introduction to the sscm module - organization relatori

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Supply Chain ManagementProf. Roberto Pinto

RELATORIProf. Roberto Pinto

Supply and Service Chain Management

Introduction to theSSCM module - Organization

Supply Chain ManagementProf. Roberto Pinto 2

Organization

Supply and Service Chain Management (module of an Integrated course)o 37042-ENG Corso integrato di Gestione delle operations e Supply and

Service Chain Managemento 37154-ENG Operations Management and Supply and Service Chain

Managemento 37158-ENG Supply and Service Chain Management

Structure: 2 partso Supply chain management – Prof. R. Pinto (from 24/02 to 21/04)

o Service management – Prof. G. Pezzotta (from 27/04)

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Study material

Slides avaialable on Moodle https://elearning15.unibg.it/


Organization

Examo Written: True/False questions, open questions, exerciseso 2 partial exams (to be confirmed):

o 20 or 21/04/2020 on the Supply chain parto 26/05/2020 on the Service part

o All students enrolled in 2019/2020 course are allowed to take the first partial

o Only student who get a mark higher than 18 at the first partial are allowed to take the second partial. The other must take the complete exam see exam calendar

o The complete exam is about both the supply chain and the service parts

https://elearning15.unibg.it/

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Organization

Examo The final mark of the SSCM module is given by:

o The average of the two partial exams (if both are > 18)o The average of the Supply chain and Service parts (in a complete exam)

o The final mark of the INTEGRATED COURSE is given by the average of the marks:o In the SSCM moduleo In the Operations management module


RELATORIProf. Roberto Pinto

Supply and Service Chain Management

Introduction toSupply Chain Management

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What is a supply chain?

Distributor /Warehouse

Store

Manufacturer

Subcontractor

Supplier

Supplier

Manufacturer

Supplier

Supplier

Customer



A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request for a product or a service

Many actors are involved:

o Manufacturers

o Suppliers

o Wholesalers / Distributors / Retailers

o Transporters/3PL

o Subcontractors

o Customers

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Source: washingtonpost.com



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Source: seattletimes.nwsource.com



sourcing the best

materials from the best

manufacturers around

the world

Source: seattletimes.nwsource.com


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Source: iter.org




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Source: www.supplychain247.com

https://youtu.be/7UxRAhTJ1CM



Earlier this year, a factory explosion at an Evonik Industries plant in Germany dramatically reduced the amount of nylon supply available to its customers, one of those customers being A. Schulman. This could have led to a supply chain disaster, had it not been for a risk-management best practice Schulman and other plastics manufacturers follow: shifting to alternate materials and in some cases, alternate formulations.

Source: www.ihs.com - www.industryweek.com


http://www.ihs.com/

http://www.industryweek.com/

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…Apple has already begun flexing its supply chain muscles by shipping so many units of upcoming devices from its manufacturing facilities to sales outlets that it is causing delays for other manufacturers.

…The company is apparently flooding its channels with devices, causing shipments for other ‘top tier’ device makers to be delayed to make way for Apple products (Sept. 2014).

Source: techcrunch.com/




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A real-life example

Customer perspective: let’s go to the store and

buy one!

Adapted from: bloomberg.com

Apple announced next-gen iPhone

Apple perspective: let’s ship millions devices in

two weeks!

If everything goes ok, this process should stay hidden from public view

Sell the product and collect new orders

Organize shipping via air and road (and secure

them as well)

Move devices fromChina to final stores

Let’s buy components in advance to build new

devices

How many iPhones should be

manufactured?

Let’s bring components to the factories

This example relates only to the operations in the

supply chain

https://youtu.be/YbM_LydRlnM

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SC configuration characteristics

Number of levels

Number of facilities per level

Level of integration

Geographical extension

IT

DE

IT

FR

HU

DE

DE

Group


SC configuration characteristics

Linear

Convergent

Divergent

Supply chainlayer or echelon

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What is supply chain management (SCM)?

Supply Chain Management (SCM) is the management of supplychain assets, products, information, and fund flows to maximizethe total supply chain value

SCM deals with efficient and effective material, financial, and information flows


What is the objective of supply chain management?

The objective is to maximize the overall value generated

What is value? A simplified definition…

What the final product/ service isworth for

the customer

Costincurred by the supply

chain in filling the customer’s

request

VALUE

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Why SCM is important?

Drive and fulfill customers’ expectations: Customers expect the correct product assortment and quantity to be delivered at the right location

and the right time.

