1

Supply Chain Management&

Logistics Management

Mr. EzzElarab M.ElawoorUniversity of Palestine

2

The flows of apparel and fashion accessory products, services, information, and finances

3

The Emergence of Supply Chain Concept• ________________________________________

– Customer base is not limited to a domestic market but expanded to the global market.

– Growing number of global competitors

• ________________________________________• ________________________________________

– “Everyday low prices” policy and its impact on cost cutting.– Demanding retailers leveraging more consumer information

and supplier choices.

• Deregulation means increased competition• Technology

– Unlimited access to information– Tools to improve efficiency and effectiveness

4

Supply Chain as a Competitive Leverage

• _______________________________________ to compete in the global market

• M&As, alliances, … and managed supply chains• Supply Chain is an ____________________ concept.

© 2003, Coyle, Bardi, and Langley.

5

A supply chain is

a set of three or more firms directly linked by one or more of the _______ and _________ flows of

products, ________, ________, and __________ from a ______ to a ________.

© 1999, Min et al.

6

A basic supply chain is

a firm, an immediate supplier, and an immediate customer directly linked by one or more of the upstream and downstream flows of products,

services,finances, and information.

© 1999, Min et al.

7

SUPPLIER FIRM

DIRECT SUPPLY CHAIN

CUSTOMER

Tommy Hilfiger in Hong Kong

May Department Storesin St. Louis

Sewing shops in Hong Kong

© 1999, Min et al.

8

An extended supply chain includes

suppliers of the immediate supplier and customers of the immediate customer, all linked by one or more of

the upstream and downstream flows of products, services, finances, and information.

© 1999, Min et al.

9

SUPPLIER

EXTENDED SUPPLY CHAIN

CUSTOMER

SUPPLIER’S SUPPLIER

. . .

CUSTOMER’SCUSTOMER

FIRM

. . .

Yarn suppliers inKorea

Sewing shops in Hong Kong

Tommy Hilfiger in Hong Kong

Lord & Taylorin New York

May Department Stores

in St. Louis

© 1999, Min et al.

10

An ultimate supply chain includes

all the firms involved in all the upstream and downstream flows of products, services, finances, and information from the ultimate supplier to the ultimate

customer.

© 1999, Min et al.

11

SUPPLIER

ULTIMATE SUPPLY CHAIN

CUSTOMER

ULTIMATE SUPPLIER

. . .

ULTIMATECUSTOMER

FIRM

. . .

FINANCIAL PROVIDER

THIRD PARTY LOGISTICS SUPPLIER

MARKET RESEARCH FIRM

Tommy Hilfiger

© 1999, Min et al.

12

Cooperative relationships between two companies are distinguished from supply chains, since this type of relationship does not involve any one company in

simultaneous upstream and downstream relationships.

Such dyadic relationships are _____________.

© 1999, Min et al.

13

SELLER BUYER

Channel Partnership

© 1999, Min et al.

14

There is a definite demarcation

between

supply chains as phenomena that exist in business

and

the management of those supply chains.

© 1999, Min et al.

15

Definitions of supply chain management fall into two categories:

Supply Chain Management as a management philosophy

and

Supply Chain Management as a set of activities to implement a management

philosophy both within a firm and across the firms.

© 1999, Min et al.

16

The Supply Chain Philosophy

• An ___________ business philosophy that guides firms to manage the flows from supplier to ultimate user in a synchronized way

• The characteristics of SCM Philosophy:

– A ____________ to viewing the channel as a whole, and to managing the total flow of goods inventory from the supplier to the ultimate customer,

– A ____________ toward ____________ to synchronize and converge intrafirm and interfirm operational and strategic capabilities into a unified whole,

– A _______________ to create unique and individualized sources of customer _______, leading to customer satisfaction.

17

A Supply Chain Orientation is

the implementation by _____ of the systemic, strategic implications of the tactical activities and processes involved in managing the various flows in a supply

chain.

© 1999, Min et al.

18

Supply Chain Management is

the implementation of a supply chain orientation across __________________.

