Chap 1 intro.ppt

40
 Introduction to Supply Chain Management Source: Designing and Managing the Supply Chain, By D. Simchi-Levi, P . Kaminsky & E. Simchi-Levi

Transcript of Chap 1 intro.ppt

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Introduction to

Supply ChainManagement

Source: Designing and Managing the SupplyChain,

By D. Simchi-Levi, P. Kaminsky & E. Simchi-Levi

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Supply

Sources:plants

 vendorsports

RegionalWarehouses:stockingpoints

FieldWarehouses:stocking

points

Customers,demandcenterssinks

Production/purchasecosts

Inventory &arehousingcosts

!ransportationcosts Inventory &

arehousingcosts

!ransportationcosts

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S

U

PP

L

I

E

R

S

Component

Manufacturing

Final

Assembly

Distribution &

are!ousing

S T 

R S 

P!ysical Supply

Inboun" Logistics

P!ysical Distribution

#utboun" Logistics

THE LOGISTICS SYSTEM 

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Defnition:

Supply Chain Manaemen! is primarily concerne" #i!h !hee$cien! in!era!ion o% suppliers, %ac!ories, #arehousesan" s!ores so !ha! merchan"ise is pro"uce" an"

"is!riu!e" in !he rih! 'uan!i!ies, !o !he rih! loca!ionsan" a! !he rih! !ime, an" so as !o minimi(e !o!al sys!emcos! su)ec! !o sa!is%yin service re'uiremen!s.

Notice: Everyone is involve"

Sys!ems approach !o re"ucin cos!s *n!era!ion is !he key

Supply ChainManagement

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Conicting Objectives

 in the Supply Chain+. urchasing

S!ale volume re'uiremen!s

leile "elivery !ime Li!!le varia!ion in mi Lare 'uan!i!ies

/. Manu!acturing

Lon run pro"uc!ion 0ih 'uali!y 0ih pro"uc!ivi!y Lo# pro"uc!ion cos!

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Conicting Objectives

in the Supply Chain1. "arehousing Lo# inven!ory

2e"uce" !ranspor!a!ion cos!s 3uick replenishmen! capaili!y

4. Customers Shor! or"er lea" !ime

0ih in s!ock Enormous varie!y o% pro"uc!s Lo# prices

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#he Dynamics o! the

Supply Chain 

   #  r   "  e  r   S

   i  $  e

%ime

Source %om Mc 'uffry( Electronic Commerce an" )alue C!ain Management( *++,

Customer 

Deman"

Retailer #r"ersRetailer #r"ersDistributor #r"ersDistributor #r"ers

Pro"uction PlanPro"uction Plan

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5ha! Manaemen! 6e!s...

   #  r   "  e  r   S

   i  $  e

%ime

Source %om Mc 'uffry( Electronic Commerce an" )alue C!ain Management( *++,

Customer 

Deman"

Pro"uction PlanPro"uction Plan

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5ha! Manaemen!5an!s7

   )  o   l  u  m  e  s

%ime

Source %om Mc 'uffry( Electronic Commerce an" )alue C!ain Management( *++,

Pro"uction PlanPro"uction PlanCustomer 

Deman"

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 8he Dynamic Supply Chain *ncreasin cus!omer po#er lea"s

!o increase" "eman"s on re!ailers

*ncrease" re!ailer po#er lea"s !o

increase" "eman"s on suppliers

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Supply Chain:

 8he Mani!u"e *n +99, ;merican companies spen!

<9 illion in supply-rela!e" ac!ivi!ies

=or +>.?@ o% 6ross Domes!ic Pro"uc!A.  8ranspor!a!ion @

*nven!ory 1@

Manaemen! 4@  8hir" par!y lois!ics services re# in

+99 y +@ !o nearly <4> illion

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Dynamic orces o% !he

6loal Supply Chain  

GLOBAL

SUPPLY

CHAIN 

Resources

Logistics

User Logistics

InformationLogistics

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Supply Chain:

 8he Mani!u"e *! is es!ima!e" !ha! !he rocery in"us!ry

coul" save <1> illion =+>@ o% opera!in

cos!A y usin eec!ive lois!icss!ra!eies.

; !ypical o o% cereal spen"s more !han !hreemon!hs e!!in %rom %ac!ory !o supermarke!.

; !ypical ne# car spen"s + "ays !ravelin%rom !he %ac!ory !o !he "ealership, al!houhac!ual !ravel !ime is "ays.

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Supply Chain: 8he Mani!u"e

Compa' compu!er es!ima!es i! los! <>> million!o <+ illion in sales in +99 ecause i!s lap!opsan" "esk!ops #ere no! availale #hen an"#here cus!omers #ere rea"y !o uy !hem.

