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Supply Chain Management, Supply chain relationship management, Sourcing…

- - - - an understanding of how some of the issues discussed in the context of organisation-to-organisation supply chains can also provide insight into internal process-to-process supply chains
- - - - Quality – The quality of a product or service when it reaches the customer is a function of the quality performance of every operation in the chain that supplied it
      - Speed
        
        How fast customers can be served (the elapsed time between a customer requesting a product or service and receiving it in full)
        
        The time taken for goods and services to move through the chain (the throughput time)
      - Dependability – In supply chain, this is measured as on time and in full
      - Flexibility – In a supply chain context, this is usually taken to mean the chain’s ability to cope with changes and disturbances
      - Cost – in addition to the costs incurred within each operation to transform its inputs into outputs, the supply chain as a whole incurs additional costs that drive from each operation in a chain doing business together
- - - - Keeping inventories low (especially in the downstream parts of the network)
    - - high service levels and responsive supply to the end customer
    - - Predictable
      - Few changes
      - Low variety
      - Stable prices
      - Long lead time
      - Low margins
    - - Opposite to FP
- - - - supply agreement is market-based, with purchases based on relatively short-term arrangements
      - involve purchasing goods and services in a pure market fashion, often seeking the best supplier every time it is necessary to make a purchase
      - Advantages
        
        They maintain competition between alternative suppliers
        
        A supplier specialising in a small number of products or services, but supplying them to many customers, can gain natural economies of scale (therefore enable lower processes than if customers performed the activity themselves on a smaller scale)
        
        There is inherent flexibility in outsourced supplies
        
        Innovations can be exploited, no matter where they originate
      - Disadvantages
        
        Suppliers owe little loyalty to customers
        
        Choosing who to buy from take time and effort
    - - supply agreement is based on long-term, usually exclusive, agreements, the broader trust-based partnership agreement is appropriate
      - Characteristics
        
        Long-term expectations – these are relatively long-term commitments, but not necessarily permanent ones
        
        Sharing success – both partners jointly benefit from the cooperation rather than maneuvering to maximise their own individual contribution
        
        Multiple points of contact – communication is not restricted to formal channels, but may take place between many individuals in both organisations
        
        Joint learning – There is a relationship commitment to learn from each other’s experience
        
        Few relationships – There is a commitment on the part of both parties to limit the number of customers or suppliers with whom they do business
        
        Joint problem solving – fewer relationships allow joint coordination of activities, such as the flow of materials or services, payments etc
        
        Information transparency – Confidence is built through information exchange between the partners
        
        Joint problem solving – Jointly approaching problems can increase closeness over time
        
        Trust – this is probably the key element in partnership relationships
- - - - will allow the business to consider the number of alternative suppliers, how easy it is from one supplier to another, exit barriers, and the cost of bringing operations back in-house
    - - For criticality, managers may consider a product or service component’s importance in terms of volume purchased, percentage of total purchase cost, or the impact on business growth
        
        Product and service criteria
        
        Non-critical – The innertubes (A) account for a relatively low proportion of the total cost of the product and, with the large number of alternative suppliers, the supply risk is low
        
        Bottleneck – The tubing (B) on the bike farm is a particular grade of carbon and is specially moulded for different types of models
        
        Leverage – The carbon-fibre and bars (C) account for a high proportion of the cost of this bicycle but are relatively easy to source as there are a relatively large numbers of available suppliers
        
        Strategic – The groupset (D) refers to the gearing systems on the bicycle
  - - - can be significant savings by sourcing from low-cost country suppliers
      - transportation infrastructures are considerably more sophisticated and cheaper than they once were
    - - The risk of increased complexity
      - Increased distance
  - - - Weighted score
      - Analytical Hierarchy Process
      - Total Cost Ownership - seeks to provide detailed information on all possible costs (rather than simple product or service prices) associated with procurement, to reach more radical decisions during supplier selection
- - - - First-party logistics (1PL) – this is when, rather than outsourcing the activity, the owner of whatever is being transported organises and performs product movements themselves (The logistics activity is an entirely internal process)
      - Second-party logistics (2PL) – this is when a firm decides to outsource or sub-contract logistics services over a specific segment of a supply chain
      - Third-part logistics (3PL) – this is when a firm contracts a logistics company to work with other transport companies to manage its logistics operations (This is a broader concept that 2PL and can involve transportation, warehousing, inventory management and even packaging or repackaging products)
      - Fourth-party logistics (4PL) – is a yet broader idea than 3PL. Accenture, the consulting group, originally used the term 4PL, with their definition of it being: A 4PL is an integrator that assembles the resources, capabilities, and technology of its own organisation and other organisations to design, build, and run comprehensive supply chain solutions
  - - - Providing services and products that are exactly what your customers want
      - Retain existing customers and discovering new ones
      - Offering better customer service
      - Cross-selling products more effectively