SCM 4390 exam 1 Gordon Smith
TFC- Sales
You can only make decisions on shelf life and order deadline
What did apple design that customers must have even though they didn't need it
the iPad- more convenient, created a new market, smaller than a laptop, bigger than a cellphone
Sales
1. Customer relationship management 2. negotiating service level
NAFTA new agreement
All the countries agreed to the new agreement Mexico, U.S, Canada
Supply chain
Planning Area, safety stock
More in-depth key elements of Blockchain (by IBM)- Smart contracts
- A smart contract can define conditions for corporate bond transfers, include terms for travel insurance to be paid and much more
Responsive Supply Chain Models
- Agile - Custom Configured - Flexible
More in-depth key elements of Blockchain (by IBM)- Distributed ledger technology
- All network participants have access to the distributed ledger and its immutable record of transactions - Records are immutable (cannot be changed) - Smart contracts
Efficient Supply Chain Models
- Efficient - Fast - Continuous Flow
More in-depth key elements of Blockchain (by IBM)- Records are immutable (cannot be changed)
- No participant can change or tamper with a transaction after it's been recorded to the shared ledger
Primary and secondary goal of TFC
- Primary goal- Customer fufillment - secondary goal- Highest ROI (costs, investments, revenue)
TFC (supply chain)
- Three warehouses and overflow warehouses if needed- two stage production: mixing and bottling- Bottling lines and mixers for all products- Mts lead-time customers of 1 day (delivery next day)
Why is mattel closing factories
- Utilize more of what they are having - There business is still growing - There getting control of costs - to be more efficient and to cut back on the complexity
Why Study Supply Chain Management
-Every organization must make a product or provide a service that someone values. -Most organizations function as part of larger supply chains. -Organizations must carefully manage their operations and supply chains in order to prosper, and indeed, survive.
Alignment (TFC)
-In todays world companies suffer from misalignment - corporate strategy vs supply chain strategy - strategy vs execution - functional departments - partners in the supply chain - long term vs short term
Silos exist in the company (TFC)
-for creating barriers of communications and cooperation between companies -the sales department makes promises to customers we can't meet -Sourcing Managers negotiate low cost materials but ignores higher total cost of ownership - We don't meet customer service level promises as a result of aggressive inventory reductions by supply chain and finance -we lack flexibility and can't react to the market fast enough
3 different supply chain fails of 2019
1. ASOS- failure with technology, system accepted orders and promised delivery from stuff that was in inventory, they didn't know what they had in inventory, they didn't know they had a problem. 30 million dollar loss 2. Rent the runway- closed down there online order systems because it did not worked. Chief operating officer resigned. 3. HD supply- provide to commercial users paint supplies, lumber, dry wall- they put a new system in place that didn't work
Article 4 Optimize your supply chain to minimize risk and maximize profit- redefine the supply chain
1. Best practices begin with redefining supply cain excellence and broadening its scope. 2. optimize the entire end to end supply chain from the suppliers supplier to the four walls of the business to the customers customer
Article 4 Optimize your supply chain to minimize risk and maximize profit- More on creating a cross functional team
1. Best practices for driving shareholder value through supply chain optimization can be easily implemented in any company for concrete results. 2. The supply chain is important to for economic profit. The best practices begin with seeing the impact, 3. Having a cross functional team will help in visualizing the entire supply chain its complexity, and its impact on financial metrics. 4. This will help link supply chain decisions to company financials and create conversations with internal and external stakeholders that will lead to benefits that go far beyond cost reduction.
Why should you put the customer at the center of your supply chain?
1. Customers drive demand (Demand Value). Without that demand there is no need for your product/service. Successful company's found a way to create value for their customers. 2. Ways to Focus on the Customer:- Move from sales forecasting to demand sensing (social media monitoring, point of sale data, syndicated market research, data from everywhere) 3. Move from taking customer orders to delivering an experience (not simply customer fulfillment) 4. Move from outcome-based transactions to sustainable processes (customers now care more about where there product originates and how suppliers operate "green")
Article 5- Data analytics
1. Data analytics helps people gain as much insight as early as possible about consumer preferences, pricing, features, and what is likely to change in the digital ecosystem. Analytics is so crucial in the auto industry. 2. Analytics should be a big part of how people make decisions
TFC - Contract Index
1. Increasing the service level to customers will increase the contract index (Revenue), but adversely increase the risk of penalties of missing the target service level. 2. Decreasing the service level to customers will decrease the contract index (Revenue). Less money to be made.
