Supply Chain Presentationl

7/30/2019 Supply Chain Presentationl

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The Concept of Supply Chain

Management

EIN5346 Logistics ManagementMendez Lynch

Donovan Richards

Maurice Robinson

Vaughn Mignott


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The Concept of Supply Chain Management

where it came from?

The concept of Supply Chain Management is arelatively new concept, prior to the 1990s in relation

to both:- Academic Literature, and- Practitioner Literature

Recognition:

The early to mid-1990s witnessed a growingrecognition that there could be value in coordinatingthe various business functions, both:- Within Organizations, and- Across Organizations


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With this recognition, came into being the

Philosophy of Supply Chain Management."

Recognition (contd):


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What is the Supply Chain Managementconcept? The Supply Chain Management Concept is that

concept that encompasses all activitiesassociated with:

i. Flow and transformation of Goods From the

raw material stage (extraction) through to theend user

ii. Information flows to and from the end user


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What does the Supply Chain Concept

consist of? The Supply Chain Concept consists of all parties

involved (directly and/or indirectly), in fulfilling

customers requests. The parties involved are:- Manufacturers

- Suppliers

- Transporters

- Warehouses- Retailers

- Customers


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The Supply Chain Concept may also include:

- New product development- Marketing

- Operations

- Distribution

- Finance

- Customer service

Supply Chain Concept (contd)


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Types of Supply Chain Configurations

Three types of supply chain configurations arelooked at. These are:

Direct Supply Chain

Extended Supply Chain

Ultimate supply chain


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Direct Supply Chain

Source Prof. Dr. Ted Lees Class Presentation - 2010

Supplier Organization Customer


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2


Extended Supply Chain

SupplierOrganization Customer

Suppliers

suppliers

Customerscustomers


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Ultimate Supply Chain

SupplierOrganization Customer

Ultimate

supplier

Ultimatecustomer

Financial Provider


Market Research

3rd Party Logistic Supplier


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The management of the Supply Chain What is it?Supply chain management, according to theCouncil of Supply Chain ManagementProfessionals, is the:

Planning and Management of all activitiesinvolved in the following:

- Sourcing and procurement

- Conversion

- Logistics management


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This involves coordination, and collaboration withchannel partners such as:

- Suppliers- Intermediaries

- Third party service providers, and

- Customers

In general, Supply Chain Management integratessupply and demand management within and acrossorganization(s)

Management of the Supply Chain (contd)


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Why Manage the Supply Chain?Companies that excel in supply chain managementperform BETTERin every financial measure ofsuccess

Supply-chain excellence improves demand-forecastaccuracy, which results in approximately:

5% higher profit margin

15% less inventory up to 17% stronger perfect order ratings 35% shorter cash-to-cash cycle times than the competition

Source: BusinessWeek (2004)


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1. Planning:

The strategic portion of supply chain management.

A strategy for managing all the resources that goes toward meeting customer

demand for your product or service.

Balances aggregate demand and supply to develop a course of action which bestmeets the requirements for:-Sourcing- Production, and

-Delivery

FIVE BASIC COMPONENT OF SUPPLY CHAIN

MANAGEMENT


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2. Sourcing:

Choose the suppliers that will deliver the goods and services you need to createyour product or service.

Develop a set of pricing, delivery and payment processes with suppliers andcreate metrics for monitoring and improving the relationships.

Put together processes for managing the inventory of goods and services youreceive from suppliers.

BASIC COMPONENT OF SUPPLY CHAIN MANAGEMENT

(contd)


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3. Making: (The manufacturing step. )

Schedule the activities necessary for production, testing, packaging andpreparation for delivery.

Is the most metric-intensive portion of the supply chain, it measures- Quality levels- Production output, and- Worker productivity

4. Delivering: ( The "logistics portion of SCM. )

It Involves:- Coordinating the receipt of orders from customers- Developing network of warehouses- Picking carriers to get products to customers, and

- Set up an invoicing system to receive payments.

BASIC COMPONENT OF SUPPLY CHAIN MANAGEMENT

(contd)


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5. Return: (The problem part of the supply chain. )

Create a network for receiving defective and excessproducts back from customers

Supporting customers who have problems withdelivered products.

BASIC COMPONENT OF SUPPLY CHAIN

MANAGEMENT (contd)


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Key Attributes of Supply Chain

Management Customer Power Customer has become highly

knowledgeable about individual organization and itsproduct as well as about competing organizationsand products

Long-term Orientation Seeks relationalexchanges rather than transaction exchanges

Leveraging Technology Supply chains can bevery complex entities which require appropriatetechnology to maximize shareholder wealth andreduce costs. This as opposed to what obtained

historically.


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Enhanced communication across OrganizationAccurate, real time, seamless information flow withinand across organizations is necessary as Supply chainrelies on high volumes of information

Inventory Stock Better control flow of inventorywith fewer inventory lumps and also reduction in theamount of physical inventory

Inter-organizational Collaboration Supplychain as a whole has the objective of optimizing theperformance of the entire supply chain rather thanindividual organization

Attributes of Supply Chain Management (contd)


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Typical Supply Chain


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With all that have been said

previously, What does this Mean?

