This document discusses supply chain planning and scheduling. It begins by defining a supply chain and outlining the objectives of supply chain management. It then describes the three decision phases of supply chain management: supply chain strategy/design, supply chain planning, and supply chain operations. Finally, it discusses the process view of supply chains using the cycle view and push/pull view and analyzes value within a supply chain.

1. Supply Chain Planning
&
Scheduling

2. Outline
 Introduction of SCM
 Objectives of SC
 Decision Phases of SCM
 Process View of SCM
 Value Chain Analysis
2

3. 1-3
What is a Supply Chain?
 All stages involved, directly or indirectly, in
fulfilling a customer request
 Includes manufacturers, suppliers,
transporters, warehouses, retailers & customers
 Typical supply chain stages: customers,
retailers, distributors, manufacturers, suppliers

4. Objectives of Supply Chain Management
 Objective is to maximize the overall value
generated
 Value = Final Product Worth to customer
– Cost incurred in Supply Chain
4

5. Decision Phases of SCM
 Phase 1: Supply Chain Strategy or Design
 Phase 2: Supply Chain Planning
 Phase 3: Supply Chain Operation
5

6. Phase 1: Supply Chain Strategy or Design
6
 Long Term in Nature
 What it involves:
 Outsource or in-house
 Location and capacities of production and warehousing facilities
 Products to be manufactured or stored at various locations
 The modes of transportation to be used
 Type of information system to be utilized.
 It is based on:
 Strategic Objectives
 Marketing and Pricing Plan

7. Phase 2: Supply Chain Planning
 Planning decisions:
 Which markets will be supplied from which
locations
 Planned buildup of inventories
 Timing and size of market promotions
 Must consider in planning decisions demand
uncertainty, exchange rates, competition over
the time horizon

8. Phase 3: Supply Chain Operation
 Time horizon is weekly or daily
 Decisions regarding individual customer orders
 Goal is to implement the operating policies as
effectively as possible
 Allocate orders to inventory or production, set order
due dates, generate pick lists at a warehouse, allocate
an order to a particular shipment, set delivery
schedules, place replenishment orders

9. Process View of SCM9

10. 1-10
Process View of a Supply Chain
 Cycle view: processes in a supply chain are
divided into a series of cycles, each performed
at the interfaces between two successive
supply chain stages
 Push/pull view: processes in a supply chain
are divided into two categories depending on
whether they are executed in response to a
customer order (pull) or in anticipation of a
customer order (push)

11. Cycle View of Supply Chains
Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer
Retailer
Distributor
Manufacturer
Supplier

12. Push/Pull View of Supply Chains
Procurement,
Manufacturing and
Replenishment cycles
Customer Order
Cycle
Customer
Order Arrives
PUSH PROCESSES PULL PROCESSES

13. Push/Pull View of
Supply Chain Processes
 Supply chain processes fall into one of two
categories depending on the timing of their
execution relative to customer demand
 Pull: execution is initiated in response to a
customer order (reactive)
 Push: execution is initiated in anticipation of
customer orders (speculative)

14. Value Chain Analysis14

15. Value Chain Analysis
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 Primary Activities
 Operations
 After Sale Services
 Marketing and Sales
 Distribution
 New Product Development
Support Activities:
Finance
Accounting
Information Technology
Human Resources

16. New
Product
Development
Marketing
and
Sales
Operations Distribution Service
Finance, Accounting, Information Technology, Human Resources
The Value Chain: Linking Supply
Chain and Business Strategy

17. How is Strategic Fit Achieved?
 Step 1: Understanding the customer
 Step 2: Understanding the supply chain
 Step 3: Achieving strategic fit

18. Step 1: Understanding the Customer
 Understanding the Customer
 Availability
 Lot size
 Response time
 Service level
 Product variety
 Price
 Innovation

19. Step 2: Understanding the SC
 How does the firm best meet demand?
 Supply chain responsiveness -- ability to
 respond to wide ranges of quantities demanded
 meet short lead times
 handle a large variety of products
 build highly innovative products
 meet a very high service level

20. Step 3: Achieving Strategic Fit
 All functions in the value chain must support
the competitive strategy to achieve strategic fit
 Two extremes: Efficient supply chains
(Toyota) and responsive supply chains (Dell)

21. Comparison of Efficient &
Responsive Supply Chains
Efficient Responsive
Primary goal Lowest cost Quick response
Pricing strategy Lower margins Higher margins
Mfg strategy High utilization Capacity flexibility
Inventory strategy Minimize inventory Buffer inventory
Lead time strategy Reduce but not at expense
of greater cost
Aggressively reduce even if
costs are significant
Supplier selection strategy Cost and low quality Speed, flexibility, quality
Transportation strategy Greater reliance on low cost
modes
Greater reliance on
responsive (fast) modes