Main Function of SCM (Part II)

Main Functions

Procurement (supplier selection, optimal procurement policies, etc.)

Manufacturing (plant location, product line selection, capacity planning, production scheduling, etc.)

Distribution (warehouse location, customer allocation, demand forecasting, inventory management, etc.)

Logistics (selection of logistics mode, selection of ports, direct delivery, vehicle scheduling, etc.)

Global Decisions (product and process selection, planning under uncertainty, real-time monitoring and control, integrated scheduling)

Logistics

To manage the supply chain and science of managing and controlling the flow of goods, information and other resources like energy and people between the point of origin and the point of consumption in order to meet customers' requirements

To involve the integration of information, transportation, inventory, warehousing, material handling, and packaging

Design Options for Facility Decision Making

Manufacturer Storage with Direct Shipping Manufacturer Storage with Direct Shipping and

In-Transit Merge Distributor Storage with Carrier Delivery Distributor Storage with Last Mile Delivery Manufacturer or Distributor Storage with

Consumer Pickup Retail Storage with Consumer Pickup Selecting a Distribution Network Design

Response TimeResponse Time

Variation in Logistics Costs and Response Time with Number of Facilities

Number of FacilitiesNumber of Facilities

Total Logistics CostsTotal Logistics Costs

Manufacturer or Distributor Storage with Customer Pickup

Factories

Retailer

Pickup Sites

Product FlowInformation Flow

Cross Dock DC

Customer Flow

Customers

Global Decisions

Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.

Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements.

Global Decisions

Product design coordination, so that new and existing products can be optimally integrated into the supply chain, load management

Information Technology infrastructure, to support supply chain operations.

Where-to-make and what-to-make-or-buy decisions

Case Study : UPS’s Global Supply Chain Solution for Cisco

Cisco asked UPS Supply Chain Solutions to re-engineer and manage its European supply chain

“The key for us was integrating a solution that was seamless to both the customer and Cisco,” stated Edwin de Boer, Manager of EMEA Logistics, Cisco Systems

UPS’s Challenges

Cisco’s shipping area suffered congestion, with more than 150 different transportation providers picking up finished goods.

Cisco had limited control or visibility of finished goods in the shipping area.

Customer service opportunities were limited. Transportation costs for European customers

were higher than they would have been for a coordinated distribution system

UPS Supply Chain Solution

Create an integrated solution to manage transportation from manufacturer to Cisco customers. Crossdocking, fulfillment and VAS occur at a centralized distribution center

How did technology help UPS and Cisco ?

To integrate UPS supply chain solution with Cisco ERP system

Every logistics movement registered in the UPS Supply Chain Solutions system is also registered immediately in the Cisco system

To allow the customers to compile and send their own shipping reports via the Internet

The Outcome

Consolidated transportation carriers from 150 to 6 total

Achieved online visibility of the supply chain Enabled time-definite deliveries and consistent

rates Handled customs clearance, documentation,

billing and carrier selection

Discuss the following questions:

What problems do UPS address? How does UPS supply chain solution help solve these problems?

What issues and challenges do Cisco present? What can be done to address these issues?

What are the business as well as the technology issues that should be addressed when UPS and Cisco integrate global supply chain solution?