Chapter 1
1990s-2000s: two features
--- JIT: JUST-IN-TIME is a philosophy of manufacturing based on the planned elimination of all waste and continuous productivity improvement 资源效率 ---TQM total quality management: customer satisfaction's 个人责任制度
1990s-2000s 3 features
----Business Process Reengineering (BPR）：is a procedure that involves the fundamental rethinking and radical redesign of business process to achieve dramatic organizational improvement. ----Collaborative Planning, Forecasting and Replenishment (CPFR) ---- Sales and Operations Planning (S&OP)
the foundations of scm
-Supply management -Operations management -Logistics management -Integration
integration elements
-enabling system -supply chain risk and security management -performance management -project management
Operational Management elements
-forecasting & demand planning -planning systems -inventory management -process management (lean manufacturing&6 sigma) internal&external
1950s-1960s Supply chain management goes back to the 1950's when the discipline was limited to Materials Management and Logistics.
-large inventories -goal: produce quickly & lower cost -Manufacturers were: internally Focused on maximizing their own operations - focus: mass production tech -principal: cost reduction & productivity up
1970s-1980s external collaboration
-production planning: process to determine to overall level of output to meet company's profitability objectives. -material requirements planning: what material needed when they needed -manufacturing resource planning : method that is planning of all resources of a company
Supply Management
-purchasing -strategic sourcing -supplier relationship management
logistics management
-warehousing -distribution -transportation -international trade management -customer relationship management -service response logistics
SCM is based on 2 ideas
1, every product that reaches an end user represents the cumulative effort of multiple organizations. ( These organizations are collectively known as the supply chain) 2, most organizations have only paid attention to what was happening within their own four walls. ( few businesses understood and managed the entire chain of activities the ultimately delivered products to the final customer-- the result was disjointed and ineffective supply chains)
the goal of SCM simultaneously
1, increase customer service 2 reducing inventory and operating expenses
all supply chain links are interconnected and disruption with one will likely impact all
A supply chain is only as strong as its weakest link
where is supply chain
Any organization, Anywhere in the world, Offering a Product or a Service, has a supply chain
Supply chain Management facilitates the process PLAN,SOURCE,MAKE,DELIVER
EACH trading partner(suppliers, manufacturer, customers) has to do their part of the supply in order to satisfy the underlying demand for the product or service
2 Basic Supply Chain Capability Models
Efficient and Responsive
Focusing on core competencies, outsourcing those things are not core competencies, using the expertise of trading partners, and strengthen-ing those relationships are the key components of a successful supply chain.
First, they can focus on what they do well and use their resources more efficiently. Second, companies can develop these partnerships and use their partners' expertise potentially to improve their own product.
A responsive supply chain model is designed to respond quickly to market demand with minimal stock-outs.
Innovative products are newly developed products with high margins, volatile demand, short product lifecycles, and relatively less competition than functional products.
1970-1980
Introduction of new computer technologies lead to development of newer and better planning techniques.
1990s-2000s
Introduction of new concepts, methodologies, and processes to enhance planning and control of the supply chain
The terms Logistics and Supply Chain Management are often confused or used synonymously.
Logistics: is just one (albeit vital) component of Supply Chain Management
Pull Business Model 1，Sell Products to Customers 2，Receive Customer Orders 3，CreateSupplyPlan 4，Buy the Necessary Materials 5，ManufactureProducts 6，Deliver Products to Customers
Make-to-Order: Producing finished products in response to actual demand, i.e., only after an actual customer order is received.
§Old paradigm - Company's gained synergy through vertical integration encompassing the ownership and coordination of all supply chain activities. -Emphasis was on short-term, company focused performance.
