Coyle Chapter 1 PowerPoint Slides

Chapter 1: Supply Chain Management:

An Overview

Learning ObjectivesAfter reading this chapter, you should be able to do the following:

• Discuss the major change drivers in our economy and in the global marketplace.

• Understand the rationale for the development of supply chain management in leading organizations.

• Appreciate the importance and role of supply chain management among private and public organizations.

Learning Objectives (cont.) Understand the contributions of a supply chain approach to organizational

efficiency and effectiveness.

Analyze the benefits that can accrue from implementing effective supply chain practices.

Understand the major challenges and issues facing organizations developing and implementing supply chain strategies.

Five major external forces seem to drive the rate of change and shape our economic and political landscape:

globalization

technology

organizational consolidation

the empowered consumer

government policy and regulation

Physical supply Physical distributionmaterials management outbound logistics inbound logistics

Development of the Supply Chain Concept Started in the 1960s with the development of the physical distribution

concept Initial focus on physical distribution or outbound logistics was logical

since finished goods During the 1980s, the logistics or integrated logistics management

concept developed in a growing number of organizations The underlying logic of the systems or total cost concept was also the

rationale for logistics management Supply chain management can be viewed as a pipeline or conduit for

the efficient and effective flow of products/materials, services, information, and financials

Major Supply Chain Issues Supply Chain Networks

The network facilities and supporting transportation is important

Increased complexity for organizations is a problem Inventory Deployments

inventory duplication the bullwhip effect

Collection and storage of vast amounts of data Cost/Value

efficiency (cost) and effectiveness (value) prevention of suboptimization

Organizational Relationships Tradeoffs and optimization

Performance Measurement Why and how

Major Supply Chain IssuesTechnology

challenge is to evaluate and successfully implement the technology

Transportation Management right product, right time, right quantity, right quality,

right cost, right destination

Supply Chain Security concern and potential challenge since 9/11

Cash flow has become one of the most important measures of financial viability in today’s global markets. Supply chains are an important determinant of improved cash flow since they impact order cycle time to customers.

Supply chains are an important determinant of capital consumption since they impact working capital, inventory levels, and other assets such as warehouses.

Efficient and effective supply chains can free up valuable resources and improve customer fulfillment systems so as to increase return on investment or assets and improve shareholder value.

The rate of change in our economy has accelerated the necessity of continuing changes in organizations or even transformation to remain competitive.

Chapter 1 Summary

The rate of change has been driven by a set of external forces including but not limited to globalization, technology, organizational consolidation and shifts in power in supply chains, an empowered consumer, and government policy and regulations.

The conceptual basis of the supply chain is not new. In fact, organizations have evolved from physical distribution management to logistics management to supply chain management.

Supply chains need to focus on the customers at the end of the supply chain and be flexible and responsive.

Technology is important to facilitate change, but it must follow a process and educate people to address problems and issues appropriately.

Chapter 1 Summary (cont.)

Transportation management and security have become increasingly important in the twenty-first century because of changes that have occurred.

Supply chains are boundary spanning and require managing three flows—products, information, and financials (cash).

Supply chain management is a journey, not a goal, and there are no “silver bullets” since all supply chains are unique.

Information is power, and collaborative relationships internally and externally are a necessary ingredient for success.

The performance of supply chains must be measured in terms of overall corporate goals for success.

Chapter 1 Summary (cont.)