Intro to Supply Chain Management- 33:799:301
How are links in Supply Chain connected and integrated?
CONNECTED by transportation and warehousing INTEGRATED through information and planning
Risk Management
Companies shifting supply chain risks upstream to their suppliers, and shipping finished products to customers immediately after production
Old Paradigm of SCM
Company gained synergy as vertically integrated firm encompassing the ownership and coordination of several supply chain activities
New Paradigm of SCM
Company in supply chain focuses activities in its' area of specialization and enters into voluntary and trust-based relationships with supplier and customer firms
Supply Chain Management
Coordination of a network of independent organizations all involved in creating a desired product or service, and moving it from suppliers out to customers, when and where they want it.
Sustainability and "Greening" the Supply Chain
Customers increasingly prefer products made and sourced in the right way; minimizing business social, economic and environmental impact on society and enhancing positive effects
What does operation excellence begin with?
Effective supply chain planning and control techniques
Planning
Establishes parameters within which supply chain will operate Includes: 1) Determination of marketing and distribution channels 2) Promotions 3) Quantities 4) Timing 5) Inventory and Replenishment Policies 6) Production Policies
True/ False: Supply Chain Management is just a synonym for Logistics.
False; it's not
True/ False: Supply Chain Management is the steps necessary to produce a product.
False; it's not
Demanding Volatility and Forecast Inaccuracy
Firms increasingly need to be more flexible and responsive customer needs, adapting to unexpected changes and circumstances
Service Firms
Firms that offer intangible products (products which can't be touched) Involves work on tangible items
Who Benefits the most from Supply Chain Management?
Firms with: a) Large Inventories b) Large Number of Suppliers c) Complex Products and/or Large Number of Products d) Large Purchasing Budgets/ Expenditures
Globalization
International, mature and emerging markets become part of overall business growth strategy for companies
Supply Chain Basic Model Involves...?
Plan --> Source --> Make --> Deliver --> <--Return *Enabled through various types of processes and technologies
What is the role of Logistics in Supply Chain Management?
Planning, implementing, and controlling the flow and storage of goods, from point of origin to point of consumption
True/ False: Supply Chain Management is not just a chain of business.
True
True/ False: Supply Chain Management is not just a new name for Purchasing or for Production Operations.
True
Benefits of SCM
a) Improved Customer Service b) Increased Revenue c) Lower Costs d) Better Asset Utilization e) Adds Customer Value/ Retain Customers f) Minimize Delays/ Shorter Lead-Times g) Elimination of Rush Activities h) Reduced Uncertainty throughout Supply Chain i) Lower Inventory Levels throughout the Supply Chain j) Ability to Effectively Respond to Disruptions and Conflicts
Integration Element: Supply Chain Process Integration
a) supply chain participants work for common goals b) requires intra-firm functional integration c) based on efforts to change attitudes and adversarial relationships
Logistics Element: Network Design
creating distribution networks based on tradeoff decisions b/t cost & sophistication of distribution system
Supply Chain Management (part 2)
delivers value by managing process of all of those otherwise independent trading partners so they collaborate with one another in efficient, effective, and cost conscious way
Enabling
facilitate company's ability to manage the supply chain and are spread throughout every stage Includes: 1) Supply Chain System and Network Operations 2) Systems Configuration Control 3) Interfaces 4) Gateways 5) Database Administration
Manufacturing Resource Planning
helps to improve internal communication and operations
Operation Element: Planning Systems
linking supply to demand via MRP and ERP systems
Total Quality Management
management approach to long-term success through customer satisfaction based on the participation of all members of an organization in improving processes, goods, services, and the culture in which they work; everyone take ownership for quality
Operation Element: Forecasting & Demand Planning
match demand to available capacity
Materials Requirement Planning
method of determining what materials are needed and when they are needed to support the production plan
Delivering (Logistics)
oversees planning and execution of the forward flow of goods and related information between various points in the supply chain to meet customer requirements Companies: 1) Coordinate receipt of orders from customers 2) Develop network of warehouses 3) Pick carriers to transport products to customers 4) Set up invoicing system to receive payments
