SCM Supply Chain Management
Logistics
"Logistics is the part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements."
Supply Chain Management
"Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies."
Counteracting the Bullwhip Effect
1.Change the way suppliers forecast product demand by making this information available at all levels of the supply chainShare real demand information (POS terminals) 2.Eliminate order batching 3.Stabilize pricing 4.Eliminate gaming
Business-to-Business (B2B) Evolution
1970's Automated order entry systems Telephone modem 1970'sElectronic Data Interchange (EDI )Computer to computer sharing 1990'sElectronic Storefronts On-line catalogs 1990'sNet Marketplaces Suppliers and buyers trade on Internet
Sales Revenue Model
A means of selling goods, information, or service directly to customers
Developing Supplier Relationship
A strong supplier base is critical to the success of many organizations Top three criteria for choosing suppliers :Price Quality On-time delivery Note: Choice of suppliers must be consistent with a company's mission.
Intranets
An organization's internal networks
Types of E-Commerce
Business-to-Consumer (B2C) on-line businesses sell to individual consumers: Advertising Revenue Model Subscription Revenue Model Transaction Fee Model Sales Revenue Model Affiliate Revenue Model Intranets Extranets
Affiliate Revenue Model
Companies receive a referral fee for directing business to an affiliate
Transaction Fee Model
Company receives a fee for executing a transaction
Additional measures
Customer service levels Inventory turns Weeks of supply Inventory obsolescence
Components of a Supply Chain for a Manufacturer
External Suppliers Internal Functions
Warehouses can either be
General - used for long-term storage Distribution - used for short-term storage, consolidation, and product mixing
Insourcing vs. Outsourcing
Is product/service technology critical to firm's success? Is product/service a core competency? Is it something your company must do to survive?
Benefits of B2B E-Commerce
Lower procurement administrative costs Low-cost access to global suppliers Lower inventory investment due to price transparency/reduced response time Better product quality because of increased cooperation between buyers and sellers, especially during the product design and development
Global SCM Factors
Managing extensive global supply chains introduces many complications Infrastructure issues like transportation, communication, lack of skilled labor, & scarce local material supplies Resulting in Higher costs and poorer services
Warehouses involved in supply chain distributions include
Plant warehouses Regional warehouses Local warehouses
Internal Functions
Processing, purchasing, planning, quality, shipping
Advertising Revenue Model
Provides users w/information on services & products; provides opportunity for suppliers to advertise
Expectations & Competition
SCM must consider the following trends, improved capabilities, & realities: Consumer Expectations and Competition Globalization Government Regulations and E-Commerce Green Supply Chain Management
Supply Chain Performance Metrics
Traditional measures Additional measures
Warehouses have three roles
Transportation consolidation - warehouses consolidate less-than-truckload (LTL) quantities into truckload (TL) quantities Product mixing - warehouse value added customer service of grouping a variety of products into a direct shipment to the customer Services - are offered can improve customer service by moving goods closer to the customer and thus reducing replenishment time
Sourcing Issues
Vertical integration - a measure of how much of the supply chain is owned or operated by the manufacturer Backward integration - owning or controlling of sources of raw material and components Forward integration - owning or controlling the channels of distribution
Subscription Revenue Model
Web site charges a subscription fee for access to the site
Radio Frequency Identification Technology (RFID)
automated data collection technology which relies on radio waves to transfer data between reader and RFID tag
Business-to-business (B2B) E-commerce
businesses selling to/buying from other businesses
Globalization
capitalize on emerging markets
Information Technology
enablers include the Internet, Web, EDI, intranets and extranets, bar code scanners, and point-of-sales demand information
E-commerce and e-business
uses internet and web to transact business
Crossdocking
Eliminates the storage (customer is known) and order-picking functions of a distribution warehouse while still performing the receiving and shipping functions. 4 types: Manufacturing, Distributor, Transportation, Retail Examples: Home Depot, Wal-Mart, FedEx
Components of a Supply Chain
External Distributors - transport finished products to appropriate locations Logistics managers are responsible for managing the movement of products between locations. Logistics includes: Traffic management - arranging the method of shipment for both incoming and outgoing products or material Distribution management - movement of material from manufacturer to the customer
Major Issues Affecting SCM
Information Technology E-commerce and e-business Business-to-business (B2B) E-commerce
Extranets
Intranets linked to the Internet for suppliers and customers to interact within their system.
Traditional measures
Return on investment Profitability Revenue growth
Supply Chains for Service Orgs
Services are similar (to manufacturers) Internal Operations (example: travel agency has travel planning and travel payment) Integration is key External Distributors Service provider maybe different i.e.; not a part of travel agency
Third-party Service Providers
ease of developing an electronic storefront has allowed the discovery of suppliers from around the world
Supply Chain
is the network of all the activities involved in delivering a finished product/service to the customer Sourcing of: raw materials, manufacturing & assembly, warehousing, order entry & tracking, distribution, delivery
Supply Chain Management
is the vital business function that coordinates and manages all the activities of the supply chain. Coordinates movement of goods through supply chain from suppliers to manufacturers to distributors Promotes information sharing along chain like forecasts, sales data, & promotions
Government Regulations and E-Commerce
issues of Internet government regulations
Consumer Expectations and Competition
power has shifted to the consumer (search & transaction)
Green Supply Chain Management
recycling, sustainable eco-efficiency, and waste minimization
External Suppliers
source of raw material Tier one supplier supplies directly to the processor Tier two supplier supplies directly to tier one Tier three supplier supplies directly to tier two
The Bullwhip Effect
the inaccurate or distorted demand information created in the supply chain Causes generated by demand forecasting updating order batching, price fluctuations, rationing gaming Results in Excessive inventory investment Poor customer service levels Ineffective transportation use Misused manufacturing capacity Lost revenues