Intro to Supply Chain Management Ch 1
SCOR model: make
- also known as manufacturing, the series of operations performed to convert materials into a finished product - finished product is manufactured, tested, packaged, and scheduled for delivery - quality management is an important aspect of the manufacturing process - this is the most metric-intensive portion of the supply chain, where companies are able to measure quality levels, production output, and worker productivity
SCOR model: return
- also known as reverse logistics, the part of supply chain management that deals with 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 - as this process quite literally goes against the normal outbound of flow of products to the market, supply chain managers have to create a responsive and flexible network for receiving defectives and excess products back from their customers, and also supporting customers who have questions and problems
SCOR model: deliver
- also known as the logistics phase, this is the part of supply chain management that oversees the planning and execution of the forward flow of goods and related information between various points in the supply chain to meet customer requirements - where companies coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to transport products to customers, and set up an invoicing system to receive payments, among other aspects
SCOR model: enable
- an additional aspect of the model is referred to an 'enable' - enabling processes facilitate a company's ability to manage the supply chain and are spread throughout every stage. in other words, we want to enable our capabilities as we plan, source, make, and deliver/return - this is not a stage that occurs sequentially after all of the others - enabling processes include elements such as: supply chain management and network operations, systems configuration control, interfaces, gateways, database administration, electronic data interchange (EDI), telecommunications services, performance management, contract management, business rules, standards, training and education
SCOR model: plan
- establishes the parameters within the supply chain will operate - companies need a strategy for managing all of the resources necessary to address how a product or service will be created and delivered to meet the needs of customers - includes the determination of marketing and distribution channels, promotions, quantities, timing, inventory, and replenishment policies, and production policies
operations management elements
- forecasting & demand planning - planning systems - process management
goal of supply chain management
- increase customer service while simultaneously reducing both inventory investment and operating expenses (costs)
improving supply chain capabilities
- increased use of third-party logistics (3PLs) service providers - integrating logistics internally and with external trading partners - using transportation to facilitate rapid response
supply management elements
- purchasing - supplier management - strategic partnerships - ethics and sustainability
suppliers
- raw material suppliers (tier 3) - intermediate suppliers (tier 2) - finished material suppliers (tier 1)
a supply chain consists of the flow of materials and products from:
- raw materials, intermediate suppliers, and finished material suppliers to - finished product manufacturers to - wholesalers, distributers, resalers, and/or consumers
supply chain models for service products operate differently from those of physical products
- service products cannot generally be produced in advanced or inventoried, and frequently the customer of a service provides the tangible item that will receive the service - customers play a vital and more involved role in the delivery aspect of the service supply chain than they do in the supply chain for a physical/tangible product - consequently, the service supply chain is much more about managing the relationships between the trading partners than it is about managing the chain of supply
origins and evolutions of supply chain management in the 1950's and 1960's
- supply chain management goes back to the 1950s when the discipline was limited to materials management and logistics - US manufacturers maintained large material inventories to keep production running. the entire focus was on how to produce as much product as possible at the lowest possible cost - manufacturers were internally focused on maximizing their own internal operations - the focus on mass production techniques at their principal cost reduction and productivity improvement strategies - external collaboration and partnerships were virtually nonexistent
SCOR model: source
- the process of identifying the suppliers that provide the materials and services needed for the supply chain to deliver the finished products desired by the customers - this phase involves not only identifying reliable suppliers but also building a strong relationship with those suppliers - supply chain managers must also develop pricing, shipping, delivery, and payment processes with suppliers and create metrics for monitoring and improving the performance
logistics management elements
- transportation management - customer relationship management network design
customers
- wholesaler and distributer customers (tier 1) - retail costumers (tier 2) - consumers (tier 1)
the flow of supply chain management
1. starts with understanding the flow 2. integrates all partners within end-to-end supply chain 3. is conducted thru defined processes
what is a supply chain?
