939
Obstacles to Global Chain Obstacles to Global Chain TransactionsTransactions
Increased documentation for invoices, cargo insurance, letters of credit, ocean bills of lading or air waybills, and inspections
Ever changing regulations that vary from country to country that govern the import and export of goods
Trade groups, tariffs, duties, and landing costs Limited shipping modes Differences in communication technology and
availability
10-10-4040
Obstacles to Global Chain Obstacles to Global Chain Transactions (cont.)Transactions (cont.)
Different business practices as well as language barriers
Government codes and reporting requirements that vary from country to country
Numerous players, including forwarding agents, custom house brokers, financial institutions, insurance providers, multiple transportation carriers, and government agencies
Since 9/11, numerous security regulations and requirements
10-10-4141
Effects of 9/11 on Global ChainsEffects of 9/11 on Global Chains
Increase security measuresIncrease security measures added time to supply chain schedulesadded time to supply chain schedules Increased supply chain costsIncreased supply chain costs
24 hours rules for “risk screening”24 hours rules for “risk screening” extended documentationextended documentation extend time by 3-4 daysextend time by 3-4 days
Inventory levels have increased 5%Inventory levels have increased 5% Other costs Other costs include:
new people, technologies, equipment, surveillance, communication, and security systems, and training necessary for screening at airports and seaports around the world
top related