Chap010.ppt Supply Chain Management 000

7/30/2019 Chap010.ppt Supply Chain Management 000

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McGraw-Hill/Irwin

The McGraw-Hill Companies, Inc. 2007, All Rights Reserved

Supply Chain Management

Chapter 10


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Chapter 10 Outline

Definitions and Terminology

System Interactions

Coordination in Supply Chain

Measuring Supply Chain PerformanceSupply Chain Strategies

Structural Improvement

Improvement in InfrastructureThe Internet and Supply Chains

Virtual Supply Chains


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Supply Chain


Distribution ChannelDemand management

Logistics management


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Supply Chain

The sequence of business processes and

information that provides a product or service

from suppliers through manufacturing and

distribution to the ultimate consumer.


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Planning, design, and control of the flow of

information and materials along the supply

chain in order to meet customer requirements

in an efficient manner, now and in the future.


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Distribution Channel

The route from the producer forward through the

distributors to the customer


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Demand Management

Managing the demand for goods or services

along the supply chain.

Demand can be managed through such

mechanisms as products, pricing, promotion,

and distribution.


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Logistics Management

If broadly defined, it is the same as supply

chain management.

Narrowly defined, logistics management is

concerned with inbound transportation and

outbound distribution.


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A Typical Supply Chain


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System Interactions(System Dynamics in Supply Chains)

Supply chain is a highly interactive system.

Decisions in each part of the chain affect the

other parts.

There is an accelerator (bull whip) effect

The best way to improve a supply chain is to

reduce the total replenishment time and to feed

back actual demand information to all levels.


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Widget Example (Figure 10.2): Retail Level


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Widget Example (Figure 10.2): Wholesale Level


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Widget Example (Figure 10.2): Factory Level


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Coordination in the Supply Chain

Need for coordination both within firms and

across firms

Supply chains must be managed across

organizational boundaries.

Parallel between supply chain and quality

improvement


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Measuring Supply Chain

Performance (1)

Deliveryon time delivery of entire orders.

Quality

Customer satisfaction

Customer loyalty

Time

Total replenishment time

Cash to cash cycleDays in inventory + days in accts receivable-days inaccounts payable


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Measuring Supply Chain

Performance (2)

Flexibility

Time to change volume or product mix by a

certain percentage

Maximum percentage of change in volume or

product mix in fixed time perion

Cost

Total delivered cost

Value added or productivity


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Supply Chain Strategies

Functional productscommodity-like

Efficient, low cost supply chain

Innovative products

Flexible, fast supply chain

Firms should sort their products and apply the

appropriate strategies


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Basic Ways to Improve Supply Chain Structure:

Change structure

Capacity, Facilities, Process technology, vertical

integration

Change infrastructure

People, Information systems, Organization, Production

and inventory control, Quality control systems


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Forms of Structural Change in a

Supply Chain

Forward and Backward Integration

Major process simplificationChanging the configuration of factories,

warehouses, or retail locations

Major product redesignOutsourcing logistics to a third party.


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Improvement in Infrastructure

Cross-functional teams

Partnerships with suppliers and customers

Set-up time reduction to reduce lot sizesIntegrated information systems

Cross-dockingkeeps goods out of the

warehouses.


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The Internet and Supply Chains

Fundamental processes in supply chains:

Order placement

Order fulfillment

e-Procurement and its types

Potential problems with e-Procurement


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Processes for e-Procurement (Figure 10.3)

Requirement Selection Requisition Approval

REQUEST

Requisition Source Negotiate Contract

BUY

ConfirmProcess

OrderShip Invoice

SUPPLY

Receive Deliver Match Pay

PAYMENT


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Types of e-procurement

On-line catalogs listing products, prices, etc.

Third-part auctionsreverse auctionsPrivate exchanges to connect suppliers


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Problems with e-procurement

Too much focus on technology; not enough on

systems

Insufficient concern about value to both

partners

Fragmented efforts within and across

companies

Record accuracy and data security issues


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Virtual Companies:

Highly flexibleno fixed assets

Successful in highly dynamic environment

Made feasible by computers and the Internet

May lead to hollow corporations or shell

companies

Virtual Supply Chain consists of at least onevirtual company that coordinates all activities

of the supply chain


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Summary


System Interactions

Coordination in Supply Chain

Measuring Supply Chain PerformanceSupply Chain Strategies


Improvement in Infrastructure

The Internet and Supply Chains



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End of Chapter Ten

Chap010.ppt Supply Chain Management 000

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