chap010.ppt supply chain management 000
TRANSCRIPT
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McGraw-Hill/Irwin
The McGraw-Hill Companies, Inc. 2007, All Rights Reserved
Supply Chain Management
Chapter 10
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Chapter 10 Outline
Definitions and Terminology
System Interactions
Coordination in Supply Chain
Measuring Supply Chain PerformanceSupply Chain Strategies
Structural Improvement
Improvement in InfrastructureThe Internet and Supply Chains
Virtual Supply Chains
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Definitions and Terminology
Supply Chain
Supply Chain Management
Distribution ChannelDemand management
Logistics management
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Supply Chain
The sequence of business processes and
information that provides a product or service
from suppliers through manufacturing and
distribution to the ultimate consumer.
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Supply Chain Management
Planning, design, and control of the flow of
information and materials along the supply
chain in order to meet customer requirements
in an efficient manner, now and in the future.
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Distribution Channel
The route from the producer forward through the
distributors to the customer
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Demand Management
Managing the demand for goods or services
along the supply chain.
Demand can be managed through such
mechanisms as products, pricing, promotion,
and distribution.
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Logistics Management
If broadly defined, it is the same as supply
chain management.
Narrowly defined, logistics management is
concerned with inbound transportation and
outbound distribution.
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A Typical Supply Chain
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System Interactions(System Dynamics in Supply Chains)
Supply chain is a highly interactive system.
Decisions in each part of the chain affect the
other parts.
There is an accelerator (bull whip) effect
The best way to improve a supply chain is to
reduce the total replenishment time and to feed
back actual demand information to all levels.
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Widget Example (Figure 10.2): Retail Level
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Widget Example (Figure 10.2): Wholesale Level
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Widget Example (Figure 10.2): Factory Level
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Coordination in the Supply Chain
Need for coordination both within firms and
across firms
Supply chains must be managed across
organizational boundaries.
Parallel between supply chain and quality
improvement
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Measuring Supply Chain
Performance (1)
Deliveryon time delivery of entire orders.
Quality
Customer satisfaction
Customer loyalty
Time
Total replenishment time
Cash to cash cycleDays in inventory + days in accts receivable-days inaccounts payable
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Measuring Supply Chain
Performance (2)
Flexibility
Time to change volume or product mix by a
certain percentage
Maximum percentage of change in volume or
product mix in fixed time perion
Cost
Total delivered cost
Value added or productivity
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Supply Chain Strategies
Functional productscommodity-like
Efficient, low cost supply chain
Innovative products
Flexible, fast supply chain
Firms should sort their products and apply the
appropriate strategies
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Structural Improvement
Basic Ways to Improve Supply Chain Structure:
Change structure
Capacity, Facilities, Process technology, vertical
integration
Change infrastructure
People, Information systems, Organization, Production
and inventory control, Quality control systems
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Forms of Structural Change in a
Supply Chain
Forward and Backward Integration
Major process simplificationChanging the configuration of factories,
warehouses, or retail locations
Major product redesignOutsourcing logistics to a third party.
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Improvement in Infrastructure
Cross-functional teams
Partnerships with suppliers and customers
Set-up time reduction to reduce lot sizesIntegrated information systems
Cross-dockingkeeps goods out of the
warehouses.
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The Internet and Supply Chains
Fundamental processes in supply chains:
Order placement
Order fulfillment
e-Procurement and its types
Potential problems with e-Procurement
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Processes for e-Procurement (Figure 10.3)
Requirement Selection Requisition Approval
REQUEST
Requisition Source Negotiate Contract
BUY
ConfirmProcess
OrderShip Invoice
SUPPLY
Receive Deliver Match Pay
PAYMENT
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Types of e-procurement
On-line catalogs listing products, prices, etc.
Third-part auctionsreverse auctionsPrivate exchanges to connect suppliers
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Problems with e-procurement
Too much focus on technology; not enough on
systems
Insufficient concern about value to both
partners
Fragmented efforts within and across
companies
Record accuracy and data security issues
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Virtual Supply Chains
Virtual Companies:
Highly flexibleno fixed assets
Successful in highly dynamic environment
Made feasible by computers and the Internet
May lead to hollow corporations or shell
companies
Virtual Supply Chain consists of at least onevirtual company that coordinates all activities
of the supply chain
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Summary
Definitions and Terminology
System Interactions
Coordination in Supply Chain
Measuring Supply Chain PerformanceSupply Chain Strategies
Structural Improvement
Improvement in Infrastructure
The Internet and Supply Chains
Virtual Supply Chains
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End of Chapter Ten