1、Supply Chain Engineering MN 799,1#,SUPPLY CHAIN ENGINEERINGMN 799,TEXT: SUPPLY CHAIN MANAGEMENT Chopra and Meindl Prentice Hall COURSE OUTLINE Description Book pages 1/22 Introduction, curriculum, rules, exams, Infrastructure (1-27) 1/27 Strategic Fit and Scope. Supply Chain Drivers (27-51) 2/05 No
2、Class 2/12 Demand Management (169-204) 2/19 Aggregate Planning, Managing (205-225) 2/26 Guest Lecture Network Operations (71-168) 3/04 Managing Supply and Demand (121-144) 3/11 Class trip to see Supply Chain in Operation 3/18 No Class 3/25 Mid Term 4/01 Managing Inventory(249-295); 4/08 Product Avai
3、lability (297-384) 4/15 Sourcing and Procurement (387-410) 4/22 Transportation (411-219); Facility Decisions (109-133) 4/29 Beer Game 5/06 Co-ordination Information Information Technology & E-Business (477- 557) 5/13 FINAL EXAMINATION,Supply Chain Engineering MN 799,2#,GUIDELINES,GRADING: HOMEWORK 2
4、0% BEER GAME 5% MID TERM 30% FINAL 45% HOMEWORK MUST BE COMPLETED IN TIME. LATE SUBMISSIONS WILL START WITH A B GRADE CLASSES WILL START AT 6.00PM AND GO STRAIGHT THRU TO 8.00PM,Supply Chain Engineering MN 799,3#,DEFINITION OF A SUPPLY CHAIN,WHAT IS A SUPPLY CHAIN? A SUPPLY CHAIN COVERS THE FLOW OF
5、MATERIALS, INFORMATION AND CASH ACROSS THE ENTIRE ENTERPRISE SUPPLY CHAIN MANAGEMENT IS THE INTEGRATED PROCESS OF INTEGRATING, PLANNING, SOURCING, MAKING AND DELIVERING PRODUCT, FROM RAW MATERIAL TO END CUSTOMER, AND MEASURING THE RESULTS GLOBALLY TO SATISFY CUSTOMERS AND MAKE A PROFIT WHY A SUPPLY
6、CHAIN?,Supply Chain Engineering MN 799,4#,Traditional View: Logistics in the Economy,1990 1996 2006 Freight Transportation $352, $455 $809 B % Freight 57% 62% Inventory Expense $221, $311 $ 446 B % Inventory 39% 33% Administrative Expense $27, $31 $ 50 B Logistics related activity 11%, 10.5%,9.9% %
7、of GNP.,Source: Cass Logistics,Homework: What are 2007 statistics?,Supply Chain Engineering MN 799,5#,Traditional View: Logistics in the Manufacturing Firm,Profit 4% Logistics Cost 21% Marketing Cost 27% Manufacturing Cost 48%,Homework: What it the profile for Consumables; Pharamas and Computers,Sup
8、ply Chain Engineering MN 799,6#,Supply Chain Management: The Magnitude in the Traditional View,Estimated that the grocery industry could save $30 billion (10% of operating cost by using effective logistics and supply chain strategies A typical box of cereal spends 104 days from factory to sale A typ
9、ical car spends 15 days from factory to dealership Compaq estimates it lost $0.5 billion to $1 billion in sales in 1995 because laptops were not available when and where needed P&G estimates it saved retail customers $65 million by collaboration resulting in a better match of supply and demand Laura
10、 Ashley turns its inventory 10 times a year, five times faster than 3 years ago,Supply Chain Engineering MN 799,7#,HAMBURGERS AND FRIES,HAMBURGERS (4/LB) CATTLE FARM 50c/lb BUTCHER PACKAGING DISTRIBUTION CENTER RETAILER CUSTOMERProvide Sales Price at each stage,FRIES (3Large/lb) POTATO FARM 25C/lb P