Any organization offering a product or a service has a supply chain
old paradigm (future of supply chain management)
a company gained synergy as a vertically integrated firm encompassing the ownership and coordination of several supply chain activities - organizational cultures emphasized short-term, company focused performance
new paradigm (future of supply chain management)
a company in a supply chain focuses activities in it's area of specialization and enters into voluntary and trust based relationships with supplier and customer firms "outsourcing non-core competencies" - all participants in the supply chain benefit - boundaries are dynamic and extend from "the firms suppliers' suppliers to its customer's customers; end-to-end - supply chains also deal with reverse logistics to handle product returns, warranty repairs, and recycling
total quality management
a management approach to long-term success through customer satisfaction based on the participation of all members of an organization in improving processes, goods, service, and the culture in which they work. everyone in the organization has to take ownership for quality
material requirements planning (MRP)
a method of determining what materials are needed and when they are needed to support the production plan
just-in-time
a philosophy of manufacturing based on the planned elimination of all waste and continuous productivity improvement
business process reengineering
a procedure that involves the fundamental rethinking and radical design of business processes to achieve dramatic organizational improvements in such critical measures of performances as cost, quality, service, and speed
two main reasons companies implement supply chain management are to
achieve cost savings and better coordinate resources
pros and cons of 1950s and 1960s internally focused on maximizing their own internal operations
advantages: - higher output and more productivity - reduced cycle times - lower in-process inventories drawbacks: - high investment in facilities - overall cycle time limited by the slowest operation breakdown of one machine will stop an entire production line
companies will also continue to focus on
building relationships, sustainability, corporate social responsibility (CSR), improving supply chain capabilities
chart slide 36 and 43
chart slide 36 and 43
today and beyond origins and evolution of supply chain management
companies are focusing on their own core competencies, outsourcing those things are not their core competencies, using the expertise of their trading partners
network design (logistics management elements)
creating distribution networks based on tradeoff decisions between cost & sophistication of distribution system
manufacturing resource planning (MRP II)
helps to improve internal communication and operations - manufacturers extended their processes to include their own finance, marketing, sales, research and development, etc. functions to bring all their expertise into process
supplier management (supply management elements)
improve performance through - supplier evaluation (determining supplier capabilities) - supplier certification (third party or internal certification to assure product quality and service requirements)
origins and evolutions of supply chain management in the 1980's and 1990's and 2000's
instead of focusing only internally, companies started to look beyond their "four walls" and incorporate their supply chain partners into their planning activities
origins and evolutions of supply chain management in the 1960's and 1970's
introduction of new computer technologies led to development of: - materials requirements planning (MRP) - manufacturing resource planning (MRPII)
while the service itself is not tangible (not physical/touchable)...
it likely involves use of, or work on , a tangible item
wha do we know about a chain?
its only as good as its weakest link
what customers are actually paying for in the service industry is the
labor and the intellectual property of the service provider
supply chains exist in organizations that are
large or small, public or private, for-profit or not-for-profit
planning systems (operations management elements)
linking supply to demand via MRP and ERP systems
logistics vs supply chain management
logistics - refers to the activities that occur within the purview of a single organization - traditional logistics focuses on activities such as inventory management, warehousing, distribution, and transportation supply chain management - refers to a network of independent companies that work together and coordinate their actions to deliver a product or service to market for the benefit of all companies in the network - scm acknowledges all of traditional logistics activities and also includes aspects of activities such as marketing, new product development, finance, and customer service
integration (foundation of supply chain management)
managing all of the enabling systems necessary to facilitate the complete integration of the operations, supply, and logistics functions outlined above - enabling systems - supply chain risk and security management - performance management - project management
logistics management (foundation of supply chain management)
managing all of the movement and storage of products and materials within the supply chain , whether the flow is forward or reverse - warehousing and distribution, - transportation, - international trade management, - customer relationship management, - service response logistics
supply management (foundation of supply chain management)
managing all of the supplies and suppliers that are needed to run the business - purchasing management - strategic management - supplier relationship management
operations management (foundation of supply chain management)
managing internal resources - forecasting and demand planning - planning systems - inventory management - process management
in simple terms, supply chain management is
managing the steps involved in the production of a product but it is also the coordination of a network of otherwise independent organizations. - the execution process of any business - delivers value by managing the processes of all of those independent trading partners - so that they collaborate with one another in an efficient, effective, and cost conscious way
forecasting & demand planning (operations management elements)
match demand to available capacity
products and services are crated from
materials, equipment, labor, time, money, and other resources
the foundations of supply chain management
operations management, supply management, logistics management, integration
logistics
part of supply chain management that plans, implements, and controls the flow and storage of goods, from point of origin to point of consumption - warehousing and transportation (what links the supply chain)
all supply chains follow the basic model:
plan, source, make, deliver all enable
ethics and sustainability (supply management elements)
recognizing suppliers impact on reputation and carbon footprint
purchasing (supply management elements)
responsibility for procuring materials, supplies, and services
review slides 10-24
review slides 10-24
supply chain management in the service industry
service firms offer intangible products, meaning products that cannot be physically touched
a supply chain can be
simple or complex
slide 55
slide 55
customer relationship management (logistics management elements)
strategies to ensure deliveries, resolve complaints, improve communications & determine service requirements
strategic partnerships (supply management elements)
successful and trusting relationships with top performing suppliers
producing and delivering products and services require
suppliers, manufacturers, and customers
intense global competition led US manufacturers to adopt:
supply chain management (SCM) - in the early 1980's, the term supply chain management was coined by dr. wolfgang partsch and his team at booz, allen & hamilton
end-to-end supply chain management (SCOR model)
supply chains are generally described as spanning from end-to-end, from your suppliers-suppliers on one end, through your internal operations, and out to your customers-customers on the other end
transportation management (logistics management elements)
tradeoff decisions between cost & timing of delivery / customer service via trucks, rail, air, pipeline & water
process management (operations management elements)
using LEAN manufacturing to improve the flow of materials to reduce inventory levels, and using six sigma to improve quality compliance across all suppliers (internal and external)
most supply chains are enabled through:
various types of processes and technologies
nodes or links in the supply chain are connected by
warehousing (storage activities) and transportation (movement activities) - these are referred to as logistics