TFC - SCM Role
1. Is the glue that holds the other roles together 2. Ensure that unreliable suppliers or production facilities are covered by strategically deployed safety stock 3. - Safety Stock - Lead Time
Article 5 - Data Analytics C-Suite
1. Late 2000s more CDAO or CDO (Chief Data Analytics Officer) roles created. 2. Mobile applications became popular to access basic information which helped the data analytics field so it can get into the hands of decision makers.
Article 4 Optimize your supply chain to minimize risk and maximize profit- Manage Risks
1. Long standing supply chain relationships have value, but disruption of those relationships can be devastating. A fundamental building block of supply chain excellence is risk management. There are plenty of examples of a single catastrophic supply chain event- such as trade war, tariffs, a weather event, or shipping disruption having a major negative impact on shareholder value. 2. Companies that have not yet adapted best practices have no formal, documented and implemented process to identify, prioritize and mitigate supply chain risks looking years ahead
Purpose of article 2
1. Modern companies need to be thinking about, making the customer your set up point utilizing whatever you can to gather information to help you do decide what services and products you need to provide 2. What kind of strategy you need to use for your business 3. you can do market analysis, scan data in social media and do analysis of that to figure out if that is impactful is the advertising helpful, can we sell more product
Article 4 Optimize your supply chain to minimize risk and maximize profit- Total Value Optimization
1. Promotes greater collaboration, intergration, and transparency 2. focuses on finding value drivers for cost, cash, and growth and building an action plan. 3. Pragmatic approach (step by step)
Describe the Fresh Connection Supply Chain inputs and outputs, as well as the processes involved.
1. Purchasing:- Buy components (Orange pulp, PET and 1L bottles, Vitamin C, Mango) 2. Operations- Turns raw materials (components) into finished goods for 3 different customers (6 skus) 3. Supply Chain- Stores and distributes all 6 skus to 3 different customer chains 4. Sales- Manages the sales and prices of product promised to each customer at certain satisfaction and perishable levels
Article 4 Optimize your supply chain to minimize risk and maximize profit- Create a cross functional team
1. See the impact 2. Identify cross functional team a task that will help in visualizing the whole supply chain (complexity and financial impact)
Explain these four basic Metric Dimensions:Service, Assets,Efficiency, Speed
1. Service - How completely the chain responds to every aspect of a customer's request. 2. Assets - How well the supply chain utilizes its inventory and cash. 3. Efficiency - The supply chain's ability to keep costs down. 4. Speed - How fast the supply chain executes a customer order.
What 4 factors affect the contract index
1. Service Level 2. Shelf Life 3. Payment Terms 4. Lead time
Why is Supply Chain Strategy Important?
1. Strategy is important because in order to properly serve customers (create value, fulfill needs) and improve ROI, a company must have all departments working to support the same overall business strategy.- 2. Supply Chain Strategy: Focused on how to operate in the correct manner to support other departments. 3. Focused on customer fulfillment .- Marketing: Focused on how to reach the customer in support of the overall business strategy. - Finance: Focused on how to spend money and support the supply chain strategy in order to increase ROI.
