2 2
Supply Chain All activities associated with the flow
and transformation of goods and services from raw materials to the end user, the customer
A sequence of business activities from suppliers through customers that provide the products, services, and information to achieve customer satisfaction
3 3
The Supply ChainInformation
Cash
Products and Services
Products and Services
Products and Services
Customers
Total satisfaction with quality, price, delivery, and service
Distributors
Package and delivery
Inventory
Producers
Finished goods, end products and services
Inventory
Suppliers
Inventory
Materials, parts, sub-assemblies, and services
4 4
Supply Chain Management
Synchronization of activities required to achieve maximum competitive benefits
Coordination, cooperation, and communication
Rapid flow of informationVertical integration
5 5
Supply Chain Uncertainty
Forecasting, lead times, batch ordering, price fluctuations, and inflated orders contribute to variability
Inventory is a form of insuranceDistorted information is one of
the main causes of uncertainty
6 6
Information in the Supply Chain
Centralized coordination of information flows
Integration of transportation, distribution, ordering, and production
Direct access to domestic and global transportation and distribution channels
Locating and tracking the movement of every item in the supply chain
7 7
Information in the Supply Chain
Consolidation of purchasing from all suppliers
Intercompany and intracompany information access
Data interchange Data acquisition at the point of origin
and point of sale Instantaneous updating of inventory
levels
8 8
Electronic Business Replacement of physical processes
with electronic ones Cost and price reductions Reduction or elimination of
intermediaries Shortening transaction times for
ordering and delivery Wider presence and increased visibility
9 9
Electronic Business Greater choices and more information for
customers Improved service Collection and analysis of customer data
and preferences Virtual companies with lower prices Leveling the playing field for smaller
companies Gain global access to markets & customers
10 10
Electronic Data Interchange
Computer-to-computer exchange of business documents in a standard format
Quick access, better customer service, less paperwork, better communication, increased productivity, improved tracing and expediting, improves billing and cost efficiency
11 11
Bar Codes
Computer readable codes attached to items flowing through the supply chain
Generates point-of-sale data which is useful for determining sales trends, ordering, production scheduling, and deliver plans
1234 5678
12 12
The Internet Instant global access to organizations,
individuals, and information sources Fundamentally changes the way
organizations do business Removed geographic
barriers Adds speed and accessibility
to the supply chain
13 13
Intranets and Extranets
Intranets are internet-like networks that operate within a single organization
Extranets are intranets that can be connected to the global internet
Difference is in who has access to the system
14 14
IT Issues Increased benefits and sophistication
come with increased costs Efficient web sites do not necessarily
mean the rest of the supply chain will be as efficient
Security problems are very real Partnership and trust are important
elements that may be new to business relationships
15 15
Suppliers Purchased materials account for about
half of manufacturing costs Materials, parts, and service must be
delivered on time, of high quality, and low cost
Suppliers should be integrated into their customers’ supply chains
Partnerships should be established On-demand delivery (JIT) is a frequent
requirement
16 16
Sourcing Relationship between customers and
suppliers focuses on collaboration and cooperation
Outsourcing has become a long-term strategic decision
Organizations focus on core competencies
Single-sourcing is increasingly a part of supplier relations
17 17
E-Procurement Business-to-business commerce
conducted on the Internet Benefits include lower transaction costs,
lower prices, reduce clerical labor costs, and faster ordering and delivery times
Currently used more for indirect goods E-Marketplaces service industry-specific
companies and suppliers
19 19
Distribution The actual movement of products and
materials between locations Handling of materials and products at
receiving docks, storing products, packaging, and shipping
Often called logistics Driving force today
is speed Particularly important
for Internet dot-coms
21 21
Distribution Centers and Warehousing
DCs are some of the largest business facilities in the United States
Trend is for more frequent orders in smaller quantities
Flow-through facilities and automated material handling
Final assembly and product configuration may be done at the DC
22 22
Warehouse Management Systems
Highly automated systemsControls item putaway, picking,
packing, and shippingTransportation management,
order management, yard management, labor management, warehouse optimization
23 23
Vendor-Managed Inventory
Manufacturers generate orders, not distributors
Stocking information is accessed using EDI
A first step towards supply chain collaboration
Increased speed, reduced errors, and improved service
24 24
Collaborative Distribution and Outsourcing
Collaborative planning, forecasting, and replenishment (CPFR)
Internet-based exchange of data and information
Significant decrease in inventory levels and more efficient logistics
Companies focus on core competencies
25 25
Transportation
Important element, often overlooked
Common methods are railroads, trucking, water, air, intermodal, package carriers, and pipelines
26 26
Railroads
150,000 miles in USLow cost, high-volume Improving flexibility
intermodal service double stacking
27 27
Most used mode in USFlexible, small loadsConsolidation,
Internet load match sitesPart of TQM supplier-customer
relationshipSingle sourcing reduces number of
trucking firms serving a company
Trucking
28 28
AirRapidly growing segment of
transportation industryLightweight, small itemsQuick, reliable,
expensiveMajor airlines
and US Postal Service, UPS, FedEx, DHL
29 29
Package CarriersFedEx, UPS, US Postal Service, DHLSignificant growth driven by
e-businessesUse several modes
of transportationExpensiveFast and reliable Innovative use of
technologies
30 30
IntermodalCombination of several modes of
transportationMost common are truck/rail/truck
and truck/water/rail/truckEnabled by the
use of containers
31 31
WaterOne of oldest means of transportLow-cost, high-volume, slowBulky, heavy and/or large itemsStandardized shipping containers
improve serviceThe most common
form of international shipping
32 32
PipelinesPrimarily for oil & refined oil
productsSlurry lines carry coal or kaolinHigh capital investmentLow operating costsCan cross difficult terrain