It requires a superior abilityto shape and respond toshifts in demand withinnovative products andservices

Supply chain managementmeans more than just lowcosts and high efficiency and

effectiveness


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Supply Chain Management Trends

Demand Driven Supply Network (DDSN)

Lean Manufacturing

Radio Frequency Identification (RFID)

Transportation & logistics


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Demand Driven Excellence

A system of technologies and processes thatsenses and responds to real time demand signalsacross a network of customers, suppliers and

employees


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Demand Driven Overlapping Principles

Supply management Manufacturing,logistics and sourcing

Product management R&D, engineering andproduct development

Defining characteristics of supply chains built todemand driven principles results in the ability tomanage demand rather than just respond to it

Demand management Marketing, salesand service


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Operational and Innovation Excellence

Two basic dimensions of measurement capture thetotality of the best-in-class, demand-driven, global

supply chain:

Operational excellence

Innovation excellence


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This involves: Reaching the ultmate in the execution of business processes

When practiced, business is conducted in a manner that:

- Satisfies customer demand

- Improves quality

- Generates higher yields

- Faster throughput &

- Eliminate waste

Operational excellence


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Innovation is the key and critical factor toward betterresults.

In today's competitive world an organization desiringdifferent outcomes, without innovation the likelihood ofachieving extraordinary results is greatly diminished

Innovation is rooted in the PDCA principle PLAN

DO

CHECK

ADJUST

Also referred to as the cycle of continual improvement.

Innovational Excellence


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Operational and Innovation Excellence


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The Hierarchy of Supply Chain Metrics:

Operational Excellence


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The Hierarchy of Supply Chain Metrics:

Innovation Excellence


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Lean Manufacturing

Most companies have peacefully reconciled themandate to work lean while employing the latestsoftware to streamline processes and gain new

visibility over the supply chain

Remove waste

Reduce inefficiencies


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Lean Manufacturing


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Radio Frequency Identification

RFID technology uses radio waves to read dataput on a chip embedded within a tag.

Primarily used for identification and tracking

Monitor product location at all time, updating

both planning and execution systems


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RFID in Practice


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Transportation & Logistics


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Transportation & Logistics

Physical movement of goods and services

Companies need to adopt a strategic

transportation sourcing (STS) approach

Strategic sourcing considers costs within thetotal manufacturing and distribution supply and

demand environment

Companies sometimes outsource thetransportation activities


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Supply Chain Top 10 Companies

Source: Gartner (2010)


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Financial Metrics Used to Rank SCM

Top 10

ROA Net income/total assets

Inventory turns Cost of goods sold/inventory

Revenue growth Change in revenue from prior

year


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Supply Chain Management - Challenges

A number of impediments may affect the effective implementationof Supply Chain Management systems, despite the optimisticattractive futuristic perspective of such chain. These impedimentsinclude:

Regulatory and Political Considerations Regulations may preventsome chains from entering certain markets. Also, events such as warmay affect supply chain management systems

Lack of top management commitment Top management might beuncomfortable with one or more of the underpinnings of the supplychain management

Reluctance to share and/or use relevant information Might not bewilling to share data that is propriety in nature


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Incompatible information systems Eg. Computer softwares

Incompatible corporate cultures Must be comfortable withhoworganizations in the supply chain dobusiness

Globalization Supply chains have increasingly becomeglobal in nature, due to, amongst other reasons, lower price ofmaterial and labor.

However, with globalization, there come cultural, economic,technological, political , spatial, and logistical challenges.

Which may affect the fulfillment of customer demands.

Challenges (contd)


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Recommendations Apply demand-driven principles in order to sense, shape and

respond to changes in market demand.

Take a cue from the leaders when designing your own supplychain strategy. Define how many supply chain types you have

and design a customized response for each.

Balance operational excellence with innovation excellence forsuperior overall performance.

Focus on acquiring, mentoring, growing and retaining supplychain talent.

Measure your supply chain as your customer experiences it.This will ensure continuous improvement


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Make individual and collective decision regarding action in the following areas:

Production:What product does the market wants, how much and by when.

Inventory:What inventory should be stocked at each stage of the supply chain and howmuch of each type.

Location:Where should facilities for production and inventory storage be located to bemost cost effective

Transportation:How should inventory be moved from one supply chain location to another

Information:

How much data should be collected and how much information should beshared.

Recommendations(contd.)


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Bibliography

http://www.gartner.com/technology/supply-chain/top25.jsp

http://www.businessweek.com/adsections/2004/pdf/0416_supplychain.pdf

http://www.pwc.com/gx/en/transportation-logistics

http://www.amrresearch.com

http://www.ariba.com

http://www.ifsna.com

http://www.ipsmartpackaging.com

http://www.matrics.com

http://www.peoplesoft.com

http://www.sap.com

http://www.myyellow.com

http://www.zebra.com

Contemporary Logistics 9th Edition - by Paul R. Murphy, JR. & Donald F. Wood
http://www.zebra.com/http://www.zebra.com/

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