is 466 advanced topics in information systems lecturer : nouf almujally 15 – 10 – 2011
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is 466 Advanced topics in information Systems Lecturer : Nouf Almujally 15 – 10 – 2011. College Of Computer Science and Information, Information Systems Department. Lessons Learnt from Lecture5. SD module Cameron and Whetton 7 questions of evaluating ES success - PowerPoint PPT PresentationTRANSCRIPT
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IS 466 ADVANCED TOPICS IN INFORMATION SYSTEMS
LECTURER : NOUF ALMUJALLY
15 – 10 – 2011
College Of Computer Science and Information, Information Systems Department
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Lessons Learnt from Lecture5
• SD module• Cameron and Whetton 7 questions of
evaluating ES success• What success measurement models are
available?
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Objectives
• Supply Chain• SCM Definition• Components of a SCM System• Matching Supply and Demand• Components of a Supply Chain• The Importance of Supply Chain Management
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4 Supply Chain Management
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What is a Supply Chain?• A supply chain is the system of
organizations, people, activities, information and resources involved in moving a product or service from supplier to customer.
• Supply chain activities transform raw materials and components into a finished product that is delivered to the end customer.
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Supply Chain
Supplier
Manufacturer
Distributor
Retailer
Customers
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A Supply Chain Example1…
CokeJNJ
KellogP&G
GA
FL
AL
TX
Kroger
suppliers
Super market chains
State distributors
V. Highlands
Peachtree
Ocean Drive
Ft. Laud.
Local stores
End customer
Publix
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A Supply Chain Example 2…
CokeJNJ
KellogP&G
Center
Western
North
Eastern
Panda
Carrefour
suppliers
Super market chains
State distributors
Riyadh
Karaj
Jeddah
Makah
Local stores
End customer
Danube
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Supply Chain
• Also referred to as the logistics network• Suppliers, manufacturers, warehouses,
distribution centers and retail outlets – “facilities”
and the
• Raw materials• Work-in-process (WIP) inventory• Finished products
that flow between the facilities
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Supply Chain Processes
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The Supply Chain – Another View
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Suppliers Manufacturers Warehouses &Distribution Centers
Customers
Material CostsTransportation
CostsTransportation
Costs TransportationCostsInventory CostsManufacturing Costs
Plan Source Make Deliver Buy
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What Is Supply Chain Management (SCM)?
• A set of approaches used to efficiently integrate Suppliers Manufacturers Warehouses Distribution centers
• So that the product is produced and distributed In the right quantities To the right locations And at the right time
• System-wide costs are minimized and• Service level requirements are satisfied
Plan Source Make Deliver Buy
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Basic supply chain management system
• A basic supply chain management system has five (5) components:
1. Plan• refers to the over-all strategy of the SCM program including the
development of SCM metrics to monitor2. Source
• refers to the suppliers who'll provide you with goods and services necessary for you to run your business
3. Make • refers to the execution of processes needed to produce, test, and
package your products or services (manufacturing)4. Deliver
• refers to the system for developing a network of warehouses; and getting the products to the customers
5. Buy• refers to the system of receiving orders from customers; invoicing
customers and receiving payment from them
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Supply Chain Management (SCM)
• Supply Chain Management is the design and management of processes across organizational boundaries with the goal of matching supply and demand in the most cost effective way.
Supply
Demand
Mission impossible: Matching Supply and Demand
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• Aims to Match Supply and Demand, profitably for products and services
• Achieves:
The rightProduct
HigherProfits
The rightTime
The rightCustomer
The rightQuantity
The rightStore
The rightPrice
=++ ++ +
Matching Supply and Demand
SUPPLY SIDE DEMAND SIDE
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Why so Difficult to Match Supply and Demand?
• Why is supply chain management difficult?• Different organizations in the supply chain may
have different, conflicting objectives• Manufacturers: long run production, high quality, high
productivity, low production cost• Distributors: low inventory, reduced transportation
costs, quick replenishment capability• Customers: shorter order lead time, high in-stock
inventory, large variety of products, low prices• Supply chains are dynamic - they evolve and
change over time
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SCM in a Supply Network
• Supply Chain Management (SCM) ) is concerned with the management and control of the flows of material, information, and finances in supply chains
Supply
Demand
Products and ServicesCash
Supply SideOEMDemand Side
THAILAND INDIA MEXICO TEXAS USN-Tier Suppliers Suppliers Logistics Distributors Retailers
Information
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Supply Chain for
Denim Jeans
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Supply Chain for Denim Jeans (cont.)
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Components of a Supply Chain21
• External Suppliers– source of raw material• Tier one supplier supplies directly to the
processor• Tier two supplier supplies directly to tier one• Tier three supplier supplies directly to tier two
• Internal Functions include – processing functions• Processing, purchasing, planning, quality,
shipping
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Components of a Supply Chain22
• External Distributors transport finished products to appropriate locations• Logistics managers are responsible for
managing the movement of products between locations. Includes;
• traffic management – arranging the method of shipment for both incoming and outgoing products or material
• distribution management – movement of material from manufacturer to the customer
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The Importance of Supply Chain Management
• Dealing with uncertain environments – matching supply and demand
• U.S Surgical Corporation announced a $22 million loss in 1993 due to “larger than anticipated inventories on the shelves of hospitals”
• Hewlett-Packard and Dell found it difficult to obtain important components for its PC’s from Taiwanese suppliers in 1999 due to a massive earthquake
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The Importance of Supply Chain Management
• Better information sharing among the partners
• The growth of technologies such as the Internet enable greater collaboration between supply chain trading partners
• If you don’t do it, your competitor will
• Availability of SCM technologies on the market
• Firms have access to multiple products (e.g., SAP, Baan, Oracle, JD Edwards) with which to integrate internal processes
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Top 25 Supply Chains
• The Top 25 supply chains report comes out in Novembers.
• The table on the right-hand side is from The Second Annual Supply Chain Top 25 prepared by Kevin Riley and Released in November 2005.
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Dell Computer• Classic case in supply chain management.• Established in 1984, Dell experienced
supply problems in 1993 and thereupon completely redesigned its supply chain process along the lines of what its founder, Michael Dell, called the “direct” model.
• Between 1993 and 1998, Dell's earnings subsequently grew at 65 percent per year.
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Dell Computer (con.)• Dell's supply chain redesign was based on
the following elements. • First, Dell sells directly to customers,
eliminating the wholesaler and retailer.• Second, Dell also takes advantage of new
information technologies in their communications with suppliers who can access Dell's component inventories, production plans, and forecasts in real time and thus keep their production precisely matched to Dell's needs.
• Third, Dell maintains absolute minimum inventory levels at every stage of production, averaging 4 days overall
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Questions ??