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