Just-in-Time
philosophy of manufacturing based on the planned elimination of all waste and continuous productivity improvement
Returning (Reverse Logistics)
planning and controlling the process of moving goods specifically from the point of consumption back to the point of origin for repair, reclamation, remanufacture, recycling, or disposal
Business Process Reengineering
procedure that involves the fundamental rethinking and radical redesign of business processes to achieve dramatic organizational improvements in such critical measures of performance as cost, quality, service and speed
Sourcing
process of identifying the suppliers that provide the materials and services needed for the supply chain to deliver the finished product(s) desired by customer(s); identify suppliers and building strong relationships with them Develop with supplier: 1) Pricing 2) Shipping 3) Delivery 4) Payment Processes Create metrics for monitoring and improving the performance
Supply Element: Ethics and Sustainability
recognizing suppliers' impact on reputation and carbon footprint
Supply Chain Management (how it differs from logistics)
refers to network of independent companies that work together and coordinate actions to deliver a product(s) or service(s) to market for the benefit of all companies in the network
Supply Element: Purchasing
responsibility for producing materials, supplies, and services
Making (Manufacturing)
series of operations performed to convert materials into a finished product Finished product is manufactured, tested, packaged, and scheduled for delivery Companies measure (metric intensive): 1) Quality Levels 2) Production Output 3) Worker Productivity
Logistics Element: Customer Relationship Management
strategies to ensure deliveries, resolve complaints, improve communications, & determine service requirements
Supply Element: Strategic Partnerships
successful and trusting relationships w/ top-performing suppliers
Logistics Element: Transportation Management
tradeoff decisions b/t cost & timing of delivery / customer service
Operation Element: Process Management
using LEAN manufacturing to improve the flow of materials to reduce inventory levels, and using 6 Sigma to improve quality compliance across all suppliers
Intermodal
using a combination of any of the other modes of transportation for a single shipment
Supply Element: Supplier Management
Improve performance through: a) Supplier Evaluation b) Supplier Certification
Flow of Supply Chain Management
1) Understanding the flow 2) Integrates all partners within the end-to-end supply chain 3) Is conducted thru defined processes
Why Do Firms Implement Supply Chain Management?
1) Achieve Cost Savings 2) Better Coordinate Resources
Today, companies focus on what?
1) Core Competencies 2) Building Relationships 3) Sustainability 4) Corporate Social Responsibility 5) Improving Supply Chain Capabilities
Basic Supply Chain Capability Models
1) Efficient- Supply chain and processes are designed to minimize cost 2) Responsive- Supply chain designed to respond quickly to market demand
Goals of Supply Chain
1) Increase Customer Service 2) Reducing both: a) Inventory Investment b) Operating Expenses
Integration Elements (x2)
1) Supply Chain Risk Assessment and Mitigation 2) Supply Chain Performance Management
Warehousing and Distribution
Facilities that allow companies to store materials and finished products AND Receive, breakdown, repackage, and ship materials out to a manufacturing location or to a customer
What are Customers Paying for in the Service Industry?
Labor and intellectual property of service provider
Operations Management
Managing Internal Resources
Integration
Managing all of the enabling systems necessary to facilitate the complete integration of the operations, supply, and logistics functions outlined above
Logistics Management
Managing all of the movement and storage of products and materials within the supply chain, whether the flow is forward or reverse
Supply Management
Managing all of the supplies and suppliers that are needed to run the business
What is the Service Supply Chain more focused on?
Managing relationships b/t the trading partners (customer service)
Pull or Make-to-Order
Producing stock in response to actual demand
Push or Make-to-Stock
Producing stock on basis of anticipated demand
Flow of Products for Supply Chain:
Raw Materials --> Intermediate Suppliers --> Finished Product Manufacturers --> Wholesalers and Distributors --> Retailers and Consumers
Supply Chain Cost Optimization
Reducing purchasing costs, waste, excess inventory, non-value added activities; improving demand planning; increased out-sourcing of non-core competencies
Logistics
Refers to activities that occur within purview of single organization
What is Supply Chain Management ultimately?
The way business gets done.
5 Modes of Transportation
Truck, Rail, Air, Pipeline, Water