New paradigm - Company's are focusing on their area of specialization and entering into voluntary, trust-based relationships, with their suppliers and customers by outsourcing non-core competencies
suppliers, manufacturers and customers have the same process ----SCOR MODEL supply chain operations research model
Plan --- Source ---Make---Deliver(return)
5 basic components of a supply chain management SCM system
Plan, Source, Make, Deliver and Return, enable
all supply chain links are interconnected and disruption with one will likely impact all == a supply chain is only as strong as its weakest link -- the disruption impacts all suppliers
TOTAL MARKET STOCKOUT then, the disruption impacts all customers
The principle mission of supply chain management is to ensure that demand is met.
The goals are to improve customer service while simultaneously reducing both inventory investment and operating expenses.
responsive model §Need flexible capacity (volume) §Minimize lead time §Inventory of parts §Minimal stock outs ----ideal for innovative products
The supply chain is configured to be fast and flexible to respond quickly to dynamic market demand and new product launches. Characterized by:
-----efficient model §Predictable supply §Highly utilized capacity §Low cost production §High inventory turns ----ideal for functional products
The supply chain is configured to produce a large volume of product, as quickly as possible, and at the lowest possible cost. Characterized by:
The __pace of change___in the supply chain continues to
accelerate, and it's only going to get faster.
Supply Chain Management represents the active management of supply chain activities to maximize customer value and
achieve a sustainable competitive advantage
As the supply chain continues to evolve, it's critical for companies to
adapt to emerging technology and strategies
a supply chain consists of the flow of materials and products FROM suppliers TO manufacturers TO customers ------Facilitated through the use of logistics
also product and service FLOW Infor FLOW PAYMENT FLOW RETURN FLOW
SCM is the Coordination of the Network of otherwise Independent Trading Partners who are creating a desired product or service,
and then moving it through the supply chain out to customers, when and where the customer wants it
it is important to identify your TIER 1 supplier and customer
because these are the partners with whom you will want to prioritize building a relationship
The ___explosion of e-commerce__in the supply chain continues to
both the B2C and B2B markets.
2010s and beyond
building their own core competitive outsourcing those things that are not their core competencies to use the expertise of their trading partners
Supply Chain Management has transformed from an often-overlooked cost center into a vital segment of operations that can be turned into a
competitive advantage
logistics is more inwardly focused on your own organization's operations,
encompassing activities specific to inventory management, warehousing (i.e., material handling and storage), distribution (i.e., order fulfillment, pick, pack and ship), and transportation (i.e., the movement of inventories into and out of an organization).
suppliers' suppliers & customers' customers
every company in supply chain is both a customer of their supplier and a supplier of their customers.
supply chain could be simple or complex
exist in organizations: large--small, public--private, profit--not profit
1950s-1960s
external collaboration and partnerships were virtually nonexistent
Enable process P-S-M-D(R) are enabled through various types of processes and technologies/
facilitate a company's ability to manage the supply chain and are spread throughout every stage.
many services require the use of facilitating goods which are tangible elements that are used along with the service provided.
facilitating goods耗材 need to be purchased, transported, received, and warehoused in order to provide the services
Make(or manufacturing) is the series of operations performed to convert materials into a finished product
finished product is after manufactured, tested, packaged, and scheduled for delivery. -- after quality management -- make is the most metric-intensive portion of supply chain, where companies are able to measure quality levels, production output, and worker productivity.
Deliver (Logistics)
forward and reverse flow of goods
There are two different supply chain capability models. In order to determine which model is best suited for your organization, you first need to understand what type of product(s) you are producing:
functional or innovative.
some suppliers and customers can be both tier 1 and tier 2
important is identify your Tier 1 suppliers and customers because these are the partners with whom you will want to prioritize building a relationship
service firms offer
intangible products customer pays for the labor and intellectual property of the service provider in the service industry
Planing establishes the parameters within which the supply chain will operate
its strategy for managing determination of marketing and distribution channels
facilitated through the use of logistics
logistics is not transportations transportations: inbound & outbound
Push Business Model 95% 1，Create Forecast 2，Create Supply Plan 3，Buy the Necessary Materials 4，ManufactureProducts(and hold) 5，Sell Products to Customers 6，Receive Customer Orders 7，Deliver Products to Customers
make-to-stock: Producing stock on the basis of anticipated demand. Demand forecasting can be done via a variety of sophisticated techniques.