*n +991, *BM los! a ma)or %rac!ion o% i!s po!en!ial

sales o% "esk!op compu!ers ecause i! coul" no!purchase enouh chips !ha! con!rol !hecompu!er "isplays.

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Supply Chain: 8he Mani!u"e

Boein ;ircra%!, one o% ;mericas lea"in capi!aloo"s pro"ucers, #as %orce" !o announce#ri!e"o#ns o% </.? illion in c!oer +99F.

 8he reasonG H2a# ma!erial shor!aes, in!ernalan" supplier par!s shor!aes7I. =5all S!ree! Journal, c!. /1, +99FA

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Supply Chain:

 8he Po!en!ial

Proc!er & 6amle es!ima!es !ha! i! save" re!ailcus!omers <? million !hrouh lois!ics ains over !hepas! + mon!hs.

H;ccor"in !o P&6, !he essence o% i!s approach lies inmanu%ac!urers an" suppliers #orkin closely !oe!her

7. )oin!ly crea!in usiness plans !o elimina!e !hesource o% #as!e%ul prac!ices across !he en!ire supplychainI. =Journal o% Business S!ra!ey, c!.ov. +99FA

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Cos! S!ruc!ure in!he Supply Chain

Margin *-.*

*,.*

/.0

,.*

1.*

+.2

1-.2

Stores

#perating Cost

A"ministration

Logistics

Sales3Purc!ases

Mar4eting

Pro"uction

Cost

AC%UAL %AR'E%

+.,

*5.1

1.,

5.-6.0

,.-

10.,

*00 *00 7 A8erage Retail Price

,+.-

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Supply Chain:

 8he Po!en!ial

*n !#o years, a!ional Semicon"uc!or re"uce""is!riu!ion cos!s y /.@, "elivery !ime y 4F@ an"increase" sales y 14@ y

- Shu!!in si #arehouses aroun" !he loe.

- ;ir-%reih!in microchips !o cus!omers %rom a ne#  cen!rali(e" "is!riu!ion cen!er.

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Supply Chain:

 8he Po!en!ial *n +> years, 5al-Mar! !rans%orme" i!sel% y

chanin i!s lois!ics sys!em. *! has !he hihes!

sales per s'uare %oo!, inven!ory !urnover an"opera!in pro! o% any "iscoun! re!ailer.

Laura ;shley !urns i!s inven!ory +> !imes ayear, ve !imes %as!er !han !hree years ao.

 8his is achieve" y usin- e# *n%orma!ion Sys!em

- Cen!rali(e" 5arehouse

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“or a company #i!h annual sales o% <>> million an"a ?>@ cos! o% sales, !he "ierence e!#een ein a!

me"ian in !erms o% supply chain per%ormance an" in!he !op />@ is <44 million o% a""i!ional #orkincapi!al.I

99 PR%M Director Mi4e Ag!a:anian

Supply Chain: 8he Po!en!ial

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Supply Chain:

 8he Complei!yNational Semiconductors:

roduction:N Pro"uces chips in si "ieren! loca!ions: %our in

!he OS, one in Bri!ain an" one in *sraelN Chips are shippe" !o seven assemly loca!ions in

Sou!heas! ;sia. Distribution

N  8he nal pro"uc! is shippe" !o hun"re"s o%

%acili!ies all over !he #orl"N />,>>> "ieren! rou!esN +/ "ieren! airlines are involve"N 9@ o% !he pro"uc!s are "elivere" #i!hin 4 "aysN @ are "elivere" #i!hin 9> "ays.

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Supply Chain: 8he Complei!y 

+$ Supply Chain Integration

Conic!in )ec!ives

8he Dynamics o% !he Supply Chain

/. Matching Supply and Demand

1. System %ariations over #ime

4. Status o! &ogistics 'no(ledge

Many prolems are ne#

*ncomple!e un"ers!an"in o% issues

Me!ho"oloy is ra!her narro#

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*SSOES:

Decision Classica!ion Strategic lanning:

Decisions !ha! !ypically involve ma)or capi!al

inves!men!s an" have a lon-!erm eec!.+. De!ermina!ion o% !he numer, si(e an" loca!ion o%ne# plan!s, "is!riu!ion cen!ers an" #arehouses

/. ;c'uisi!ion o% ne# pro"uc!ion e'uipmen! an" !he

"esin o% #orkin cen!ers #i!hin each plan!1. Desin o% !ranspor!a!ion %acili!ies,communica!ions e'uipmen!, "a!a processinmeans, e!c.