Article 4 Optimize your supply chain to minimize risk and maximize profit- Focus on the right metrics
1. Supply chain management generates a great amount of metrics but many of those metrics do not speak to how supply chain optimization impacts the company's financial performance. 2. Making that connection will allow the supply chain manager to better visualize how supply chain decisions impact the entire company
TFC - Products
1. Two Types of Packaging - 1 Liter - 0.3L PET Bottles 2. Three Flavors - Orange - Mix of Orange and Mango - Orange C Power 3. 6 TOTAL SKUS
Forecasting
1. helps you figure out demand 2. It helps you plan every step of your supply chain based on what you think that demand is going to be 3. you want to get as much current information from whatever sources to be able to take that information and use it for PLANNING
In order to be a good supplier you have to be
1. low cost 2. cost conscious 3. cost effective
1st round decisions
1. sales- what you can change- service level, order deadline 2. supply chain- you can change the safety stock level 3. operations- you can change the number of shifts, how many pallet locations (outbound warehouse), #FTE 4. purchasing- delivery window, delivery reliability
2 promises that you make in the sales world
1. service level- all three customers 2. shelf life
Article 5 - General Motors first Data and Analytics Officer (CDAO)
A. Charles Thomas
Forecasts are always wrong. Why do we continue to create them?
Although they are almost always wrong, they can still give us insight into what the market is doing, and allow the supply chain to adjust in the proper manner.
Article 4 Optimize your supply chain to minimize risk and maximize profit- More on Connecting with C-Suite
Another best practice in supply chain optimization is building relationships throughout the entire company and starting conversations with the CFO and other key executives. This Can be a challenge because some supply chain managers may feel far too removed from the executive level, but getting past that resistance and offering insight and creative solutions will help to forge key allies in supply chain optimization efforts and to better create and execute strategic supply chain initiatives that go beyond a basic cost cutting measure
Why is the fresh connection supply chain primarily push driven
Because everything is made to stock and pushed to the customers
Article 4 - Connect with the C-Suite (Chief Executives)
Build relationships throughout the entire company and start conversations with the CFO and key executives. Offering insight and solutions will help to create key allies in supply chain optimization efforts.
Article 4 - Manage Risks
Catastrophic Supply Chain Events such as weather, virus, trade wars, tariffs have negative impact on shareholder value. Companies must adapt practices of risk management otherwise they are missing out on opportunities for value creation. Great companies identify risks at the beginning of every project. They prioritize and mitigate risks looking years ahead
Article 4 Optimize your supply chain to minimize risk and maximize profit-Connecting with C-Suite
Create allies and offer insight and creative solutions
Article 5 - Data Analytics Optimization
Data analytics now is constantly incorporating artificial intelligence and machine learning and the new wave of data is deploying IoT (Internet of Things). These new ideas translates into projects such as electric vehicles and self driving autonomous vehicles.
More on Data analytic skills- Why are they important to supply chain management careers
Data analytics provide trends- pricing, forecast, demand. Utilizing SAP (ERP), Power Bi, or other tools provides information to help develop strategy and provide for the end customer while maintaining profits
What is a blockchain technology?
Defined by IBM "Blockchain is a shared, immutable ledger for recording transactions, tracking assets and building trust"
More on Article 1
Discussion was about technology and automation among SCM Professionals. Real Time Data enables increase of transparency and visibility of every step. Influence other organizations at faster pace. Business models will change as technology advances especially in logistics industry. Automation accelerates Supply Chain and human error... additionally this eliminates long manual work such as creating documents etc.
More on Article 3
Discussion was about the four elements of Supply Chain Strategy. Industry framework, unique value proposal, managerial focus, and Internal Processes. Additionally, the six generic supply chain models.
More on Article 2
Discussion was about utilizing big data such as knowing your customers and what their buying through Point of Sale and monitoring their social media. Machine Learning helps with patterns in real time.. it puts yourself in better position to shape demand. Inventory Optimization and effectively plan across DC's to help reduce stock outs and position inventory for faster delivery. Internet of Things (IoT) to help optimize routes for delivery trucks or use of robots in warehouse. Customers want ethically sourced products now.
Describe the differences between a "flexible" and an "efficient" supply chain strategy?
Flexible: High adaptability, able to reconfigure internal process to meet uncertainties in demand Efficient: Focused on cost. Attempt to get a product/service to the customer at the lowest total cost.
Article 4 - Focus on the Right Metrics
Focus on the right metrics is the next logical step. SCM generates overwhelming number of metrics but many of those metrics don't speak to how supply chain optimization impacts company financial performance.
