Innovative and Integrated Supply Chains in the 21 st Century Innovative Supply Chains Principles (Pre-Meeting) Dr. Manu Vora, ASQ Fellow and CQE Chairman and President, Business Excellence, Inc., USA Advisor of Eminence, Business Excellence, ASQ India, New Delhi, India Adjunct Faculty, School of Professional Studies, Northwestern Univ., USA Adjunct Faculty, Great Lakes Institute of Management, Chennai, India ASQ Section 1208, Warrenville, IL, 11/03/15
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Innovative and Integrated Supply Chains
in the 21st Century
Innovative Supply Chains Principles (Pre-Meeting)
Dr. Manu Vora, ASQ Fellow and CQE
Chairman and President, Business Excellence, Inc., USA
Advisor of Eminence, Business Excellence, ASQ India, New Delhi, India Adjunct Faculty, School of Professional Studies, Northwestern Univ., USA
Adjunct Faculty, Great Lakes Institute of Management, Chennai, India
ASQ Section 1208, Warrenville, IL, 11/03/15
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Introduction Importance of Supply Chain Management
(SCM) Conventional to Contemporary Supply
Chain Drivers of Supply Chain Performance Supply Chain Performance Measurements Major References
25th Annual State of US Logistics - 2013
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Importance of Supply Chain: Logistics in the Manufacturing Firm
Profit 4%
Logistics Cost 21%
Marketing Cost 27%
Manufacturing Cost 48%
Profit
Logistics Cost
Marketing Cost
Manufacturing Cost
Typical Supply Chains
Supply Chain Configuration
Supply Chain Configuration
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Push/Pull View of Supply Chains
Procurement, Manufacturing and Replenishment cycles
Customer Order Cycle
Customer Order Arrives
PUSH PROCESSES PULL PROCESSES
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Supply Chain Decisions: Structuring Drivers
Strategy (Design)
Planning
Operation
A Framework for Structuring Drivers
Competitive Strategy
Supply Chain Strategy
Efficiency Responsiveness
Facilities Inventory Transportation
Information
Supply chain structure
Cross Functional Drivers
Sourcing Pricing
Logistical Drivers
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Role of Inventory in the Supply Chain Improve Matching of Supply
Customer order response time Customer perception of supply chain value
Internal Business Process: Value added time/total time in supply chain No. of choices/order cycle time
Learning & Growth: Time between product finalization and customer delivery No. of shared data sets/total data sets
Financial: SC costs of purchasing, inventory, poor quality & delivery failure % of SC target costs achieved % SC profits earned Cash-to-cash cycle time Return on supply chain assets
Source: “Principles of Supply Chain: A Balanced Approach”, Wisner et al., Thompson, South-Western, 2005.
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Major References Sunil Chopra and Peter Meindl (2012). Supply Chain Management: Strategy, Planning, and Operation, 5th Edition,
Prentice Hall, Upper Saddle River, NJ. Manu K. Vora (2015). 7 Steps to Link Quality Improvement to Your Supply Chain, Supply Chain Management Review,
Vol. 19, No. 4, pp. 44-51, July/August, Framingham, MA. Reuben E. Slone, J.. Paul Dittmann, & John T. Mentzer (2010). The New Supply Chain Agenda: The 5 Steps that Drive Real
Value, Harvard Business Press, Boston, MA , 2010. “The Reverse Supply Chain” by V. Daniel R. Guide, Jr. and Luk N. Van Wasenhove, HBR Reprint No. F0202D – 2/2002. “Rapid-Fire Fulfillment” by Kasra Ferdows, Michael A. Lewis, and Jose A.D. Machuca, HBR Reprint No. R0411G ($3.70) – 11/2004. “Aligning Incentives in Supply Chains” by V. G. Narayanan and Ananth Raman, HBR Reprint No. 8363 – 11/2004. “Mass Customization at Hewlett-Packard: The Power of Postponement” by Edward Feitzinger and Hau L. Lee, HBR Reprint No.
97101 – 1-2/1997. “What is the Right Supply Chain for Your Product?”, Marshall L. Fisher, HBR Reprint No. 8509 – 3-4/1997. “Fast, Global, and Entrepreneurial: Supply Chain Management, Hong Kong Style” by Joan Magretta, HBR Reprint No. 2020 - 8-
9/199 “The Power of Virtual Integration: An Interview with Dell Computer’s Michael Dell” by Joan Magretta, HBR Reprint No. 7907 – 3-
4/1998. “The Achilles’ Heel of Supply Chain Management” by Ananth Raman, Nicole DeHoratius, and Zeynep Ton, HBR Reprint No. F0105C
– 5/2001. “How to Ensure Information Integrity for Effective and Economic Health Care” by Vijay V. Mandke, Sharon R. Miller, Paul R.
Prabhaker, Manu K. Vora, and Nila M. Vora, AHIMA 2003 National Convention, Minneapolis, MN, 10/21/2003. “Deep Change: How Operational Innovation Can Transform Your Company” by Michael Hammer, HBR reprint No. 6573 – 4/2004.