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Supply Chain Management
Module 5
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Role of IT in supply chain
Information is a key supply chain driver.
Characteristics of Information in making supply chain decisions
Information must be accurate
Information must be accessible in a timely manner
Information must be of the right kind Information must be shared.
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The Supply chain macro Processes
The classification of macro supply chain are
Customer relationship management (CRM) Its a process focus on donstream interactions
Internal supply chain management (I!CM)
"ocus on internal operations
!upplier relationship management (!RM)
Its a process focus on upstream interactions
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In#$ouse or %utsource
TransactionManagement
"oundation
(TM")
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Customer Relationship Management
The CRM macro process consists of processes that take place
beteen an enterprise and customers.
&ey 'rocesses of CRM
Marketing
!ell %rder Management
Call!ervice center
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I!CM includes all processes involved in planning for fulfilling a
customer order.
'rocesses in I!CM
!trategic planning
emand 'lanning !upply 'lanning
"ulfillment
"ield !ervice
Internal Supply Chain Management
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&ey processes of !RM
esign Collaboration !ource
*egotiate
+uy
!upply Collaboration
Supplier Relationship Management
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3PL 4PL
It targets a function Targets management of entireprocess
,pl as a general manages one ormore functions not all the functions.
-pl as a general contractor homanages other ,pls truckersforarders custom brokers andothers
Third and Fourth Party Logistics providers
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Replenishment lead time
%n#Time performance !upply fle/ibility
elivery fre0uencyminimum lot si1e
!upply 0uality
Inbound transportation cost
'ricing terms
Information coordination capability
esign Collaboration
2/change rates ta/es and duties
!upplier viability
Supplier Scoring and assessment
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%nce supplier have been selected contracts are in place
and the product has been designed the buyer and suppliers
engage in procurement transactions that begin ith buyer
placing the order and end ith the buyer receiving and
paying for the order.
The Procurement Process
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irect Materials Indirect Materials
3se 'roduction Maintenance repair andsupport operations
4ccounting Cost of goods sold !564
Impact on 'roduction 4ny delay ill delay
production
7ess direct impact
'rocessing cost relative tovalue of transaction
7o $igh
*umber of transactions 7o $igh
i!!erences "et#een irect and Indirect Materials
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Product categori$ation "y value and critically
%igh
Lo#
%ighLo# &alue'Cost
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4 classic e/ample of a market ith multiple customer segments is
the airline industry here business travelers are illing to pay a
higher fare to travel a specific schedule hereas leisure travelers
are illing to shift their schedule to take advantage of loer fares.
The firm must solve the folloing to problems for pricing89hat price to charge each segment
8$o to allocate limited capacity among the segments.
Pricing ( Revenue Management !or Multiple Customers
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4 firm must use the folloing tactics effectively:
'rice based on the value assigned by each segment 3se of different prices for each segment
"orecast at the segment level
Revenue Management
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9hat is perishable;
4ny asset that loses its value over time is perishable like fruitsvegetables 6 pharmaceuticals.
2ven computers and cell phones come under perishable.
The revenue management tactics used for perishable assets are
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ynamic pricing the tactic of varying price over time is
suitable for assets such as fashion apparel that have a clear
date beyond hich they lose a lot of their value.
ynamic Pricing
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!easonal peaks of demand are common occurrence in many
supply chains.
Pricing !or seasonal demand
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Most firms face a market in hich some customers purchase
in bulk at a discount and other buy singe units or small lots at a
higher price.
Pricing !or "ul) and spot contracts
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Te*t
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