© 1999, Min et al.

19

Supply Chain Management is

the systemic, strategic ___________ of the traditional business functions, the tactics, and the processes

across these business functions within a particular company and across companies within the supply chain, for the purposes of improving the long-term

performance of the ___________ companies and the ______________ as a whole.

© 1999, Min et al.

20

SUPPLY CHAIN MANAGEMENT OVERVIEW

Supply Chain Management

Consequences

• Differential Advantage• Lower Costs• Improved Customer Value and Satisfaction

Supply Chain Orientation

Willingness to address:

Supply ChainPhilosophy

© 1999, Min et al.

21

Logistics in Supply Chain Management

22

Logistics in a Supply Chain Across Firms

“Logistics is _____________________________ that plans, implements, and controls the efficient ____ and _____ of goods, ______, and __________ from the point of _____ to the point of __________ in order to meet customers’ requirements.” (Council of Logistics Management 1998)

23

A View of Business Logistics in a Firm

© 2003, Coyle, Bardi, and Langley.

24

Logistics Management in a Firm’s Generic Value Chain

Source: Michael E. Porter (1985), Competitive Advantage, p. 46

25

Traditional Logistics Management

Suppliers

Mfg.

Distrib.

Customers

Adapted from Langley and Rutner

26

An Example of Traditional Approach: Team Hanes

(Licensed Sports Apparel)

RawMaterial

Inventory

ManufacturerDC

Inventory

RetailerDC

Inventory

In-StoreModelStocks

Production DCReplenishment

StoreReplenishment

ConsumerDemand

Production Orders Retailer Case Orders Store Item Orders

Product Flows Information Flows

Adapted from Langley and Rutner

27

Emergence of Integrated Logistics Concept within a Firm

© 2003, Coyle, Bardi, and Langley.

28

Integrated Logistics Concept in a Supply Chain

© 2003, Coyle, Bardi, and Langley.

29

The Role of Logistics in SCM

• ______________________ – Visibility– Pull systems

• ________________________ – levels must be tailored to each customer– not all customers require the same service

• __________________________– Coordination of supply chain activities may lower the

landed cost.

• ____________________________– Real-time two way information flows– Collaborative planning, implementation, and control of

logistics activities in a supply chain

30

An example of Supply Chain Approach: Team Hanes

BlankGarmentInventory

Team HanesDC

Inventory

In-StoreModelStocks

Production Store ReplenishmentConsumerDemand

Product Flows Information Flows

Adapted from Langley and Rutner

31

Average Throughput Time of Dry Grocery Chain before and after ECR Implementation

© 2003, Coyle, Bardi, and Langley.

32

Inventory Turns & Running Lean

05

101520253035404550

1996 Qtr 4

1997 Qtr 1

1997 Qtr 2

1997 Qtr 3

1997 Qtr 4

CompaqDell

Number of times Dell and Compaq turn inventory over in each quarter, calculated at an annual rate.

© 2003, Coyle, Bardi, and Langley.

33

Total Supply Chain Management Cost (All Sectors)

0

2

4

6

8

10

12

14

1996 1997

Best-in-classMedian

Reven

ue %

© 2003, Coyle, Bardi, and Langley.

34

Remember SCM concepts are Beyond Logistics Management

• Dell Computer's direct relationships with its customers create valuable information that, in turn, allows it to coordinate its entire value chain back through manufacturing to product design (with other firms).

• Wal-Mart, with its customer information and logistics capabilities, functions as a supply chain leader in its supply chain with manufacturers such as Procter & Gamble and the end users.

• Adidas brand is associated with high ideals such as commitment and honesty, and Adidas makes sure these ideal words apply to its supply chain members.

35

… and also remember Logistics Management has been evolving

FROM TO

36

Chapter Summary and Review Questions

So, what is supply chain philosophy?

And SCO and SCM?

Why supply chain-related concepts are gaining popularity today?

What is logistics?

What is the relationship between logistics and supply chain management?

37

Discussion