SCMN 4700 TEST 1

Traditional vs Innovative SCPM

Traditional -Based on cost -Profit-based -Short-term oriented -Focused on individual metrics -Comparison w/ Standard Innovative -Based on value -Client-oriented -Long-term oriented -Focused on team metrics -Monitoring of improvement

The 3 V's of Big Data

Volume -Specific details including price, quantity, items sold, time of day, consumer decision and purchasing behavior (items browsed and bought), perpetual inventory at more locations Velocity -Sales Data: from monthly and weekly to daily and hourly -Consumer Data: from click-through to card usage -Inventory Data: from monthly updates to hourly updates Variety -Specific details including direct sales, sales of distributors, internet sales, competitor sales, shopper identification, eye-tracking data, product reviews, inventory in warehouses and stores

Supply Chain Operations Reference Model (SCOR)

-A framework for examining the supply chain in detail through defining and categorizing the processes that make up the chain, assigning metrics to such processes, and reviewing comparable benchmarks -Defines a supply chain as being composed of 5 main integrated processes: Plan, Source, Make, Deliver and Return

Demand Data Drilling

-Demand is associated with the downstream side of the value chain -Which values represent the performance of the firm? Ð Financial performance (Profit margin as a function of COGS and sales) -What are the factors that contribute to firm performance? Ð Inventory levels, sales, costs Ð Is inventory high or low for a region? Are sales high or low for a region? Are costs high or low for a region?

Performance measurement is defined as the process of quantifying the efficiency and effectiveness of action

-Effectiveness is the extent to which customer's requirements are met -Efficiency measures how economically a firm's resources are utilized to achieve a predetermined level of customer satisfaction -SCPM provides the means by which a company can assess whether its supply chain has improved or degraded

Demand Data Implications

-Think of short- and long-term implications ¥ Short-term will affect operations ¥ Long-term will affect strategy -What are your findings and how do they influence the efficiency and effectiveness of your company? -Do your data analysis BEFORE you develop solutions.

Demand Data

-First and foremost, clean the data ÐSearch for anomalies in data ¥Outliers associated with inventory levels, profit margins, errors with cities, zip codes, data input in wrong fields, etc. -Second, annotate any errors -Third, gain a 'feel' for the data ÐWhat are general averages, trends in COGS, sales, inventory levels? What do different regions 'look' like? ÐVisualize the data with charts and graphs. -Fourth, organize data in association with the initial problem.

Transportation Operations

-Fulfill customer service through timely delivery of goods (right product, right place, right time) -Transportation handles the flow of inbound and outbound shipments -Balances cost and service -A primary contributor to TCO - total cost of ownership -Integrated Ð Visibility Ð Carrier management Ð Pipeline management/capacity Ð Supports firm strategy

Secondary Issues in SCM (4 of 7)

-Improve Customer Service: Provide customers with more and more services to challenge competitors and other markets -Speed of Product Delivery to Markets -Visibility: Product differentiation to satisfy customer requirements, respond to new and existing competition -Making Supply Chains Less Complex

Primary Purpose of SC Performance Management

-Performance measurement enables supply chains to strategically manage and continuously control achieving of objectives -It provides the necessary assistance for performance improvement in pursuit of supply chain excellence.

Primary Issues in SCM

-Reducing Operating Costs and Overall Inventory Costs •Goal is shorter lead times, more realistic forecasting, lean manufacturing, and better throughput

Quantitative Data Analysis

-The process of inspecting, cleaning, transforming, and modeling data for discovering information, developing conclusions, and supporting decisions. -Essentially, turning raw data into meaningful information by applying critical and logical thinking.

Supply Chain Performance

-The real goal is to ensure high margins ¥What does the supply chain look like? ¥What are the influences of the following? ¥ Risk (market, climate, disaster, geopolitics) ¥ Technology (innovation, robotics, artificial intelligence) ¥ Sustainability (urbanisation, natural resources, demographics)

Transportation Metrics

-Time Ð On-time delivery, accurate transit time -Product and service integrity (quality) Ð Claims free delivery Ð Percentage of rejects and customer returns, errors, or scrapped items delivered -Spending efficiency Ð Freight costs per ton-mile, expenses per unit -Asset utilization Ð % of capacity under use, empty miles -Resource Productivity Ð Maximum number of staff and/or resources to be allocated to the project

Transportation Activities

-Transportation Management Systems (TMS) Ð Routing and Scheduling Ð Order consolidation Ð Load planning Ð Shipment tracking Ð Pickup/Delivery scheduling

Transportation Modes

-Truckload (TL) - single, large shipments greater than 15K lbs; straight haul approach (e.g. JB Hunt, Schneider) -Less-than-truckload (LTL) - multiple shipments less than 15K; consolidates through hub-and-spoke approach (e.g. Yellow Freight, UPS and FedEx freight) -Small packages - shipments of less than 150 lbs., multiple shipments in a van or truck; hub-and-spoke approach (e.g. UPS and FedEx ground)

Order Management

All the activities involved in receiving, filling, and delivering customer orders -Processing and transmission -Fulfillment and packaging -Shipment tracking and delivery -Customer invoicing and payment collection

Key SC Performance Issues

Any SCM performance framework should address: ¥ Inclusiveness - all aspects of the supply chain ¥ Universality - allows comparison under different operating conditions ¥ Measurability - output is quantifiable (i.e. can be measured) ¥ Consistency - metrics are compatible with supply chain goals

Big Data

Big data is a term used to describe the massive volume of both structured and unstructured data that is too large and is difficult to process using conventional database and software techniques -Currently the world has around 2.8 zeta bytes of data

Demand Management Strategies

▪Rationalize product portfolio Ð Effect of product life cycle; Changing demand patterns Ð Product substitution; Focus on sales velocity and profitability ▪Align fulfilment strategies Ð Review potential shifts in markets and customers; Ð Align fulfillment strategy and sales territories ▪Prioritize customers & products Ð Divide customers into A, B, C categories based on (for example): fill rates, on-time deliveries, expedited service, etc. Ð This has to be complemented and reflective of inventory levels, close relationships, etc. ▪Share demand information Ð Collaborative Planning Forecasting and Replenishment (CPFR) ▪Give up control when appropriate Ð Vendor Management Inventory (VMI)

Problems Associated w/ Poor Management

▪The Bullwhip Effect (buildup of demand vs inventory) ▪Errors ▪High costs ▪Poor Efficiency ▪Dissatisfaction among customers ▪Lost revenues

Demand Management

▪The ability to recognize and fulfill demand for goods and services to support the marketplace ▪Demand is the basis for supply chain activities. That is, customers "run" the supply chain by their purchasing behaviors. ▪Customer demand creates the need for resources and activities to be allocated to logistics.