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Chapter 14 Supply chain management

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Supply Chains 2 Supply Chain The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function

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Supply Chains 3 Supply Chain Management Supply Chain Management A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value

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Benefits of Supply Chain Management 10 Supply chain oriented companies commonly report: Lower inventory, transportation, warehousing, and packaging costs Greater supply chain flexibility Improved customer service Higher revenues Increased profitability

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Supply Chain Integration 5 Material and service supplier Integration Internal Operations Integration Customer Integration Relationship Integration Measurement Integration Technology and planning Integration Firm-to-Firm Social Interactions Operational Planning and Control Customer Integration

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Key Processes of Supply Chain Management 6

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Customer Relationship Management 7 Customer Relationship Management Process Customer Relationship Management Process The prioritization of a firms marketing focus on different customer groups according to each groups long-term value to the company or supply chain; designed to identify and build relationships with good customers.

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Customer Service Management 8 Customer Service Management Process Customer Service Management Process A multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced; designed to ensure that customer relationships remain strong.

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Demand Management 9 Demand Management Process Demand Management Process The alignment of supply and demand throughout the supply chain to anticipate customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior.

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Order Fulfillment 10 Order Fulfillment Process Order Fulfillment Process A supply chain management process that involves generating, filling, delivering, and providing on-the-spot service for customer orders.

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Manufacturing Flow Management 11 Manufacturing Flow Management Process Manufacturing Flow Management Process A process that ensures that firms in the supply chain have the resources they need

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Supplier Relationship Management 12 Supplier Relationship Management Process Supplier Relationship Management Process A supply chain management process that supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers

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Product Development and Commercialization 13 Product Development and Commercialization Process Product Development and Commercialization Process The group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms.

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Returns Management 14 Returns Management Process Returns Management Process A process that enables firms to manage volumes of returned product efficiently, while minimizing costs and maximizing the value of the returned assets to the firms in the supply chain.

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Logistical Components of the Supply Chain Supply Chain Team Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Materials Handling Transportation Logistics Information System

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Sourcing and Procurement Plan purchasing strategies Develop specifications Select suppliers Negotiate price and service levels Reduce costs The Role of Purchasing:

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Production Scheduling Push / Pull Strategy Traditional Focus Push Start of Production Manufacturing Inventory- Based Mass Production Customer Focus Pull Customer-Order Based Mass Customization

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Just-in-Time Manufacturing A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line. JIT

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Benefits of JIT Reduces raw material inventories Shortens lead times Creates better supplier relationships Reduces production and storeroom costs Reduces paperwork

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Order Processing Information technology that replaces paper documents that accompany business transactions with electronic transmission of the information. Electronic Data Interchange

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Order Processing A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturers or a customers demand. Inventory Control System Inventory Control System

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Order Processing Materials Requirement Planning (MRP) Materials Requirement Planning (MRP) An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. Distribution Resource Planning (DRP) Distribution Resource Planning (DRP) An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer. An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer.

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Materials Handling Functions Receive goods into warehouse Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment Identify, sort, and label goods

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Transportation Airways Water Pipelines Motor Carriers Railroads

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Transportation Mode Choice 25 Cost Transit time Reliability Capability Accessibility Traceability