Module 1 Intro SCM

8/17/2019 Module 1 Intro SCM

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What is a Cadena desuministroA supply chain consists of the ow of products

and services from:• Raw materials manufacturers• Component and intermediate manufacturers• Final product manufacturers• Wholesalers and distributors and

• RetailersConnected by transportation and storage

activities, andIntegrated through information, planning,

and integration activitiesany large !rms are moving away fromin"house #ertically Integrated structuresto $upply Chain anagement

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What is a $upply Chain% &Cont'(

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What is $upply Chainanagement% )he design and management of seamless, value"

added processes across organi*ational boundariesto meet the real needs of the end customer

Institute for Supply Management

anaging supply and demand, sourcing rawmaterials and parts, manufacturing and assembly,warehousing and inventory trac+ing, order entry

and order management, distribution across allchannels, and delivery to the customerThe Supply Chain Council

)he planning and management of all activitiesinvolved in sourcing and procurement, conversion,and all logistics management activities alsoincludes coordination with channel partners,which can be suppliers, intermediaries, third partyservice providers, and customers'

Council of Supply Chain ManagementProfessionals

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What is $upply Chainanagement% &Cont'(

• Old paradigm - Firm gained synergy as a verticallyintegrated !rm encompassing the ownership andcoordination of several supply chain activities'-rgani*ational cultures emphasi*ed short"term,company focused performance'

• New paradigm - Firm in a supply chain focusesactivities in its area of speciali*ation and enters intovoluntary and trust"based relationships with supplierand customer !rms'

• All participants in the supply chain bene!t'• .oundaries are dynamic and e/tend from 0the !rm1s

suppliers1 suppliers to its customers1 customers &i'e',second tier suppliers and customers('2

• $upply chains now deal with reverse logistics tohandle returned products, warranty repairs, andrecycling'

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Importance of $upply Chainanagement

Firms have discovered value"enhancing andlong term bene!ts

Who bene!ts most% Firms with:• 3arge inventories• 3arge number of suppliers• Comple/ products• Customers with large purchasing budgets

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Importance of $upply Chainanagement &Cont'(

Firms using $upply Chain anagement:

4' $tart with +ey suppliers5' ove on to other suppliers,

customers, and shippers6' Integrate second tiersuppliers and customers&second tier refers to thecustomer1s customers andthe supplier1s suppliers(

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Importance of $upply Chainanagement &Cont'(

Cost savings and better coordination ofresources are reasons to employ $upplyChain anagement

• Reduced .ullwhip 78ect" the magni!ed reduction of

safety stoc+ costs based on coordinated planning andsharing of information• Collaborative planning, forecasting, and replenishment

activities reduce the .ullwhip 78ect and lead to bettercustomer service, lower inventory costs, improved9uality, reduced cycle time, better productionmethods, and other bene!ts'

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-rigins of $upply Chain anagement1950s & 1960s

'$' manufacturers focused on massproduction techni9ues as their principalcost reduction and productivityimprovement strategies

1960s-19 0s

Introduction of new computer technologylead to development of aterialsRe9uirements ;lanning & R;( and

anufacturing Resource ;lanning & R;II( to coordinate inventory managementand improve internal communication

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-rigins of $upply Chainanagement &Cont'(

19!0s & 1990sIntense global competition led '$'manufacturers to adopt

$upply Chain anagement alongwith


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-rigins of $upply Chain anagement>Cont'

"000s an# $eyon#Industrial buyers will rely more onthird-party service providers(3PLs) to improve purchasing andsupply management

Wholesalers?retailers will focus ontransportation and logistics more @refer to these as quick response,service response logistics, and integrated logistics

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-rigins of $upply Chain anagement>Cont'

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)he Foundations of $upplyChain anagement

SupplyManagement

Supplier management, supplierevaluation, supplier certification,strategic partnerships

Operations

eman! management, "#$, %#$,inventor& visi'ilit&, ()* + - leanpro!uction . *o&ota $ro!uctionS&stem/, * " + - Si Sigma/

Distribution

*ransportation management, customerrelationship management, !istri'ution

net or , perfect or!er fulfillment, glo'alsuppl& chains, service responselogistics

Integration $rocess integration, performancemeasurement12


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)he Foundations of $upplyChain anagement &Cont'(

Purchasing Tren#s%• Long term relationships• Supplier management- improve performance

through • Supplier e aluation &determining supplier capabilities(• Supplier certi'cation &third party or internal certi!cation

to assure product 9uality and service re9uirements(• Strategic partnerships- successful and trusting

relationships with top"performing suppliers

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Important 7lements of $upplyChain anagement &Cont'(

(perations Tren#s%

• )eman# management- matchdemand to available capacity

• 3in+ing buyers @ suppliers viaMRP and RP systems

• se !"# to improve the “ pull ” ofmaterials to reduce inventorylevels

• 7mploy #$M to improve 9ualitycompliance among suppliers

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Important 7lements of $upplyChain anagement &Cont'(

)istri*ution Tren#s%• Transportation management- tradeo8

decisions between cost @ timing ofdelivery?customer service via truc+s, rail, water @air

• Customer relationship management- strategies to ensure deliveries, resolvecomplaints, improve communications, @determine service re9uirements

• +et,or #esign- creating distri%utionnet&ork s based on tradeo8 decisions betweencost @ sophistication of distribution system

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Important 7lements of $upply Chainanagement &Cont'(

Integration Tren#s%• Supply Chain Process Integration- when supply chain

participants wor+ for common goals' Re9uires intra!rm functional integration' .ased on e8orts to change attitudes @adversarial relationships

• Supply Chain Performance Measurement- Crucial for!rms to +now if procedures are wor+ing

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Current )rends in $upply Chainanagement

./pan#ing the Supply Chain• '$' !rms are e/panding partnershipsand building facilities in foreign mar+ets

• )he e/pansion involves:• %readth " foreign manufacturing, o ce @

retail sites, foreign suppliers @ customers• depth " second and third tier suppliers @

customers

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Current )rends in $upply Chainanagement &Cont'(

Increasing Supply Chain esponsi eness• Firms will increasingly need to be more e/ibleand responsive to customer needs

• $upply chains will need to %enchmark industryperformance and meet and improve on acontinuous basis

• Responsiveness improvement will come from moree8ective and faster product @ service deliverysystems

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Current )rends in $upply Chainanagement &Cont'(

The reening of Supply Chains" ;roducing, pac+aging, moving, storing, delivering and

other supply chain activities can be harmful to theenvironment

• $upply chains will wor+ harder to reduce

environmental degradation• 3arge maBority & DE( of '$' consumers in uenced bya !rm1s environmental friendliness reputation

• Recycling and conservation are a growing alternativein response to high cost of natural resources

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Current )rends in $upply Chainanagement" Cont'

e#ucing Supply Chain Costs• Cost reduction achieved through:

• Reduced purchasing costs• Reducing waste• Reducing e/cess inventory, and• Reducing non"value added activities

• Continuous Improvement through• $enchmar ing- improve over competitors1 performance• )rial @ error• Increased +nowledge of supply chain processes

2009 South estern, a !ivision ofengage earning 20

Documents

Module 1 Intro SCM