1、16,Supply Chain Management,Supply Chain Management,Supply Chain: the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service.,Sometimes referred to as value chains,Warehouses Factories Processing centers Distributio
2、n centers Retail outlets Offices,Facilities,Functions and Activities,Forecasting Purchasing Inventory management Information management Quality assurance Production and Delivery Logistics Customer service,Typical Supply Chains,Typical Supply Chain for a Manufacturer,Typical Supply Chain for a Servic
3、e,Improve operations Increasing levels of outsourcing Increasing transportation costs Competitive pressures Increasing globalization Increasing importance of e-commerce Complexity of supply chains Manage inventories,Need for Supply Chain Management,Benefits of Supply Chain Management,Benefits of Sup
4、ply Chain Management,Lower inventories Higher productivity Greater agility Shorter lead times Higher profits Greater customer loyalty,Elements of Supply Chain Management,Successful Supply Chain,Trust among trading partners Effective communications Supply chain visibility Event-management capability
5、The ability to detect and respond to unplanned events Performance metrics,CPFR,Collaborative Planning, Forecasting, and Replenishment Focuses on information sharing among trading partners Forecasts can be frozen and then converted into a shipping plan Eliminates typical order processing,CPFR Process
6、,Step 1 Front-end agreement Step 2 Joint business plan Steps 3-5 Sales forecast Steps 6-8 Order forecast collaboration Step 9 Order generation/delivery execution,CPFR Results,Nabisco and Wegmans 50% increase in category sales Wal-mart and Sara Lee 14% reduction in store-level inventory 32% increase
7、in sales Kimberly-Clark and Kmart Increased category sales that exceeded market growth,Develop strategic objectives and tactics Integrate and coordinate activities in the internal supply chain Coordinate activities with suppliers with customers Coordinate planning and execution across the supply cha
8、in Form strategic partnerships,Creating an Effective Supply Chain,Supply Chain Performance Drivers,Quality Cost Flexibility Velocity Customer service,Velocity,Inventory velocity The rate at which inventory(material) goes through the supply chain Information velocity The rate at which information is
9、communicated in a supply chain,Barriers to integration of organizations Getting top management on board Dealing with trade-offs Small businesses Variability and uncertainty Long lead times,Challenges,Lot-size-inventory Bullwhip effect Inventory-transportation costs Cross-docking Lead time-transporta
10、tion costs Product variety-inventory Delayed differentiation Cost-customer service Disintermediation,Trade-offs,Trade-offs,Bullwhip effect Inventories are progressively larger moving backward through the supply chain Cross-docking Goods arriving at a warehouse from a supplier are unloaded from the s
11、uppliers truck and loaded onto outbound trucks Avoids warehouse storage,Trade-offs,Delayed differentiation Production of standard components and subassemblies, which are held until late in the process to add differentiating features Disintermediation Reducing one or more steps in a supply chain by c
12、utting out one or more intermediaries,Supply Chain Issues,Supply Chain Benefits and Drawbacks,Global Supply-Chain Issues,Supply chains in a global environment must be: Flexible enough to react to sudden changes in parts availability, distribution, or shipping channels, import duties, and currency ra
13、tes Able to use the latest computer and transmission technologies to schedule and manage the shipment of parts in and finished products out Staffed with local specialists to handle duties, trade, freight, customs and political issues,Plans to help achieve company mission Affect long-term competitive
14、 position Strategic options Many suppliers Few suppliers Keiretsu network Vertical integration Virtual company,Supply-Chain Strategies,Supply-Chain Strategies,Negotiate with many suppliers; play one supplier against another Develop long-term “partnering” arrangements with a few suppliers who will wo
15、rk with you to satisfy the end customer Vertically integrate; buy the actual supplier Keiretsu - have your suppliers become part of a company coalition Create a virtual company that uses suppliers on an as-needed basis.,Many sources per item Adversarial relationship Short-term Little openness Negoti
16、ated, sporadic POs High prices Infrequent, large lots Delivery to receiving dock,Many Suppliers Strategy,1 or few sources per item Partnership (JIT) Long-term, stable On-site audits & visits Exclusive contracts Low prices (large orders) Frequent, small lots Delivery to point of use,Few Suppliers Str