11、OTATO PROCESSOR DISTRIBUTION CENTER RETAILER CUSTOMERProvide Sales Price at each stage,Supply Chain Engineering MN 799,8#,What problems do you foresee in this Supply Chain? Please write some down,Burger and Fries,Examine this process What do you observe?,Supply Chain Engineering MN 799,9#,Understand
12、ing the Supply Chain a chain is only as good as its weakest link Recall that saying? The saying applies to the principles of building a competitive infrastructure:,Manufacturer,Wholesaler,Retailer,Customer,Supplier,there is a limit to the surplus or profit in a supply chain,We are all part of a Supp
13、ly Chain in everything we buy,Supply Chain Engineering MN 799,10#,OBJECTIVES OF A SUPPLY CHAIN,MAXIMIZE OVERALL VALUE GENERATED SATISFYING CUSTOMER NEEDS AT A PROFIT VALUE STRONGLY CORRELATED TO PROFITABILITY SOURCE OF REVENUE CUSTOMER COST GENERATED WITHIN SUPPLY CHAIN BY FLOWS OF INFORMATION, PROD
14、UCT AND CASH FLOWS OCCUR ACROSS ALL STAGES CUSTOMER, RETAILER, WHOLESALER, DISTRIBUTOR, MANUFACTURER AND SUPPLIER MANAGEMENT OF FLOWS KEY TO SUPPLY CHAIN SUCCESS,UNDERSTAND EACH OBJECTIVE,Supply Chain Engineering MN 799,11#,DECISION PHASES IN A SUPPLY CHAIN,OVERALL STRATEGY OF COMPANY EFFICIENT OR R
15、ESPONSIVE SUPPLY CHAIN STRATEGY OR DESIGN ? LOCATION AND CAPACITY OF PRODUCTION AND WAREHOUSE FACILITIES? PRODUCTS TO BE MANUF, PURCHASED OR STORED BY LOCATION? MODES OF TRANSPORTATION? INFORMATION SYSTEMS TO BE USED? CONFIGURATION MUST SUPPORT OVERALL STRAGEGY SUPPLY CHAIN PLANNING? OPERATING POLIC
16、IES MARKETS SERVED, INVENTORY HELD, SUBCONTRACTING, PROMOTIONS, ? SUPPLY CHAIN OPERATION? DECISIONS AND EXECUTION OF ORDERS?,Supply Chain Engineering MN 799,12#,Basic Supply Chain Architectures (Examples),1. Indirect Channel,2. Direct Channel,3. Virtual Channel,Supplier,Supplier,Supplier,Supplier,Su
17、pplier,Supplier,Supplier,Supplier,Customer,Customer,Customer,Customer,Customer,Factory,Factory,Factory,Wholesale,Wholesale,Integrator,Express Freight,Retailer,Retailer,Retailer,VirtualStore,Fabricator,Fabricator,Credit Service,Supply Chain Engineering MN 799,13#,SOLE SOURCE SINGLE SOURCE MULTI-SOURC
18、E,INDIRECT CHANNEL DIRECT CHANNEL VIRTUAL CHANNEL,MAKE vs. BUY,Supply,Demand,Supply Chain Architecture,Strategic Issues. Demand Reach . Demand RiskCost StructureAsset UtilizationResponsiveness Supply Risk,Supply Chain Engineering MN 799,14#,SUPPLY CHAIN FRAMEWORK AND INFRASTRUCTURE,PRINCIPLE:BUILD A
19、 COMPETITIVE INFRASTRUCTUREThis principle is about VELOCITY,Supply Chain Engineering MN 799,15#,Cycle View of Supply Chains DEFINES ROLES AND RESPONSIBILITIES OF MEMBERS OF SUPPLY CHAIN,Customer Order Cycle,Replenishment Cycle,Manufacturing Cycle,Procurement Cycle,Customer,Retailer,Distributor,Manuf
