Introduction to the SSCM module - Organization RELATORI ...
Transcript of Introduction to the SSCM module - Organization RELATORI ...
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Supply Chain ManagementProf. Roberto Pinto
RELATORIProf. Roberto Pinto
Supply and Service Chain Management
Introduction to theSSCM module - Organization
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Organization
Supply and Service Chain Management (module of an Integrated course)o 37042-ENG Corso integrato di Gestione delle operations e Supply and
Service Chain Managemento 37154-ENG Operations Management and Supply and Service Chain
Managemento 37158-ENG Supply and Service Chain Management
Structure: 2 partso Supply chain management – Prof. R. Pinto (from 24/02 to 21/04)
o Service management – Prof. G. Pezzotta (from 27/04)
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Study material
Slides avaialable on Moodle https://elearning15.unibg.it/
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Organization
Examo Written: True/False questions, open questions, exerciseso 2 partial exams (to be confirmed):
o 20 or 21/04/2020 on the Supply chain parto 26/05/2020 on the Service part
o All students enrolled in 2019/2020 course are allowed to take the first partial
o Only student who get a mark higher than 18 at the first partial are allowed to take the second partial. The other must take the complete exam see exam calendar
o The complete exam is about both the supply chain and the service parts
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Organization
Examo The final mark of the SSCM module is given by:
o The average of the two partial exams (if both are > 18)o The average of the Supply chain and Service parts (in a complete exam)
o The final mark of the INTEGRATED COURSE is given by the average of the marks:o In the SSCM moduleo In the Operations management module
Supply Chain ManagementProf. Roberto Pinto
RELATORIProf. Roberto Pinto
Supply and Service Chain Management
Introduction toSupply Chain Management
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What is a supply chain?
Distributor /Warehouse
Store
Manufacturer
Subcontractor
Supplier
Supplier
Manufacturer
Supplier
Supplier
Customer
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What is a supply chain?
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request for a product or a service
Many actors are involved:
o Manufacturers
o Suppliers
o Wholesalers / Distributors / Retailers
o Transporters/3PL
o Subcontractors
o Customers
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Supply Chain ManagementProf. Roberto Pinto
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Source: washingtonpost.com
What is a supply chain?
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What is a supply chain?
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Source: seattletimes.nwsource.com
What is a supply chain?
Supply Chain ManagementProf. Roberto Pinto
sourcing the best
materials from the best
manufacturers around
the world
Source: seattletimes.nwsource.com
What is a supply chain?
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Source: iter.org
What is a supply chain?
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What is a supply chain?
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Source: www.supplychain247.com
https://youtu.be/7UxRAhTJ1CM
What is a supply chain?
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Earlier this year, a factory explosion at an Evonik Industries plant in Germany dramatically reduced the amount of nylon supply available to its customers, one of those customers being A. Schulman. This could have led to a supply chain disaster, had it not been for a risk-management best practice Schulman and other plastics manufacturers follow: shifting to alternate materials and in some cases, alternate formulations.
Source: www.ihs.com - www.industryweek.com
What is a supply chain?
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…Apple has already begun flexing its supply chain muscles by shipping so many units of upcoming devices from its manufacturing facilities to sales outlets that it is causing delays for other manufacturers.
…The company is apparently flooding its channels with devices, causing shipments for other ‘top tier’ device makers to be delayed to make way for Apple products (Sept. 2014).
Source: techcrunch.com/
What is a supply chain?
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What is a supply chain?
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What is a supply chain?
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What is a supply chain?
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What is a supply chain?
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A real-life example
Customer perspective: let’s go to the store and
buy one!
Adapted from: bloomberg.com
Apple announced next-gen iPhone
Apple perspective: let’s ship millions devices in
two weeks!
If everything goes ok, this process should stay hidden from public view
Sell the product and collect new orders
Organize shipping via air and road (and secure
them as well)
Move devices fromChina to final stores
Let’s buy components in advance to build new
devices
How many iPhones should be
manufactured?
Let’s bring components to the factories
This example relates only to the operations in the
supply chain
https://youtu.be/YbM_LydRlnM
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SC configuration characteristics
Number of levels
Number of facilities per level
Level of integration
Geographical extension
IT
DE
IT
FR
HU
DE
DE
Group
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SC configuration characteristics
Linear
Convergent
Divergent
Supply chainlayer or echelon
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What is supply chain management (SCM)?
Supply Chain Management (SCM) is the management of supplychain assets, products, information, and fund flows to maximizethe total supply chain value
SCM deals with efficient and effective material, financial, and information flows
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What is the objective of supply chain management?
