SCM301: Supply Chain Process Integration

5. Assess and Improve Internal Integration of Key SC Processes

-Formation of cross-functional terms -Management of support and resources -ERP systems -Develop an understanding of internal supply chain

Managing Supply Chain Risk

-Increase safety stock, stockpiling and forward buying. -Identify backup suppliers and logistics services -Diversify the supply base -Utilize a supply chain IT system -Develop a formal risk management system.

3. Align SC Strategies

-8 key SC processes 1. Customer relationship management 2. Customer service management 3. Demand management 4. Order fulfillment 5. Manufacturing flow management 6. Supplier relationship management 7. Product development and commercialization 8. Returns Management

3. Demand Management

-Balancing customer demand with the firm's output capacity -Forecasting demand and coordinating with producing, purchasing, distribution. -Increase the accuracy of forecasts -To track the success of various demand management activity implementations.

7. Assess and Improve External Process Integration and Performance

-Build, maintain, strengthen relationships -Share knowledgeable management solutions, such as forecast information, new products, expansion plans -Knowledgable management solutions enable real-time collaboration and flow of information between supply chain partners

5. Manufacturing Flow Management

-Determining the manufacturing process requirements to enable the right mix of flexibility and velocity to satisfy changing the demand. -Making the actual product, translation of requirements into capabilities and supplier requirements (MRP) -A good set of performance metrics to track the capability of the manufacturing flow process to satisfy demand.

Supply Chain Strategy: Competitive Weapon

-Firm can compete IF they can Understand the end customer. Leverage partner requirements and trade-offs. Adjust SC member capabilities (capitalize)

What is Process Integration

-Firms in supply chain must integrate processes to create value for the services and products provided to end customers. -Sharing information (not data) and coordinating resources to jointly manage a process. -The benefits of collaboration and information sharing between trading partners can be significant

8. Extend Process Integration to 2nd tier SC Partners

-Integrate process to 2nd tier partners and beyond. -Radio frequency identification (RFID) tags relays products location as it moves through the supply chain. -Passive RFID don't contain internal power. -Active RFID use battery power and are very expensive

8. Returns Management

-Managing used product disposition, product recalls, and packaging requirements -Environmental compliance with substance disposal and recycling -Collecting returns data and feedback. -Minimizing future returns

4. Order Fulfillment

-Meeting customer requirements by synchronizing the firm's marketing, production and distribution plans. -Location of suppliers, production facilities, and distribution centers -Modes of inbound and outbound transportation used. -System used for entering, processing, communicating, picking, delivering and documenting customer orders.

6. Develop SC Performance Measures for Key Processes

-Monitor links with trading partners in key SCM processes -Trading partners should monitor measures across member firms for each of SC processes

The Silo Mentality

-Obstacles to SC Integration - "I win, you lose" -Using cheapest suppliers, ignoring customers, assigning few resources to new product/service design. -"do what is best for ME". -Solutions: align SC goals with firm goals and incentives, performance review of managers must include ability to integrate processes internally and externally.

Lack of Supply Chain Visibility

-Obstacles to SC Integration -In recent survey, 1/3 pharmaceutical manufacturers provided adequate information visibility. -RFID technology has promise to add real-time information visibility to supply chains.

Lack of Knowledge

-Obstacles to SC Integration -Technology changes so quickly enabling process integration across extended supply chains. -Firms must spend significant time influencing and increasing the capabilities of themselves and their partners. -Training of supply chain partner employees is also know as collaborative education, can result in more successful supply chains.

2. Review and Establish SC Strategies for

-Parts purchased and suppliers -Manufacturing processes -Design of the products manufactured -Mode of transportation -Warranty and return services -Outsourcing -Sustainability

4. Develop Internal Performance Measures for Key Processes

-Performance should be measured continuously -Create a consistent emphasis on the overall supply chain strategy -Firm is able to track progress in each key processes

2. Customer Service Management

-Policies supporting coordination channels and executing response to requests. -Communicating delivery information to customers such as product availability, shipping dates, and order status. -Administering product and service agreements -Monitoring and reporting customer service performance

Managing Supply Chain Security

-Reducing the risk of intentionally created disruptions in supply chain operations. -A supply chain is only as secure as its weakest link. -Security management collaboration should include contractual requirements for secure systems.

Adjusting SC Member Capabilities

-SC members audit their capabilities -Firms and partners must continually reassess performance with respect to requirements -The best SC performers: are more responsive to customer needs, quicker to anticipate changes in markets, control cost much better.

6. Supplier Relationship Management

-Screening and selecting the suppliers -Developing close working relationships with key suppliers. -Negotiating product and service agreements -Managing suppliers -Monitoring supplier performance and improvement

7. Product Development and Commercialization

-Selecting new product ideas -Developing new products and getting them to market quickly and effectively -Assessing the success of each new product. -Developing customer feedback mechanisms

1. Identify Critical SC Trading Partners

-Strategies -Sell and deliver products to final customers -Identify primary trading partners allows the firm to concentrate on managing links with these companies

1. Customer Relationship Management

-Structure supporting information sharing often through software. -Tailoring product and service agreements to meet customer needs: design, quality, cost, etc. -Measuring customer profitability and firm's impact on customers. -Monitor the impact of customer relationship management (CRM) efforts in terms of both the financial impact and customer satisfaction.

9. Reevaluate the Integration Model Annually

-Trading partners should revisit the integration model annually for changes within supply chains -Ex: New suppliers entering market, foreign market opening -Assess the impact of changes on integration efforts

Introduction

-Ultimate goal of supply chain management is to create value for end customers and firms in the supply chain. -Must keep customers happy to make a profit. -Firms must integrate processes internally and externally. -Process integration requires effort: training, willing and competent partners, trust, organizational culture change

Supply Chain Integration Model Activities

1. Identify Critical SC Trading Partners 2. Review and Establish SC Development Strategies 3. Align SC Strategies with Key SC Process Objectives 4. Develop Internal Performance Measures for Key Processes 5. Assess and Improve Internal Integration of Key SC Processes 6. Develop SC Performance Measures for Key Processes 7. Assess and Improve External Process Integration Performance 8. Extent Process Integration to 2nd tier SC Partners 9. Reevaluate the Integration Model Annually

Lack of Trust

Obstacles to SC Integration -Successful process integration requires trust. -Trust occurs over time-partners earn trust. -Collaboration and trust are based on: start small, look inward, meet face-to-face, go for they win-win, do not give away the store: some information should proprietary, just do it. -Too much variability

Key Supply Chain Competencies

Understanding end customers: need to look at each market segment and determine the needs of those customers. -Variety of products required. -Quantity and delivery frequency needed -Service level dressed -Product quality desired -Price of products -Cost -Quality -Quantity -Service