20、acturer,Supplier,to,to,to,to,Supply Chain Engineering MN 799,16#,PROCESS VIEW OF A SUPPLY CHAIN,CUSTOMER ORDER CYCLE TRIGGER: MAXIMIZE CONVERSION OF CUSTOMER ARRIVALS TO CUSTOMER ORDERS ENTRY: ENSURE ORDER QUICKLY AND ACCURATELY COMMUNICATED TO ALL SUPPLY CHAIN PROCESSES FULFILLMENT: GET CORRECT AND
21、 COMPLETE ORDERS TO CUSTOMERS BY PROMISED DUE DATES AT LOWEST COST RECEIVING: CUSTOMER GETS ORDER,Supply Chain Engineering MN 799,17#,PROCESS VIEW OF A SUPPLY CHAIN,REPLENISHMENT CYCLE REPLENISH INVENTORIES AT RETAILER AT MINIMUM COST WHILE PROVIDING NECESSARY PRODUCT AVAILABILITY TO CUSTOMER RETAIL
22、 ORDER: TRIGGER REPLENISHMENT POINT BALANCE SERVICE AND INVENTORY ENTRY ACCURATE AND QUICK TO ALL SUPPLY CHAIN FULFILLMENT BY DISTRIBUTOR OR MFG. ON TIME RECEIVING BY RETAILER, UPDATE RECORDS MANUFACTURING CYCLE INCLUDES ALL PROCESSES INVOLVED IN REPLENISHING DISTRIBUTOR (RETAILER) INVENTORY, ON TIM
23、E OPTIMUM COST ORDER ARRIVAL PRODUCTION SCHEDULING MANUFACTURING AND SHIPPING RECEIVING,Supply Chain Engineering MN 799,18#,PROCESS VIEW OF A SUPPLY CHAIN,PROCUREMENT CYCLE SEVERAL TIERS OF SUPPLIERS INCLUDES ALL PROCESSES INVOLVED IN ENSURING MATERIAL AVAILABLE WHEN REQUIREDSUPPLY CHAIN MACRO PROCE
24、SSES CRM All processes focusing on interface between firm and customers ISCM A processes internal to firm SRM All processes focusing on interface between firm and suppliers,Supply Chain Engineering MN 799,19#,A Customers View of the Supply Chain,Order the product. with configuration complexity on-li
25、ne,Pay for the product. in a foreign currency by credit card,Service the product.anywhere in the world,Take delivery.the next day at home, andget started without a hassle,Ex.-Travel arrangements on line,FRONT OFFICE,Supply Chain Engineering MN 799,20#,Push/Pull View of Supply Chains PULL PROCESSES I
26、N RESPONSE TO A CUSTOMER ORDER PUSH PROCESSES IN ANTICIPATION OF A CUSTOMER ORDER,Procurement,Manufacturing and,Replenishment cycles,Customer Order,Cycle,Customer Order arrives,PUSH PROCESSES,PULL PROCESSES,Supply Chain Engineering MN 799,21#,UNDERSTANDING THE SUPPLY CHAIN,Homework EXAMPLES: EXAMPLE
27、S OF SUPPLY CHAINS 1.5 pp 20-25 WHAT ARE SOME OF THE KEY ISSUES IN THESE SUPPLY CHAINS ANALYSE AND COMMENT ON 7-Eleven and Amazon ANSWER QUESTIONS 1TO 6 FOR EACH,Supply Chain Engineering MN 799,22#,SUPPLY CHAIN PERFORMANCE STRATEGIC FIT AND SCOPE (Lesson 2),New Product Development,Marketing and Sale
28、s,Operations,Distribution,Service,Finance, Accounting, Information Technology, Human Resources,Business Strategy,New Product Strategy,Marketing Strategy,Supply Chain Strategy,Supply and Manufacture,FILM CHAIN REACTION,EXAMPLES?,Supply Chain Engineering MN 799,23#,ACHIEVING STRATEGIC FIT,Step 1. Unde
29、rstanding the Customer and Demand Quantity - Lot size Response time Product variety Service level Price Innovation,Implied Demand Uncertainty See Table 2.1 Regular Demand Uncertainty due to customers demand and Implied Demand Uncertainty due to uncertainty in Supply Chain,Supply Chain Engineering MN
