Decision Phases in SC

8/8/2019 Decision Phases in SC

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DECISION PHASIS IN SUPPLYDECISION PHASIS IN SUPPLY

CHAINCHAIN1.1. Supply chain strategy or designSupply chain strategy or design::

long term decisions of next several yearslong term decisions of next several years

such as resources allocation, location,such as resources allocation, location,capacities, production, warehousingcapacities, production, warehousingfacilities & transportation facilities.facilities & transportation facilities.


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2. Supply chain planning2. Supply chain planning: Decisions: Decisionsrelated to quarter to a year, forecast,related to quarter to a year, forecast,

demand, which market, which locations,demand, which market, which locations,inventory policies, subcontracting, size ofinventory policies, subcontracting, size ofpromoting, uncertainty in demand,promoting, uncertainty in demand,

exchange rateexchange rate


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3.Supply chain operations:3.Supply chain operations: TheThe timetimehorizon here is weekly or daily, makeshorizon here is weekly or daily, makes

decisions regarding individual customerdecisions regarding individual customerorders, allocate inventory or production toorders, allocate inventory or production toindividual orders, set a date that an orderindividual orders, set a date that an order

is to be filled, shipping mode & shipment,is to be filled, shipping mode & shipment,delivery schedule of trucks & placedelivery schedule of trucks & placereplenishment orders.replenishment orders.


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PROCESS VIEW OF SUPPLY CHAINPROCESS VIEW OF SUPPLY CHAIN

Cycle ViewCycle View Customer order cycleCustomer order cycle

Replenishment cycleReplenishment cycle Manufacturing cycleManufacturing cycle

Procurement cycleProcurement cycle

Push/Pull viewPush/Pull view Push: processes are initiated & performed inPush: processes are initiated & performed in

anticipation of customer orderanticipation of customer order

Pull: processes are initiated by customer order.Pull: processes are initiated by customer order.


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Customer Order CycleCustomer Order Cycle

1.1. Customer arrivalCustomer arrival Customer walks into the mallCustomer walks into the mall

Customer calls a mail order telemarketing centerCustomer calls a mail order telemarketing center Web page, electronic linkWeb page, electronic link

2.2. Customer order entry (it should be quick &Customer order entry (it should be quick &accurate)accurate)

InformationInformation

list of productslist of products

quantitiesquantities


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Customer Order Cycle ContinCustomer Order Cycle Contin

3. Customer order fulfillment3. Customer order fulfillment Customer order is filled and sent to theCustomer order is filled and sent to the

customercustomer packaging & shippingpackaging & shipping

4. Customer order receiving4. Customer order receiving The customer receive the order and takesThe customer receive the order and takes

the ownership.the ownership.

Records of the receipt updated and paymentRecords of the receipt updated and paymentcompleted.completed.


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Replenishment CycleReplenishment Cycle

It occurs at the retailer and distributorsIt occurs at the retailer and distributorsinterface, in order to meet the futureinterface, in order to meet the future

demand.demand.1.1. Retail order triggerRetail order trigger

Ordering policyOrdering policy

Economies of scaleEconomies of scale

Balancing product availabilityBalancing product availability

The cost of holding inventoryThe cost of holding inventory


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Replenishment Cycle Contin.Replenishment Cycle Contin.

1.1. Retail order entry:Retail order entry: Is similar to customer order entry, the diff is thatIs similar to customer order entry, the diff is that

the retailer is placing the order to distributorthe retailer is placing the order to distributor2.2. Retail order fulfillmentRetail order fulfillment

Is similar to customer order fulfillment except that itIs similar to customer order fulfillment except that ittakes place at the distributors end.takes place at the distributors end.

3.3. Retail order receiving.Retail order receiving. Physically receiving the stock and updating it.Physically receiving the stock and updating it.


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Manufacturing CycleManufacturing Cycle

It occurs at the retailer/manufacturer orIt occurs at the retailer/manufacturer ordistributor/ manufacturer interface.distributor/ manufacturer interface.

It also depends upon the pull (Customer order )It also depends upon the pull (Customer order )and push processes (anticipating customerand push processes (anticipating customerdemand).demand).

It includes following stepsIt includes following steps

1.1. Order arrival:Order arrival: In the step distributors sets order based onIn the step distributors sets order based onforecasting, product availability pull/push process.forecasting, product availability pull/push process.

The order is conveyed to manufacturer.The order is conveyed to manufacturer.


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Manufacturing Cycle Contin.Manufacturing Cycle Contin.

2. Production scheduling2. Production scheduling Orders are allocated to production planOrders are allocated to production plan On time production keeping cost downOn time production keeping cost down

3. Manufacturing and shipping3. Manufacturing and shipping Manufacturer produces to the production schedule.Manufacturer produces to the production schedule. Product is shipped to the customer, retailer,Product is shipped to the customer, retailer,

distributor or finisheddistributor or finished--product warehouse.product warehouse.

4. Receiving at the distributors, retailers or4. Receiving at the distributors, retailers orcustomer end.customer end. Physically checking and receiving, storage & fundPhysically checking and receiving, storage & fund

transfer out.transfer out.


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Procurement CycleProcurement Cycle

It take place at manufacture/supplierIt take place at manufacture/supplierinterfaceinterface

Top quality materialTop quality material Lowest available priceLowest available price Timely deliveryTimely delivery Minimum lead timeMinimum lead time


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Push/Pull View of Supply chainPush/Pull View of Supply chain

processprocessAll processes in supply chain fall into twoAll processes in supply chain fall into twocategories depending on the timing ofcategories depending on the timing of

their execution relative to end customertheir execution relative to end customerdemand.demand.

Pull: execution initiated in response to aPull: execution initiated in response to acustomer order. E.g Durring assemblycustomer order. E.g Durring assembly

Push: execution initiated in anticipation ofPush: execution initiated in anticipation ofcustomer order. Before PC assemblycustomer order. Before PC assembly

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Decision Phases in SC