Chap12

Chapter 12 Supply Chain Management

Supply Chain Management (SCM) ,[object Object],[object Object],[object Object]

US Suppliers Off Shore Suppliers US Factory Singapore Factory US DC European DC Asia/Pacific DC Americas Demand European Demand Asia/Pacific Demand Kit Suppliers

Traditional Supply Chain Flows ,[object Object],[object Object],Supplier Retailer Distributor Manufacturer 3 4

Examples of Supply Chains ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Need for Supply Chain Management

Supply Chain Design ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Right Supply Chain Strategy? ,[object Object],[object Object]

A Framework for Devising the Right Supply Chain Strategy ,[object Object],[object Object],[object Object],Functional Innovative Stable Evolving

High obsolescence Low obsolescence High stock out cost Low stock out cost Low volumes per SKU Higher volume per SKU High product variety Low product variety High profit margins Low profit margins High inventory cost Low inventory cost Short selling season Long product life Variable demand Stable demand Difficult to forecast More predictable demand High demand uncertainties Low demand uncertainties Innovative Functional Demand Uncertainty and Product Characteristics

Variable lead time Dependable lead time Inflexible Flexible Difficult to changeover Easier to changeover Potential capacity constrained Less capacity constraint More process changes Less process changes Unreliable suppliers Reliable suppliers Limited supply sources More supply sources Potential quality problems Less quality problems Variable and lower yields Stable and higher yields Vulnerable to breakdowns Less breakdowns Evolving Stable Supply Characteristics

Computers, semiconductor some food produce (Evolving Process) Telecom, high-end Hydro-electric power, High computers, pop music food, oil and gas (Stable Process) Fashion apparel, Grocery, basic apparel, Low Supply Uncertainty High (Innovative Products) Low (Functional Products) Demand Uncertainty The Uncertainty Framework: Examples

(Xilinx, Cisco) (Subway) (Evolving Process) Agile supply chain Risk-hedging supply chains High (Dell, Benetton) (Posco, Barilla) (Stable Process) Responsive supply chains Efficient supply chain Low Supply Uncertainty High (Innovative Products) Low (Functional Products) Demand Uncertainty Achieving Strategic Fit

Drivers of Supply Chain Fit Inventory Transportation Facilities Information Drivers Efficiency Responsiveness Supply Chain Structure

Considerations for Supply Chain Drivers Proximity / Flexibility Consolidation / Dedicated Facilities Speed Consolidation Transportation Availability Cost of holding Inventory Responsiveness Efficiency Driver Information What information is best suited for each objective

Dealing with-Multiple Owners / Local Optimization ,[object Object],[object Object]

[object Object],Lack of Information Coordination: Bull-Whip* Effect Customer Demand Retailer Wholesaler Distributor Distributor Orders Manufacturer Retailer Orders Wholesale Orders

Lack of Information Coordination: Bull-Whip* Effect Manufacturer Distributor Wholesaler Retailer Ordering Amount of inventory =

Possible Solutions ,[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],Creating an Effective Supply Chain Contractual Coordination

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Value and Limitations of Contractual Coordination manufacturer retailer customers $ w / unit $ p / unit $ c / unit

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],Single firm customers $ p / unit $ c / unit

manufacturer retailer customers $ 6 / unit $ 12 / unit $ 3 / unit Single firm customers $ 12 / unit $ 3 / unit Order quantity Total profit 30 units $ 195 ( Ret. = 100, Mfr. = 95 ) 42.5 units $ 213.75 comparisons

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Lessons

Critical Trends in Global SCs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Paradoxes of Complexities ,[object Object],[object Object],[object Object],[object Object],[object Object]

Supply Chain Risk Drivers ,[object Object],[object Object],Capacity ,[object Object],[object Object],Inventory ,[object Object],[object Object],Procurement ,[object Object],[object Object],Intellectual Property ,[object Object],[object Object],Forecast ,[object Object],[object Object],Systems ,[object Object],[object Object],Delays ,[object Object],[object Object],Disruptions Drivers of Risk Categories of Risk

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object]

Chap12

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