30、 799,24#,Levels of Implied Demand Uncertainty,Low,High,Price,Responsiveness,Customer Need,Implied Demand Uncertainty Attributes (Table 2-2)Low Implied Uncertainty High Implied Uncertainty Product Margin Low High Aver. Forecast Error 10% 40-100%; Aver. Stockout rate 1-2% 10-40%; Aver. markdown 0% 10-
31、25%,Detergent Long lead time steel,High Fashion Emergency steel,Supply Chain Engineering MN 799,25#,SUPPLY SOURCE UNCERTAINTY,TABLE 2.3 SUPPLY UNCERTAINTY FREQUENT BREAKDOWNS UNPREDICTABLE AND/OR LOW YIELDS POOR QUALITY LIMITED SUPPLIER CAPACITY INFLEXIBLE SUPPLY CAPACITY EVOLVING PRODUCTION PROCESS
32、ES LIFE CYCLE POSITION OF PRODUCT NEW PRODUCTS HIGH UNCERTAINTY DEMAND AND SUPPLY UNCERTAINTY FIG 2.2,Supply Chain Engineering MN 799,26#,Step 2 - Understanding the Supply Chain: Cost-Responsiveness Efficient Frontier (Table: 2.4),High,Low,Low,High,Exercise: Give examples of products that are: Highl
33、y efficient, Somewhat efficient, Somewhat responsive and highly responsive,Cost (efficient),Responsiveness,Responsiveness to Quantity, Time, Variety, Innovation, Service level,Fig 2.3,Supply Chain Engineering MN 799,27#,Step 3. Achieving Strategic Fit,Low Cost,High Cost,Companies try to move Zone of
34、 Strategic fit,Supply Chain Engineering MN 799,28#,SCOPE,Comparison of Efficient SUPPLIER THERE IS A RIGHT SUPPLY CHAIN STRATEGY FOR A GIVEN COMPETITIVE STRATEGY (without a competitive strategy there is no right supply chain!) OTHER ISSUES AFFECTING STRATEGIC FIT MULTIPLE PRODUCTS AND CUSTOMER SEGME
35、NTS TAILOR SC TO MEET THE NEEDS OF EACH PRODUCTS DEMAND PRODUCT LIFE CYCLE Fig 2.8 AS DEMAND CHARACTERISTICS CHANGE, SO MUST SC STRATEGY - EXAMPLES COMPETITIVE CHANGES OVER TIME (COMPETITOR) EXPANDING STRATEGIC SCOPE INTERCOMPANY INTERFUNCTIONAL SCOPE MAXIMIZE SUPPLY CHAIN SURPLUS VIEW EVALUATE ALL
36、ACTIONS IN CONTEXT OF ENTIRE SUPPLY CHAIN (FIG 2.12) FLEXIBLE INTERCOMPANY INTERFUNCTIONAL SCOPE FLEXIBILITY CRITICAL AS ENVIRONMENT BECOMES DYNAMIC,Supply Chain Engineering MN 799,29#,Strategic Scope,Suppliers,Manufacturer,Distributor,Retailer,Customer,Competitive Strategy,Product Dev. Strategy,Sup
37、ply Chain Strategy,Marketing Strategy,Supply Chain Engineering MN 799,30#,Drivers of Supply Chain Performance,TRADE OFF FOR EACH DRIVER,Competitive Strategy,Supply Chain Strategy,Supply Chain Engineering MN 799,31#,INVENTORY,WHAT OF SUPPLY CHAIN MISMATCH BETWEEN SUPPLY AND DEMAND MAJOR SOURCE OF COS
38、T HUGE IMPACT ON RESP0NSIVENESS MATERIAL FLOW TIME I = R T (I Inventory, R Throughput, T Flow time) ROLE IN COMPETITIVE STRATEGY COMPONENTS CYCLE INVENTORY AVERAGE INVENTORY BETWEEN REPLENISHMENTS SAFETY INVENTORY - TO COVER DEMAND AND SUPPLY UNCERTAINITY SEASONAL INVENTORY COUNTERS PREDICTABLE VARI
