04 supply chain planning and control ch13 colour

8/6/2019 04 Supply Chain Planning and Control Ch13 Colour

1/20

13.1

MBA Operations Management

Week 4

Nigel Slack, Stuart Chambers & Robert Johnston, 2004 Operations Management, 4E: Chapter 13

upp y a n ann ng an on ro .

Senior Lecturer: Dr. Louise Hung


2/20

13.2

DemandSupply Coordinated delivery

of products and

Supply chain planning and control


Operations resources Customer requirements

supply chainThe operation The market

Required time, quantity

and quality of products

and services


3/20

13.3

First tier

supplier

Second tier

supplier

First tier

customer

Second tier

customer

End

customer

Demand sideSupply side

Purchasin and Physical distribution


supply management

management

Logistics

Materialsmanagement

Supply chain management

Informationflow

Physical

flow


4/20

13.4

Request for

uotationsRequest for

Preparequotation for Demand

Requests

The operationPurchasing functionSuppliers

The purchasing function brings together the

operation and its suppliers


pro ucts an

services

Produce

products andservices

Select

supplier(s)

Prepare

purchaseorder

,

price, delivery,etc.

Receive

products andservices

customers

Supply to

customers

Quotations

Order

Liaisonbetween

purchasingand the

operation

Deliver


5/20

13.5

B2BRelationship:

Most common, all but the

last link in the supply chain

E-commerce examples:

EDI networks

Tesco Information Exchange

B2CRelationship:

Retail operations

Catalogue operations, etc.


Internet retailers

Amazon.com, etc.

Business

Supply chain relationships

Business Consumer


C2BRelationship:

Consumer offer,

business responds


Some airline ticket

operators

Priceline.com, etc.

C2CRelationship:

Trading swap and

auction transactions


Specialist collector sites

Ebay.com, etc.

Consumer


6/20

13.6

nalOperation

sActivity

hing

tant

Do

Everything

Scope Traditional

Supply

Management

Vertically

Integrated

Operation

Types of supply relationship


The

characterofInte

Do

Nothing

D

Everyt

Imp

or

Resource

Market Relationship

Transactional -

Many Suppliers

Close -

Few SuppliersType of Inter-firm Contact

Virtual

Spot

Trading

Long-term

Virtual

Operation

Partnership

Supply

Management


7/20

13.7

Productive resources

Vertical integration

Relationship type Exchange elements Typical examples

Types of exchange


Goods and servicesInformation

Cash and equity

Control and reporting

Supplier Customer Multi-divisionalfirms, e.g.chemicals, food


8/20

13.8

Design specification

Partnership relationships


Types of exchange


Medium-/long-term plansGoods and services

Knowledge and

investment

Supplier Customer Co-makership,joint venture,e.g. automotive


9/20

13.9

Capacity commitment

Long-term market relationships


Types of exchange


Design specificationDemand forecasts

Blanket orders and

schedules

Supplier Customer Single/dualsource, preferredsupplier,

e.g. defence

electronics


10/20

13.10

Short-term market relationships


Types of exchange


Goods and servicesOrders and documentation

Supplier Customer Spot orders,e.g. routinestationery


11/20

13.11

Schedule

changes impact

market faster

Forecasts

made closer to

demand time

Defects are

detected

faster

New products

and service

faster to market

so can

respond to

market changes

so improved

forecasts

so easier to

improve

quality

so fewer lost

sales from

delayed launch

so reduced

risk of

obsolescence

Supply chain time compression

The effects of supply chain compression


so less need

for safety

stocks

so revenuesare

maximized

so reducedstockholding

costs

so reducedwastage costs

so revenuesare

maximized

so fewerdiscounted

sales

Improved profitability


12/20

13.12Managing the supply chain

First-tiersuppliers

Theoperation

Second-tiersuppliers

First-tiercustomers

Second-tiercustomers


Purchasing andsupply management

Physical distributionmanagement

Logistics

Materials management

Supply chain management


13/20

13.13

Physical distribution management

Operationsperformancedimension

Delivery speed

Road Rail Water Air Pipeline

Mode of transport

2 3 1 5 4


e a y

Quality

Cost

Route flexibility

2

3

1

3

4

2

4

5

3

5

2

4

1

1

5

1 - best performance, 5 - worst performance


14/20

13.14

Integrating the organizations functions

Options for integrating the organizations functions:

- materials management;


- merchandising;

- logistics;

- supply chain management.


15/20

13.15

Increasing degrees of integration

Fully vertically integrated

Semi-hierarchy

Co-contracting


Co-ordinated contracting

Co-ordinated revenue links

Medium- to long-term trading commitments

Short-term trading commitments


16/20

13.16 Motor Vehicle Parts Distribution Chains

Distribution

Chain of Parts

Distribution

Chain of

Dealer

network

Vehicle

manufacturer

Installer

Local

distributor

Area

distributor

Prime

distributor


Manufacturer

V.M.

Manufacturing

Chain

Supplier

Sub-supplier

Stockist

Raw materials


17/20

13.17

2

1

3rd LEVEL

SUPPLIER

2nd LEVEL

SUPPLIER

1st LEVEL

SUPPLIER

ORIGINAL

EQUIPMENT

MFG.

Prodn. Stock Prodn. Stock Prodn. Stock Prodn. Stock

100 100 100 100 100

100

100

100

100

100

100

100

100

100

95


MARKET

6

5

43 95

95

95

95

3 2 1 OEM

ALL OPERATIONS HOLD ONE PERIODS STOCK


18/20

13.18

2

1

3rd LEVEL

SUPPLIER

2nd LEVEL

SUPPLIER

1st LEVEL

SUPPLIER

ORIGINAL

EQUIPMENT

MFG.

Prodn. Stock Prodn. Stock Prodn. Stock Prodn. Stock

100 100 100 100 100

100

100

100

100

100

100

100

100

100

95


6

5

43 105

105

95

95

3 2 1 OEM MARKET

ALL OPERATIONS HOLD ONE PERIODS STOCK


19/20

13.19

Leanrelationship

Price Quality Information Relationship

Planned Kaizen Transparent Integrated

The nature of the interaction between

players in supply networks is changing


Traditional

relationship

relationshipNegotiated

Bids

Monitored

Historical

Shared

Secretive

Cooperative

Adversarial

Time

This means higher stress levels not lower!


20/20

13.20

Price

CostPrice

From cost driving prices up

To prices driving cost down


Cost

Time Time

From To

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