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*SSOES:

Decision Classica!ion #actical lanning:

Eec!ive alloca!ion o% manu%ac!urin an" "is!riu!ion

resources over a perio" o% several mon!hs

+. 5ork-%orce si(e

/. *nven!ory policies

1. Deni!ion o% !he "is!riu!ion channels4. Selec!ion o% !ranspor!a!ion an" !rans-shipmen!al!erna!ives

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*SSOES:

Decision Classica!ion Operational Control:

*nclu"es "ay-!o-"ay opera!ional "ecisions

+. 8he assinmen! o% cus!omer or"ers !o

in"ivi"ual machines

/. Dispa!chin, epe"i!in an" processin or"ers

1. Qehicle sche"ulin

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*SSOES:

5hy Keep *nven!oryG )ncertainty in customer demands

)ncertainty in the supply Oncer!ain!y in 'uan!i!y an" 'uali!y Oncer!ain!y in "elivery !ime

Oncer!ain!y in cos!s

*conomies o! scale

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*SSOES:

Deman" orecas! #he three principles o! all !orecasting

techni+ues:

orecas!in is al#ays #ron

 8he loner !he %orecas! hori(on !he #orse !he

%orecas!

;rea!e %orecas!s are more accura!e

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*SSOES:*nven!ory con!rol

0o# much inven!ory !o keepG

Can uncer!ain!y e re"uce"G

5ha! si(e shoul" or"ers eG

0o# "oes %orecas!in !ool eec!

inven!ory levelG

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*SSOES: 8he Challene o%

*nven!ory Manaemen! Ma!chin supply an" "eman" accura!ely is

a cri!ical challene

HDell Compu!ers pre"ic!s a lossR s!ock plunes. Dellackno#le"e" !ha! !he company #as sharply o in i!s%orecas! o% "eman", resul!in in inven!ory #ri!e"o#nsI.=5SJ, ;uus! +991A

H*BM con!inues !o s!rule #i!h shor!aes in !he 8hink

Pa" lineI. =5SJ, May +994A HLi( Claiorne sai" i!s unepec!e" earnins "ecline is !he

conse'uence o% hiher !han an!icipa!e" ecessinven!oriesI.=5SJ, ;uus! +991A

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*SSOES:

Purchasin 5ha! !o Purchase

- *n-house pro"uc!ion Qs. e!ernal suppliers 

5here !o purchase

- Domes!ic Qs. in!erna!ional

rom #hom !o purchase

- Cos!

- 2eliaili!y: 'uali!y an" on !ime "elivery

- ;vailaili!y an" eiili!y

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*SSOES:

Purchasin

Cen!rali(e" Qs. Decen!rali(e"

umer o% suppliers:Sinle sourcin Qs. Mul!iple sourcin

Supply con!rac!s

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*SSOES:

Pro"uc!ion Loca!ion o% manu%ac!urin plan!s

Pro"uc!ion cos!

 8aes

*ncen!ives =y overnmen!A

Proimi!y !o marke!s an" ra# ma!erials 8ranspor!a!ion in%ras!ruc!ure

Poli!ical s!aili!y an" cul!ure

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*SSOES:

Pro"uc!ion

leiili!y

 8he aili!y !o pro"uce "ieren!pro"uc!s simul!aneously an"e$cien!ly

 8he aili!y !o pro"uce ne# pro"uc!se$cien!ly

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*SSOES:

Pro"uc!ion E$ciency

Lo# cos! Shor! lea" !ime

2eliaili!y

n-!ime "elivery 3uali!y

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*SSOES:

Dis!riu!ion 8he s!ruc!ure o% !he "is!riu!ion

ne!#ork

 8he "is!riu!ion s!ra!ey

 8he Classical S!ra!ey

Cross Dockin

Direc! Shippin

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*SSOES:Pro"uc! Desin

5ha! role "oes pro"uc! "esin playin supply chain manaemen!G

5hen is re"esinin pro"uc!s#or!h !he cos!G

Can pro"uc! "esin compensa!e

%or uncer!ain!y in cus!omer"eman"G

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*SSOES:*n%orma!ion Sys!ems

 8he a"van!aes o% a"vance"in%orma!ion sys!ems

 8he challene o% unlimi!e" "a!a 8he roll o% e-commerce

*mpac! o% !he in!erne!

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*SSOES:

5ha!s e# inLois!icsG 6loal compe!i!ion

Shor!er pro"uc! li%e cycle

*ncreasin pro"uc! varie!y

e#, lo#-cos! "is!riu!ion channels

More po#er%ul #ell-in%orme"cus!omers

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*SSOES:

5ha!s e# inLois!icsG e# communica!ions an"

in%orma!ion !echnoloies PS an"ED* !echnoloy

5ireless !echnoloy

Decision Suppor! Sys!ems *n!era!e" sys!ems

Mul!i-mo"al !ranspor!a!ion

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*SSOES:

5ha!s e# inLois!icsG  e# concep!s in lois!ics

Push Qs Pull s!ra!eies

Cross "ockin

S!ra!eic alliances

Manu%ac!urin pos!ponemen!

Desin %or Lois!ics