39、ATION OVERALL TRADE OFF: RESPONSIVENESS VS EFFICIENCY,Supply Chain Engineering MN 799,32#,TRANSPORTATION,HOW OF SUPPLY CHAIN LARGE IMPACT ON RESPONSIVENESS AND EFFICIENCY ROLE IN COMPETITIVE STRATEGY COMPONENTS MODE AIR, TRUCK, RAIL, SHIP, PIPELINE, ELECTRONIC ROUTE SELECTION IN HOUSE OR OUTSOURCE O
40、VERALL TRADE OFF: RESPONSIVENESS VS EFFICIENCY,Supply Chain Engineering MN 799,33#,FACILITIES,WHERE OF SUPPLY CHAIN TRANSFORMED (FACTORY) OR STORED (WAREHOUSE) ROLE IN COMPETITIVE STRATEGY COMPONENTS LOCATION - CENTRAL OR DECENTRAL CAPACITY FLEXIBILITY VS EFFICIENCY MANUFACTURING METHODOLOGY PRODUCT
41、 OR PROCESS FOCUS WAREHOUSING METHODOLOGY STORAGE SKU, JOB LOT, CROSSDOCKING OVERALL TRADE OFF: RESPONSIVENESS VS EFFICIENCY,Supply Chain Engineering MN 799,34#,INFORMATION,AFFECTS EVERY PART OF SUPPLY CHAIN CONNECTS ALL STAGES ESSENTIAL TO OPERATION OF ALL STAGES ROLE IN COMPETITIVE STATEGY SUBSTIT
42、UTE FOR INVENTORY COMPONENTS PUSH VS PULL COORDINATION AND INFORMATION SHARING FORECASTING AND AGGREGATE PLANNING ENABLING TECHNOLOGIES EDI INTERNET ERP SCM OVERALL TRADE OFF: RESPONSIVENESS VS EFFICIENCY ?,Supply Chain Engineering MN 799,35#,Considerations for Supply Chain Drivers,Supply Chain Engi
43、neering MN 799,36#,MAJOR OBSTACLES TO ACHIEVING FIT,Multiple global owners / incentives in a supply chain Information Coordination & Contractual CoordinationIncreasing product variety / shrinking life cycles / demanding customers/customer fragmentation,Increasing demand and supply uncertainty,Local
44、optimization and lack of global fit,Supply Chain Engineering MN 799,37#,OBSTACLES TO ACHIEVING STRATEGIC FIT,INCREASING VARIETY OF PRODUCTS DECREASING PRODUCT LIFE CYCLES INCREASINGLY DEMANDING CUSTOMERS FRAGMENTATION OF SUPPLY CHAIN OWNERSHIP GLOBALIZATION DIFFICULTY EXECUTING NEW STRATEGIES ALL IN
45、CREASE UNCERTAINTY,Supply Chain Engineering MN 799,38#,Dealing with Product Variety: Mass Customization,Mass Customization,Low,High,High,Low,Long,Short,Lead Time,Cost,Customization,Supply Chain Engineering MN 799,39#,Fragmentation of Markets and Product Variety,Are the requirements of all market seg
46、ments served identical? Are the characteristics of all products identical? Can a single supply chain structure be used for all products / customers? No! A single supply chain will fail different customers on efficiency or responsiveness or both.,Supply Chain Engineering MN 799,40#,HOMEWORK,Page 49 N
47、ordstrom Answer Questions 1 to 4 Answer the above questions for A Page 67 Answer Questions 1 to 4,Supply Chain Engineering MN 799,41#,REVIEW QUESTIONS,WHAT IS STRATEGIC FIT? HOW IS IT ACHIEVED? COMPANYS APPROACH TO MATCH DEMAND REQUIREMENTS AND SUPPLY POSITIONING MULTIPLE PRODUCTS AND CUSTOMER SEGME
48、NTS PRODUCT LIFE CYCLE WHAT IS STRATEGIC SCOPE? INTERCOMPANY, INTERFUNCTIONAL EXTENSION WHAT ARE THE SUPPLY CHAIN DRIVERS. WHAT ARE THEIR ROLES AND COMPONENTS? INVENTORY; FACILITIES; TRANSPORTATION; INFORMATION OBSTACLES,Supply Chain Engineering MN 799,42#,Forecasting (uncertainty),Order service (certainty),Demand management,