Supply Chain Management Lecture 1. Announcements Workshop on applying for scholarships –Jan 19,...
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Transcript of Supply Chain Management Lecture 1. Announcements Workshop on applying for scholarships –Jan 19,...
Announcements
• Workshop on applying for scholarships– Jan 19, 10:00am-1:00pm, KOBL 360– Jan 28, 12:00pm-2:00pm, KOBL 360
• Signup sheet outside Trep Café– Jan 13, 8:00am-1:00pm– Jan 14, 8:00am-1:00pm
What is a Supply Chain?
• A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request– Suppliers, manufacturers, transporters, warehouses, retailers, and
customers
• A supply chain includes all functions involved in receiving and filling a customer request– New product development, marketing, operations, distribution,
finance, and customer service
• A supply chain is the entire process of moving a product or service from suppliers to customers
Stages of a Detergent Supply Chain
CustomerWal-Mart
Store
Wal-Mart or ThirdParty DC
P&G or OtherManufacturer
PactivCorporation
PaperManufacturer
TimberCompany
PlasticProducer
ChemicalManufacturer
Example: Wal-Mart
Customers Request:Buying detergent,clothes, TV, …...
Wal-Mart Stores
Wal-Mart or third-partydistribution
centers
Procter & Gamble
Plastic ProducerFabric Producer
Da-Fa Clothing, Inc. (China)
SONY Factory (Malaysia)
Electronics Components Producer
Chemical Producer
Zipper Producer
Thread Producer
Plastic Producer
Example: HP
Subassembly
Suppliers
FAT
USA DCs
Europe DCs
AsianDCsSuppliers
FAT = Final assembly & testIC Mfg = Integrated circuit manufacturingPC Board = Printed circuit board
Suppliers
Suppliers PC Board
IC Mfg Retailer Customer
Retailer Customer
Retailer Customer
Example: Dell
Customers order computers on Dell’s website
Dell Assembly
Plant
Monitors by SONY (Mexico)
Keyboards by Acer (Taiwan)
CPU by Intel (USA)
Other components
Dell is significantly revamping its entire supply chain strategy and, in large measure, abandoning
its make-to-order model [April, 2008]
Supply Chain Stages
• A typical supply chain involves a variety of stages
Manufacturer Distributor Retailer CustomerSupplier
Most supply chains are actually supply networks
Supply Chain Flows
Manufacturer Distributor Retailer CustomerSupplier
Value-Added Services
Material/Product Flow
Funds/Demand Flow
Information Flow
Returns/Recylcing
What is a Supply Chain?
• A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request– Suppliers, manufacturers, transporters, warehouses, retailers, and
customers
• A supply chain includes all functions involved in receiving and filling a customer request– New product development, marketing, operations, distribution,
finance, and customer service
• A supply chain is the entire process of moving a product or service from suppliers to customers
Supply Chain Cycle
Marketing
Product design
Suppliers
Manufacturing
Logistics
Customer
Reverse logistics
The Objective of a Supply Chain
• Supply chain value is the difference between what the final product is worth to the customer and the costs the supply chain incurs in filling the customer’s request
• Supply chain profitability (or supply chain surplus) is the difference between the revenue generated from the customer and the overall cost across the supply chain
Maximize overall value created
The Objective of a Supply Chain
• Sources of supply chain revenue: Customer– Best Buy receives $60 from a customer for a wireless router
• Sources of supply chain cost: Flows of information, products, and funds between any pair of stages in the supply chain– Difference between $60 and the sum of all costs is the supply
chain profit or supply chain surplus
Supply chain profitability is the total profit to be shared across all supply chain stages and intermediaries
Supply chain success should be measured by total supply chain profitability, not profits at an individual stage
The Importance of Supply Chain Decisions
• Supply chain design, planning, and operation play a significant role in the success or failure of a firm– Wal-Mart– Dell – Seven-Eleven Japan– Amazon– Toyota– W.W. Grainger and McMaster-Carr– Webvan– Snapple
Overview
• Part I– Understanding the supply chain
• Chapters: 1, 2, 3
• Part II– Designing the supply chain network
• Chapters: 4, 5, 6
• Part III– Planning demand and supply in a supply chain
• Chapters: 7, 8, 9