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Week 2 Supply Chain Management introduction - Coggle Diagram
Week 2 Supply Chain Management introduction
What is a Supply Chain?
Flow of products and services from
Suppliers
Raw materials manufacturers
Intermediate goods manufacturers
Finished goods manufacturers
Distributors and wholesalers
Retailers
Customers
Connected through transportation, information, and exchanges of funds
A Basic Supply Chain
Goods flow
raw material component parts
basic finished goods
customized products
information flow
suppliers--manufacturers--wholesalers,warehousers---retailers---consumers
shipping schedules items and quantities
master production schedule shipping schedule daily production quotas
inventory status custom configurations postpone strategy
POS data promotional plans inventory status custom product req's
Managing a Supply Chain is Not Easy
Geographically dispersed complex network
Conflicting objectives across the supply chain
Manufacturer--Large production--batches
Distributor--Low inventory--Few DCs
Retailer--Few stores---Low inventory--Little variety--Close to DCs
Customer---Convenience---Short lead time--Large variety of products
Uncertainty and risk factors
Natural disasters
Social factors------Strikes, economic downturns, political crises, war, Epidemies
negative impact on net income and financial statements
regulatory penalties leading to delays and fines
brand reputation damages(recalls, legal action etc)
shipping/transportation challenges that impact your ability to achieve strategic goals or objectives
Information distortion
Manufacturer----demand information is far removed from actual customer demand
regional distributor----regional distributor's demand information flows to manufacturer
local distributor----local distributor's demand information only flows to regional distributor
retailer----retailer's demand information only flows to local distributor
information distortion-----bullwhip effect
Supply chain partners can benefit by sharing information on sales, demand forecasts, inventory levels & marketing campaigns
Inaccurate or distorted information leads to the Bullwhip Effect
If information isn’t shared, everyone has to guess what is going on downstream.
Guessing wrong leads to too much or too little inventory:
If too much, firms hold off buying more until inventories fall (leading suppliers to think demand has fallen).
If too little, firms demand a rush order & order more than usual to avoid being caught short in the future (leading suppliers to think demand has risen).
Factors which have critical impact on supply chain strategy design
SCM must consider the following trends, improved capabilities, & realities:
Consumer Expectations and Competition
– power has shifted to the consumer
Globalization
– capitalization on emerging markets
Technology
– e-commerce, Internet, EDI, AI, IoT, BigData
Government Regulations
- like trade barriers
Environment Issues
– e.g. waste minimization, traffic bans
Top 3 Business challenges of supply chain management at all times
cost containment&reduction
demand variability(forecasting)
inventory management&optimization
SC strategy design
What markets/channels will the firm compete in, and on what basis?
What are the long-term and short-term business goals ?
What are the budgetary and macro economic resource constraints?
How will the resources be allocated to functional groups and business units?
How do customers see us? (customer satisfaction perspective)
Do we have gaps in our operations?
Can we continue to improve and create value? (innovation perspective)
How can we contribute to shareholders? (financial perspective)
from supply chain strategy to supply chain capabilities
business strategy---strategy chain strategy---efficiency&responsiveness
logistical----facilities--inventory--transportation
cross functional---information--sourcing---pricing
SCM strategy preparations
EXTERNAL ANALYSIS
ENVIRONMENTAL ANALYSIS(political, economic,sociocultural,technological,environmental, legal)
EXTERNAL OPPORTUNITY
INTERNAL ANALYSIS
RESOURCE ANALYSIS
tangible(financial, physical)
intangible(technology, reputation, culture)
human(skills/know-how. communication and collaboration, motivation)
organizational capabilities
Decision making in Supply Chain Management
Successful supply chain management requires decisions on the flow of information, product, and funds that fall into three decision phases: Supply chain strategy or design---Supply chain planning----Supply chain operation
Decision Phases in a Supply Chain
Strategic--year
Supply chain network design (How many plants? Location and capacities of plants and warehouses?)
Supply chain strategies (Sell direct or through
retailers? Outsource or in-house? Focus on cost or customer service?)
Product mix at each plant
Tactical--3 mon-year
Workforce & Production planning
Inventory policies (safety stock level)
Which locations supply which markets
Transportation strategies
Operational--daily
Production scheduling
Decisions regarding individual orders
Place replenishment orders
Decision making process starts with...
Understanding the sequence and relation of the processes and flows in the supply chain
Cycle view
, The processes in a supply chain are divided into a series of cycles, each performed at the interface between two successive stages of a supply chain
Cycle view defines the processes involved and the owner of each process
Retailer--Customer---Customer Order Cycle
Customer Arrival
Cstomer Order Entry
Customer Order Fullfillmen
Customer Order Receiving
Distributor---Replenishment Cycle
Retail Order Trigger
Retail Order Entry
Retail Order Fullfillment
Retail Order Receiving
Manufacturer--- Manufacturing Cycle
Order Arrival
Production Scheduling
Manufacturing/Shipping
Receiving
Supplier---Procurement Cycle
Component Order Arrival
Production Scheduling
Manufacturing/Shipping
Receiving
Subprocesses in Each Cycle: Supplier markets the product--Buyer places an order--Supplier receives the order--Supplier supplies the order--Buyer receives the order--Buyer may return the product
Push/pull view
,The processes in a supply chain are divided into two categories depending on whether they are executed in response or in anticipation of a customer order
pull process---execution is initiated in response to customer orders(reactive)
customer order arrives
push process---execution is initiated in anticipation of customer orders(speculative投机的)
Processes are divided based on the timing of their execution relative to a customer order
Supply Chain Macro Processes
Supply chain processes discussed in the two views can be classified into--Customer Relationship Management (CRM)+Internal Supply Chain Management (ISCM)+Supplier Relationship Management (SRM)
Integration among the above three macro processes is critical for effective and successful supply chain management
SRM--Supplier---source, negotiate, buy, design collaboration, supply collaboration
ISCM---firm---strategic planning, demand planning, supply planning, fulfillment, field service
CRM---customer--market, price, sell, call center, order management
Challenges of SCM in 2020
Potential economic downturn
Tailored services
Increasing omni-channel trend in e-commerce
Continuous alignment issues
Impact of technology and innovation
Big data deployment(data analytics)
Talent acquisition and maintenance
Supply Chain related organizations
SCM Organizations CLM - Council of Logistics Management (now Council of Supply chain management)
APICS - American Production Inventory Control Society (now American Operations Management Society)
POMS–ProductionOperationsManagementSociety
SOLE - Society of Logistics Engineers IIE - Institute of Industrial Engineers
INFORMS – The US Society of OR & Management Science
Zara
Zara’s Procurement team doesn’t work and are not measured on the number of finished clothes but on the quantity of raw materials needed to manufacture the clothes.
Proximity of suppliers
Local manufacturing : saves time and provides flexibility and rapid response
Customer as co-creator : Everyday, store managers give customer feedback to the market specialists, who then pass the information along to production & design teams. This rapid feedback loop enables a quick and agile response to the market.
Standardization in product definition and information