17、ategy,Raw Material (Suppliers),Backward Integration,Current Transformation,Forward Integration,Finished Goods (Customers),Ability to produce goods previously purchased Setup operations Buy supplier Make-buy issue Major financial commitment Hard to do all things well,Vertical Integration Strategy,For
18、ms of Vertical Integration,Iron Ore,Steel,Automobiles,Distribution System,Dealers,Silicon,Integrated Circuits,Circuit Boards,Computers Watches Calculators,Farming,Flour Milling,Raw Material (Suppliers),Backward Integration,Current Transformation,Forward Integration,Finished Goods (Customers),Baked G
19、oods,Japanese word for affiliated chain System of mutual alliances and cross-ownership Company stock is held by allied firms Lowers need for short-term profits Links manufacturers, suppliers, distributors, & lenders Partnerships extend across entire supply chain,Keiretsu Network Strategy,Virtual Com
20、panies,Companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations, or network corporations, 1995 Corel Corp.,Virtual Company Strategy,Network of independent companies Linked by technology PCs, faxes, Internet etc. Each contributes core
21、 competencies Typically provide services Payroll, editing, designing May be long or short-term Usually, only until opportunity is met,Managing the Supply-Chain,Options: Postponement Channel assembly Drop shipping Blanket orders Invoiceless purchasing Electronic ordering and funds transfer Stockless
22、purchasing Standardization Internet purchasing (e-procurement),Managing the Supply-Chain - Other Options,Establishing lines of credit for suppliers Reducing bank “float” Coordinating production and shipping schedules with suppliers and distributors Sharing market research Making optimal use of wareh
23、ouse space,Successful Supply-Chain Management Requires:,A mutual agreement on goals Trust Compatible organizational cultures,Issues in an Integrated Supply-Chain,Local optimization Incentives Large lots,Opportunities in an Integrated Supply-Chain,Generation of accurate “pull” data Reduction of lot s
24、ize Single stage control of replenishment,Vendor evaluation Identifying & selecting potential vendors Vendor development Integrating buyer & supplier Example: Electronic data exchange Negotiations Results in contract Specifies period of agreement, price, delivery terms etc.,Vendor Selection Steps,Co
25、mpany Financial stability Management Location Product Quality Price,Service Delivery on time Condition on arrival Technical support Training,Supplier Selection Criteria,Supply-Chain Performance Compared,SCM Firms,Purchasing is responsible for obtaining the materials, parts, and supplies and services
26、 needed to produce a product or provide a service.,Purchasing,Develop and implement purchasing plans for products and services that support operations strategies,Goal of Purchasing,Identifying sources of supply Negotiating contracts Maintaining a database of suppliers Obtaining goods and services Ma
27、naging supplies,Duties of Purchasing,Purchasing Cycle,Requisition received Supplier selected Order is placed Monitor orders Receive orders,Value analysis Examination of the function of purchased parts and materials in an effort to reduce cost and/or improve performance,Value Analysis vs. Outsourcing
28、,Centralized purchasingPurchasing is handled by one special department Decentralized purchasing Individual departments or separate locations handle their own purchasing requirements,Centralized vs Decentralized Purchasing,Choosing suppliers Evaluating sources of supply Supplier audits Supplier certi
29、fication Supplier relationships Supplier partnerships,Suppliers,Quality and quality assurance Flexibility Location Price,Factors in Choosing a Supplier,Product or service changes Reputation and financial stability Lead times and on-time delivery Other accounts,Factors in Choosing a Supplier (contd),
30、Evaluating Sources of Supply,Vendor analysis: Evaluating the sources of supply in terms of price, quality, reputation, and service,Vendor analysis - evaluating the sources of supply in terms of Price Quality Services Location Inventory policy Flexibility,Evaluating Sources of Supply,Supplier as a Pa
31、rtner,Ideas from suppliers could lead to improved competitiveness Reduce cost of making the purchase Reduce transportation costs Reduce production costs Improve product quality Improve product design Reduce time to market Improve customer satisfaction Reduce inventory costs Introduce new products or
32、 services,Supplier Partnerships,Critical Issues,Strategic importance Cost Quality Agility Customer service Competitive advantage Technology management Benefits Risks,Critical Issues,Purchasing function Increased outsourcing Increased conversion to lean production Just-in-time deliveries Globalization,