Tracking performance over 4 basic dimensions- Speed
How fast a business executes a customer order
Tracking performance over 4 basic dimensions- Assets
How well a company utilizes its inventory and cash
The three SCM organizations
ISM Institute for Supply Management, ASCM (Association for supply chain management, CSCMP (Council of supply chain management professionals)They all redo there certifications on a 3-5 year cycle, to keep up with the changes in supply chain management
Article 4- Creating a cross functional team
Identify a cross functional team, this will help visualize the entire supply chain, it's complexity and impact on financial metrics. This will help with Supply Chain decisions to company financials and create conversations with both internal and external stakeholders that lead to benefits beyond cost reduction.
Brexit
If UK leaves the EU it no longer has trade agreements with the rest of the EU it becomes more of an island\it could affect inventory and stock of materials. Any business that has storage capabilities is booming.
More on Supply chain strategy
Important because if you don't have a strategy then you cannot operate functionally, and it must be in sync with the business' goals and objectives or you are just working against the company long term.
TFC - Sales Role
In charge of negotiating service level, shelf life, and promotional pressure
TFC - Operations Role
In charge of the production facilities and the warehouses - Manages work shifts - Manages space and FTE - Ensure production system remains flexible, costs are low, and reliability is high
Why is supply chain strategy important
In order to optimize the supply chain you will need to have data and analysis coupled with a clear cut strategy to cut costs, mitigate risks, improve customer service levels, provide new products, and generate profits and cost savings, Strategies give direction and a timeline to provide ideals, new barriers, new and unwanted expenses, and customer retention
More on supply chain management
Is concerned with the management and control of the flows of materials, information, and finances, in supply chain
Data Analytical Skills - Why are the important to supply chain management careers
It is important to understand how to navigate big data as well as organize it such that it can be communicated with the business as well as C level executives. Every employee should have general data analytics skills and knowledge to have power in all decision making from end to end.
What is data analytics doing at General motors
It is optimizing everything, people are using data and insights to work towards cultural transformation, generate new revenue streams and fuel the customer experience. One goal is to disseminate a democratized set of data so that everyone in the organization can answer analytical questions and that employees can become citizen data scientists
Article 2- Obtaining information from the customer to help you with real time information, trends, evolution (how do businesses plan) (Forecast)
It is to help you with real time information, trends, evolution (how do businesses plan) Look at past data history, forecast.
What is supply chain management (The supply chain council)
Managing supply and demand , sourcing raw materials and parts, manufacturing and assembly, warehousing and inventory tracking, order entry, and order management, distribution across all channels, and delivery to the customer
Supplier locations in TFC
Miami, France, Spain, Netherlands (factory), China
Retailers are expecting what type of delivery
On time and in Full OTIF 1. OTIF should be the ideal mechanism to align the objectives of retailers and manufacturers. 2. OTIF measures the extent to which shipments are delivered to their destination according to both the quantity and schedule specified on the order
TFC- Orange juice is MTO or MTS
Orange juice is MTS made to stock not made to order
TFC is a _______ model. Since you're MAKING TO STOCK and PUSHING OUT THE PRODUCTS. (NO orders from customers)
Push
Article 4 - Redefine the Supply Chain
Rather than seeing the supply chain as having a primary focus on procurement and logistics, it is about optimizing the entire supply chain. From Supplier to Supplier and Customer to Customer
TFC - Purchasing Role
Responsible for purchasing the components - Negotiate terms of supply and price with suppliers - Can terminate or create new contracts - Choose reliable, low price, and low stock suppliers
Purchasing
Supplier relationship management activities around that delivery window, delivery reliability
TFC (experience)
TFC (experience) - SCM is not only the responsibility of of one function or manager it is teamwork - Coordinated decision making is critical - A strategy is necessary to have a common directionhow to translate strategy into action - the quality of the supply chain has a big impact on the company profitability - the right management information is very importantinternal and external collaboration is key to success
Article 4 Optimize your supply chain to minimize risk and maximize profit- More on Total Value Optimization
TVO framework promotes greater collaboration, integration and transparency. The framework focuses on finding value drivers for cost, cash, and growth, and building an action plan to achieve those drivers by leveraging the end- to- end supply chain, implementing supply chain excellence and building on long term risk management. This framework represents a pragmatic step-by-step approach to transforming the supply chain into a competitive weapon
What is supply chain management (Institute of supply chain management)
The design and management of seamless value added processes across international boundaries to meet the real needs of the end customer
Supply Chain Management
The management of network of manufacturers, service providers, and suppliers that work together to create products or services needed by end users. These manufacturers, suppliers, and service providers are linked together through physical flows, information flows, and monetary (cash) flows.
