Supply Chain Management 19981168 Kim Jeong-hwan 20021053 Kim Yong-ki 20041261 Jeong Hee-jin IENG 381- MIS Term-project Spring 2005 Industrial Management.

SupplyChain

Management19981168 Kim Jeong-hwan

20021053 Kim Yong-ki

20041261 Jeong Hee-jin

IENG 381- MIS Term-projectSpring 2005

Industrial Management Engineering in Postech

1 What is SCM?1

What is Supply Chain Management ?1

Industrial and Management Engineering POSTECH, Korea

DefinitionA set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantitiesright quantities, to the right locationright location, and at the right the right timetime, in order to minimize system wide costs while satisfying service level

requirement.

Customer Relationship Management

Satisfaction of ordering

Supply

Management production

Management customer services

Management demand

1 Motivation ?!2

Motivation ?!2

Industrial and Management Engineering POSTECH, Korea

•Practical implementations have fallen short of theoretical recommendations.•That is while many companies have tried to establish efficiently SC integration, few companies have succeeded in establishing SC integration, and there is no consensus as to what these terms mean

Answer on the following Research Questions* What processes of integration should be pursued in a SC?* What should be first among such SC integration processes?

The Resolution of Gap between Theoretical Recommendation and practical implementation

1 Concepts on SCM !3

Concept on SCM !3

Industrial and Management Engineering POSTECH, Korea

Distribution Network Configuration

Inventory Control

Supply Contracts Product Design

Information Technology

Customer Value

Concept on SCM !31) Distribution Network Configuration

Consider several plants producing products to serve a set of geographically dispersed retailers.

2) Inventory Control Consider a retailer that maintains an inventory of a particular product.

3) Supply Contracts Relationships between suppliers and buyers are established by means of supply contracts

that specify pricing and volume discounts, delivery lead times, quality, returns, and so on.

Industrial and Management Engineering POSTECH, Korea

4) Product Design Effective design plays several critical roles in the SC.

5) Information Technology Information technology is a critical enabler of effective SCM.

6) Customer Value The measure of a company’s contribution to its customer, based on the entire range.

1 Market Situation4

Market Situation4 Market Situation of the World

Leads ‘enterprise solution market’ with CRM Rapid growth in the last 3 years (3billions of US$ ) U.S. and Europe lead world market Asia market is expected to grow steadily

Industrial and Management Engineering POSTECH, Korea

Sal

es (

mill

ions

$)

Market Situation4 Until 1999 : Market generation stage In 2000 : Maximum expectation Since 2002 : Market stabilization and growth

Vis

ion

Time

Introduction of the New Technology

Maximum Expectation

Bubble Breaking

Stabilization

Maximum Effectiveness

SCM

ERP

Market Situation of Korea Enter into the growth period through the introduction stage Main Target : Companies over annual sales of $500 million Rapid growth in spite of the depressed economy after 2000

Industrial and Management Engineering POSTECH, Korea

1 Case Study Wal-mart5

Study Case (Wal-mart)5 Wal-mart Case

EDLP(EveryDay Low Price) policy Low Price VS. Low Cost Differentiated Supply Chain

73.0%(27.0%)

22.7%

4.3%

77.8%(22.2%)

15.8%

6.4%

Industrial and Management Engineering POSTECH, Korea

K-mart Wal-mart

Cost of Goods Sold( Gross Income )

Selling expenses & Administrative expenses

Operating Income

Study Case (Wal-mart)5 Supply Chain of Wal-mart

1. Cross-Docking System1. Cross-Docking System

2. Private Transportation Systemon System2. Private Transportation Systemon System

3. POS (Point of Sales) System 3. POS (Point of Sales) System

Industrial and Management Engineering POSTECH, Korea

1 Future Expansion6

Future Expansion of the Concept 6

ESCM USCM

Increasing Visibility & Customer Satisfaction