2. WHY SUPPLY CHAIN MANAGEMENT
MATTERS
• Different businesses coordinate and each are a different link in the supply chain.
• Good supply chains deliver the right product or service to the right customer at the
right place and the right time, in the right condition, for the lowest total cost.
4. USE A PROCESS FRAMEWORK
• The SCOR model breaks down the supply chain.
• Plan, the processes where you map out how everything in the supply chain is
supposed to work.
• Source, where you build relationships with your suppliers and buy your materials.
• Make, which includes all of the processes for manufacturing or assembly.
• Deliver, the processes for getting your products or services into the hands of your
customers.
• Return, those often overlooked processes for taking back products that your
customers don't need or want.
5. PLAN THE SUPPLY CHAIN
• Four elements at the heart of the supply chain.
• Customers: anyone downstream who is relying on your products/services.
• Products/Services: things that are made and/or delivered to customers.
• Resources: suppliers, facilities, and staff needed to make and deliver products.
• Constraints: deadlines, capacity limitations, etc.
6. SOURCE INPUTS
• Things bought can be categorized as direct or indirect purchases.
• Anything bought that becomes part of the product is direct.
• Anything else bought is indirect.
• Reducing cost is always a goal with either cost type.
7. MAKE PRODUCTS AND SERVICES
• You have to decide what to make, how much to make, how to make it, and when to
make it.
• Operations Management and Production Planning/Control oversee this area.
• When a customer places an order, the supply chain is pulled.
• When a product is made, the supply chain is pushed.
• It’s a constant balancing act between push/pull and constraints.
8. DELIVER PRODUCTS
• Deliver processes fall into 3 categories: order management, transportation,
distribution.
• Order management deals with processes used to take orders from a customer.
• Transportation deals with processes that occur in warehouses and distribution
centers such as packing, receiving, and shipping.
• Distribution entails the trucks, trains, ships, etc. used to get the product to the
customer.
9. RETURN PRODUCTS
• How you design and manage your reverse supply chain can have a big impact on
your relationship with your customers and on the profitability of your business.
• A good process can help you capture the most value from returned products while
also building loyalty with your customers.
10. ENABLE SUPPLY CHAINS
• Enable is really a bucket for all of the other things you need to make a supply chain
work but that don't fit neatly into the first five groups.
• By recognizing the need to align processes with the rest of your supply chain you'll
be building a stronger foundation for implementing supply chain management in
your whole company.
12. PRIORITIZE GOALS
• Supply chain management is about trade offs.
• You must be able to balance keeping costs low, providing quality service, earning a
profit for your business, and being fast-paced/adaptable.
13. CALCULATE TOTAL COSTS
• The power of supply chain management comes from looking across the functions
in your business and working with your customers and suppliers to make sure
you're delivering the most value at the lowest cost.
• By using a total cost to serve approach, you can see the impact of changes on all of
the steps in your process, and make better decisions for your entire supply chain.
14. MANAGE COMPETING GOALS
• Two conflicts occur in almost every supply chain: sales & operations, and customer
& supplier
• Sales & operations usually leads to overproduction or underproduction. We can
resolve this with Sales and Operations Planning where Sales and Operations
managers discuss constraints and goals.
• Customer & supplier usually involves the customer wanting products when and
where they need, and suppliers don’t want to carry too much inventory. To solve
this, suppliers need lots of data and information on customer trends.
15. MITIGATE RISKS
• There’s no such thing as a risk-free supply chain.
• Capture all possible risks, rate them based on severity, and construct plans in case
they were to happen.
• You cannot be overprepared.
16. INVEST IN FLEXIBILITY
• Flexibility is how easy it is for your supply chain to scale up or to scale down to
respond to changes both in upstream supply and downstream demand.
17. INCREASE VISIBILITY WITH A
CONTROL TOWER
• Planning and execution are valuable, but visibility might be even more so.
• The more you know about what's really happening in your supply chain, the better
decisions you can make about what to do next
18. SUPPLY CHAIN INNOVATION
• Two forms: sustaining innovation and disruptive innovation.
• Sustaining innovations are improvements to an existing product, process or service.
• Disruptive innovations introduce a totally different approach that makes the old
process, product or service obsolete.
20. ECOMMERCE, SOCIAL MEDIA,
INTERNET AND DATA TRENDS
• Social media amplifies consumer behavior by making it easy to share product
reviews, recommendations, and endorsements.
• eCommerce often bypasses retail stores, it creates an opportunity for brands to sell
directly to their customers.
• The Internet of Things, customer profiling, big data, cloud computing and analytics
are all super charging supply chains.
21. AI/MACHINE LEARNING, BLOCKCHAIN,
AUTOMATION/ROBOTICS/DRONES
• Artificial intelligence has the potential to make supply chains run faster, better, and
cheaper.
• Blockchains could possibly solve 3 potential problems in supply chain: connect
information from different systems, help with data reliability, generate trust between
trading partners.
• With artificial intelligence, sensors and wireless communications, we're now able to
build machines that know what's happening around them and that can respond
quickly.
23. GET THE RIGHT PEOPLE AND
TECHNOLOGIES
• Preparing the people in your organization starts with training and education.
• Create links between silos by building cross-functional teams, and by developing
balanced score cards.
• Once you have a plan for how your processes are going to mature, then you can
decide which technologies you need to have in place for each step in the journey.
• A technology road map is a great way to plan the evolution of your information
systems and to keep them aligned with your process maturity.
24. COLLABORATE INTERNALLY
• Getting the folks inside of your organization working together, through cross-
functional planning and execution is an important part of making supply chain
management work.
25. COLLABORATE EXTERNALLY
• If your customers are able to share sales and inventory data with you, then you can
do a better job of making sure you have enough inventory to meet their needs but
not more.
• External collaboration can help your company compete effectively and enjoy the
benefits of implementing supply chain management.
26. MANAGE PROJECTS EFFECTIVELY
• Managing projects is the key to implementing change.
• The better you are at managing projects, the easier it will be to make the changes
required for implementing supply chain management into your company.