Customers expect products to be serviced quickly (i.e. after sales service)

Customers expect higher “service levels”

Reduce operating costs: Purchasing, production, warehousing, transportation, return…

Improve bottom line and cash flow

Support the business: Companies have to deliver what they promise


Supply chain flows

Distributor /Warehouse

StoreManufacturerSupplier Customer

Physical flow (goods)

Financial flow (money)

Physical return flow (returned or end-of-life goods)

Information flow

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What is supply chain management (SCM)?

SCM encompasses several processes

Internal perspective

External (interface) perspective

Focal company perspective


What is supply chain management?

Plan Source Make Deliver Service Return

Internal perspective

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Main supply chain management processes

Demand management

Supply management

Distribution network design and management

Transportation management

Inventory management

Manufacturing management

…


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Demand management

Supply management

Distribution network design and management

Transportation management

Inventory management

Manufacturing management

…

Marke

ting

Ne

w P

rod

uct D

eve

lop

me

nt

Sales

Finan

ce

…

Main supply chain management processes

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What is supply chain management?


External (interface) perspective


Plan Source Make Deliver Service Return Plan Source Make Deliver Service Return


The focal company perspective

StoreManufacturerSuppliers Customer

DELLIntelLGMicrosoft

WalMartElec. sellers

Intel DELLRaw materialPart suppliers

Focal Company

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A systemic perspective

Our goals

Our decisions

Business success

Other agents goals

Other agents decisions

Unexpectedconsequences

Unexpectedconsequences


Major trends involving SCM

Shift in global economic power• By 2030 the size of the leading emerging economies will overtake that of the current G7

group new market, new territories, new rules…

Demographic & social change• By 2025 the world’s population will be about 8 billion new customers? Less resources?

Technological breakthroughs• New products, new services, new cost structures, new SC structures…

Climate change and resource scarcity• An increase of 35% in food demand is expected by 2030

Rapid urbanization• By 2025 it is expected that there will be 37 megacities (up from 23 today)

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Other factors influencing SCM

Densification of Product

Diversification of Sales Channels

Decentralization of Production

Digitization of Products

Complexity

Cost /value

Technology

Supply chain security


Importance of inter-company coordination

SCM pursues the coordination of the SC, occurring whenall the stages of a SC work towards a common objective of maximizing the total SC value

Coordination is based on information sharing

Lack of coordination can results in significant losses

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Supply chain management key decisions

SCM encompasses three decisions phases

SCM decisions differ in:

Frequency

Time frame of impact

SCM Design (or SCM Strategy)

SCM PlanningSCM Operation

(or SCM Execution)


Supply chain management key decisions

Decision phase

Frequency Time frame of impact Example of key decisions

SC Design Very low (i.e. once every 5 years)

Long, several years • SC configuration• SC facility location and size• Insource / outsource• Process definition• Transportation available

SC Planning Medium to high (3-4 times per year)

Few months (configuration is fixed)

• Strategic forecasting• Supplier selection and mngt• Inventory and production policies• Market promotions

SC Execution Very high (daily or weekly)

Short, few days or weeks (policies are fixed)

• Order fulfillment & shipment• Inventory allocation• Inbound / outbound logistics• Expediting• Short term forecasting

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SCM vs Logistics

Logistics is that part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information

Logistics is a part of the SCM

SCM is a broader concept than logistics


SCM vs Logistics

Logistics typical activities In-bound transportation

Out-bound transportation

Storage / warehousing

Materials handling

Inventory control

Order fulfillment

(Forecasting)

(Production planning)

(Packaging)

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SCM as Risk Management

Modern supply chains are exposed to numerous kinds of events that may disrupt the course of their businesses

These events are usually:

Random (they have a probability of occurrence)

Disruptive (they have a relevant impact on the performance)

Managerial decisions always entail risks


SCM as Risk Management

Management of risk: entails decisions and actions to:

Reduce the exposure to risks

Mitigate the consequences of risks

Counterbalance the impacts

SCM is all about managing risks!

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References

Chopra, S., Meindl, P. (2010). Supply Chain Management (4th edition), Pearson

Cavalieri, S., Pinto, R. (2007), Orientare al successo la supply chain, ISEDI

www.supply-chain.org


Credits

CELS – University of Bergamo

Roberto Pinto Ph.D

Logistics and Supply Chain

http://cels.unibg.it

[email protected]

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http://cels.unibg.it/

mailto:[email protected]

introduction to the sscm module - organization relatori

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