SCM creates value by
managing the processes of all those independent trading partners so that they can collaborate with one another in an efficient, effective, and cost-conscious way.
suppliers = external sources of supply raw materials --> intermediate suppliers--> finished materials or service suppliers
manufators = finished product manufactor=insourced/&outsourced customers = distribution channels wholesaler&distributor customers --> retail -->consumers
efficiency == Functional products are low margin and have stable demand, high inventory turnover, high volume, and are readily available from multiple sources (e.g., home, school, and office supplies).
minimize cost and to maximize capacity utilization.
SCM involves
more expansive range of activities: •strategic sourcing of raw materials •procuring the best prices on goods and materials •coordinating supply chain visibility across the supply chain network, etc.
SCM is the coordination of the network of otherwise independent trading partners who are creating a desired product or service and
moving it through the supply chain out to customers when and where the customer wants it. SCM IS the execution process of any business
Supply Chain Management: refers to a
network of independent company that work together and coordinate their actions to deliver a product(s) or service(s) to the market for the benefit of all companies in the network (i.e., collaboration and coordination).
The underlying foundation of supply chain management consists of four functional, elemental areas:
operations management, supply management, logistics management, and integration.
WHAT MAKRS UP THE SUPPLY CHAIN? Products and services are created from materials, equipments, labor, time, money, and other resources
producing and delivering products and services requires---Suppliers, manufactures, and customers; ALL OF WHICH MAKE UP A SUPPLY CHAIN
return
reverse logistics goes against the normal outbound flow SUPPLY chain managers have to create a responsive and flexible network for receiving defective and excess products back from their customers, and also supporting customers who have questions and problems.
service products cannot generally be produced in advance or inventoried
services are typically produced and consumed simultaneously, and in almost every service offering, the service cannot start until the customer arrives and actively participates.
source- all you need to produce your product(pricing, shipping, delivery, and payment processes with suppliers and create metrics for monitoring and improving the performance...)
sourcing is the process of identifying the suppliers that provide the materials and services needed for the supply chain to deliver the finished product desired by the customers --build a strong relationship with suppliers
supply chain consists of
supplier, manufacturer, customer facilities through the use of logistics
supply chain management is really
the coordination of a network of independent organizations (i.e., trading partners) involved in creating a desired product or service, where the partners function together as one seamless organization.
the first step in understanding the supply chain is to visualize
the flow of materials from beginning to the end
tier 1 through N
tier 1 = direct relationship tier 2 = 中间隔一个 indirectly tier 3 = 中间隔两个 indirectly
1ST step in understanding supply chain is to
visualize the flow of materials from beginning to end 2ndsuppliers -> 1st suppliers -> manufacturers -> 1st customers ->2nd customers
customers are also much more directly involved in the delivery of services than supply of a physical product
while the service itself is not tangible, it frequently involves work on a tangible item provided by customer.
2021s-beyond Companies will also continue to focus on:
§Building strategic partnerships §Corporate Social Responsibility (CSR) §Supply chain sustainability §Risk and opportunity management Accelerated pace of change driven by the explosion of e-commerce
The supply chain is more volatility and complex than ever before
§Consumers are increasingly price sensitive and less brand-loyal. Companies will need to be more flexible and responsive to customer needs, necessitating closer integration and collaboration.
benefit of SCM value of both internal&external customers
§Improved customer service §Increased revenue §Lower costs §Better asset utilization §Adds customer value / retain customers §Minimize delays / shorter lead-times §Elimination of rush (unplanned) activities §Reduced uncertainty throughout the supply chain §Lower inventory levels throughout the supply chain §Ability to effectively respond to disruptions and conflicts
in the service supply chain, it is much more about managing the relationships between the trading partners than it is about managing the chain of supply.
在服务供应链中，更多的是管理贸易伙伴之间的关系，而不是管理供应链。