More on Supply Chain Management
The management of upstream, midstream, and downstream value-added flows of materials, cash , and information among suppliers, manufacturers, service providers, and final consumers (customers)
A supply chain achieves
The right product + the right price + the right store + the right quantity + the right customer + the right time= higher profits But subsequently we must fufill the customers requirements
TFC - Customers
There are three customers - Grocery Store (HEB) - Discount Retailer Land Market (Aldi) - Gas Station (Valero) ONLY SELLS 0.3L PET Bottles
TFC (market)
Three customers 1. Retailers food and groceries (think HEB)-500 stores - supply chain leader 2. Retailer land market (think Aldi)- 300 stores, discounter 3. Chain of gas stations Domincks (Valero) - 50 stores- only PET bottles
TFC- Why would you keep safety stock in the inbound warehouse
To prevent stockouts, to prevent downtime, if anything happened in regards to fluctuations in demand. It acts as a buffer.
TFC- Why would you hold safety stock in the outbound warehouse
To prevent yourself from going out of stock because of demand fluctuations.
Article 4 - Total Value Optimization
Total Value Optimization framework promotes collaboration, integration, and transparency. It focuses on finding value drives for cost, cash, and growth. This helps with the end-to-end supply chain, implementing supply chain excellence and long term risk management.
TFC (assortment)
Two packaging types- 1 Liter and 0.3 PET bottle Three flavors- orange, orange C power, orange/mango shelf life of finished products is 20 weeks
Article 1 What Is The Future Of Supply Chain Management
Various industries in various parts in the supply chain. In order to support the speed of information movement and the web you need to think about information technology. " Amazon effect" A number of companies that were there were software companies that developed software tools. Many industries are challenged by speed of delivery, Artificial Intelligence,
What is your strategy as a business- Article 3
What are you going to do to fulfill customer requirements. You have to be efficient and responsive, you have to be certain that you have the capabilities, the equipment, and the know how to accomplish that because your customer wants it and is willing to pay for it.
If you don't have enough space in your warehouse- TFC
You go to your neighbor and buy space. Somebody has to pick up and move the product to the warehouse. When you want it back someone has to go and pick up the material from the warehouse.
TFC- Overflow
You want to minimize overflow to reduce cost
What is the purpose of a supply chain
aims to match supply and demand profitably for products and services
The fresh connection (challenge)
is the producer of fruit juices in NW Europe suffering severe losses in the last year because of poor performance A new management team has been appointed - the assignment is to make the company profitable again by making strategic structural and infrastructural supply chain decisions
The task of SCM
is to design, plan, and execute, the activities, and the different stages, so as to provide the desired level of supply chain customers profitably
Operations
managing the full time equivalents, mixing and bottling,
Infor (company)
software company- they develop a lot of software applications in the supply chain world the message of the video- is to buy their software so that your company can run there business better and say "we are supply chain".
A supply chain consists of
supplier, manufacturer, distributor, retailer, customer
What was the news from cologate
they are using reusable plastic to make toothpaste tools
Supply chains are linear
we draw resources from wherever and they get converted into something that can become a product, it gets recycled and the end of its life
What are you planning in TFC
you are planning capacity in mixing and bottling you are planning production of units (numbers of bottles in a period of time), you are also planning how many people are involved in the shift, you have the ability to set up shifts. you can add extra shifts, you can plan capacity for demand
TFC-messages to your suppliers
you are sending a message your suppliers of when you want it delivered how much you want,