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