The objective is to maximize the overall value generated
What is value? A simplified definition…
What the final product/ service isworth for
the customer
Costincurred by the supply
chain in filling the customer’s
request
VALUE
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Why SCM is important?
Drive and fulfill customers’ expectations: Customers expect the correct product assortment and quantity to be delivered at the right location
and the right time.
Customers expect products to be serviced quickly (i.e. after sales service)
Customers expect higher “service levels”
Reduce operating costs: Purchasing, production, warehousing, transportation, return…
Improve bottom line and cash flow
Support the business: Companies have to deliver what they promise
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Supply chain flows
Distributor /Warehouse
StoreManufacturerSupplier Customer
Physical flow (goods)
Financial flow (money)
Physical return flow (returned or end-of-life goods)
Information flow
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What is supply chain management (SCM)?
SCM encompasses several processes
Internal perspective
External (interface) perspective
Focal company perspective
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What is supply chain management?
Plan Source Make Deliver Service Return
Internal perspective
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Main supply chain management processes
Demand management
Supply management
Distribution network design and management
Transportation management
Inventory management
Manufacturing management
…
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Demand management
Supply management
Distribution network design and management
Transportation management
Inventory management
Manufacturing management
…
Marke
ting
Ne
w P
rod
uct D
eve
lop
me
nt
Sales
Finan
ce
…
Main supply chain management processes
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What is supply chain management?
Plan Source Make Deliver Service Return
External (interface) perspective
Plan Source Make Deliver Service Return
Plan Source Make Deliver Service Return Plan Source Make Deliver Service Return
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The focal company perspective
StoreManufacturerSuppliers Customer
DELLIntelLGMicrosoft
WalMartElec. sellers
Intel DELLRaw materialPart suppliers
Focal Company
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A systemic perspective
Our goals
Our decisions
Business success
Other agents goals
Other agents decisions
Unexpectedconsequences
Unexpectedconsequences
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Major trends involving SCM
Shift in global economic power• By 2030 the size of the leading emerging economies will overtake that of the current G7
group new market, new territories, new rules…
Demographic & social change• By 2025 the world’s population will be about 8 billion new customers? Less resources?
Technological breakthroughs• New products, new services, new cost structures, new SC structures…
Climate change and resource scarcity• An increase of 35% in food demand is expected by 2030
Rapid urbanization• By 2025 it is expected that there will be 37 megacities (up from 23 today)
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Other factors influencing SCM
Densification of Product
Diversification of Sales Channels
Decentralization of Production
Digitization of Products
Complexity
Cost /value
Technology
Supply chain security
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Importance of inter-company coordination
SCM pursues the coordination of the SC, occurring whenall the stages of a SC work towards a common objective of maximizing the total SC value
Coordination is based on information sharing
Lack of coordination can results in significant losses
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Supply chain management key decisions
SCM encompasses three decisions phases
SCM decisions differ in:
Frequency
Time frame of impact
SCM Design (or SCM Strategy)
SCM PlanningSCM Operation
(or SCM Execution)
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Supply chain management key decisions
Decision phase
Frequency Time frame of impact Example of key decisions
SC Design Very low (i.e. once every 5 years)
Long, several years • SC configuration• SC facility location and size• Insource / outsource• Process definition• Transportation available
SC Planning Medium to high (3-4 times per year)
Few months (configuration is fixed)
• Strategic forecasting• Supplier selection and mngt• Inventory and production policies• Market promotions
SC Execution Very high (daily or weekly)
Short, few days or weeks (policies are fixed)
• Order fulfillment & shipment• Inventory allocation• Inbound / outbound logistics• Expediting• Short term forecasting
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SCM vs Logistics
Logistics is that part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information
Logistics is a part of the SCM
SCM is a broader concept than logistics
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SCM vs Logistics
Logistics typical activities In-bound transportation
Out-bound transportation
Storage / warehousing
Materials handling
Inventory control
Order fulfillment
(Forecasting)
(Production planning)
(Packaging)
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SCM as Risk Management
Modern supply chains are exposed to numerous kinds of events that may disrupt the course of their businesses
These events are usually:
Random (they have a probability of occurrence)
Disruptive (they have a relevant impact on the performance)
Managerial decisions always entail risks
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SCM as Risk Management
Management of risk: entails decisions and actions to:
Reduce the exposure to risks
Mitigate the consequences of risks
Counterbalance the impacts
SCM is all about managing risks!
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References
Chopra, S., Meindl, P. (2010). Supply Chain Management (4th edition), Pearson
Cavalieri, S., Pinto, R. (2007), Orientare al successo la supply chain, ISEDI
www.supply-chain.org
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Credits
CELS – University of Bergamo
Roberto Pinto Ph.D
Logistics and Supply Chain
http://cels.unibg.it
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