Supply Chain Management
17 Supply Chain Management <ul><li>Project Draft due April 2 </li></ul><ul><li>Review Items from Last Class </li></ul><ul>...
Supply Chain Strategy   and the Course Organization  Operations As a Competitive  Weapon Operations Strategy Project Manag...
Supply Chain <ul><li>(goods) </li></ul><ul><li>The sequence of processes from raw materials through manufacturing and dist...
Supply Chain Example Raw materials End users upstream downstream
A Global Supply Chain  Fiber supplier in Australia Textile Maker in Italy Zipper Maker in China Apparel Maker in Mauritius...
Definitions and Terminology I <ul><li>Supply Chain  </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Upstream a...
Definitions and Terminology II <ul><li>Logistics management </li></ul><ul><li>Distribution Channel </li></ul><ul><li>Deman...
Logistics Management <ul><li>Broad definition = supply chain management </li></ul><ul><li>Narrowly definition = transport ...
Distribution Channel <ul><li>The route from the producer forward (down stream) through the distributors to the customer </...
Demand Management <ul><li>Managing the demand for goods or services along the supply chain. </li></ul><ul><li>Demand can b...
Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 3 Legend
Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 3 Tier 2 Legend
Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend
Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend Manufacturer
Supply Chain Including Distribution Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend Dist...
Supply Chain Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend Customer Customer Customer ...
Outsourcing  <ul><li>Buying a part or service that previously was provided internally </li></ul><ul><ul><li>Make-or-buy de...
Offshoring <ul><li>Moving a process or operation that had been done in the “home country” to another country </li></ul><ul...
Video <ul><li>UPS Supply Chain Services </li></ul><ul><li>What services are they talking about? </li></ul><ul><ul><li>Pack...
E-Commerce and Supply Chains <ul><li>Supply chain information movement is increasingly electronic: </li></ul><ul><ul><li>O...
Types of e-procurement <ul><li>On-line catalogs listing products, prices, etc. </li></ul><ul><li>Third-part auctions—rever...
Supply Chain links in Enterprise Resource Planning Systems (like SAP in the this picture)
Supply Chain Strategy <ul><li>Starts with “make or buy” </li></ul><ul><li>Partner vs vendor </li></ul><ul><li>Lowest cost ...
Single Sourcing <ul><li>Purchase from very few (or one) supplier </li></ul><ul><li>More control of quality </li></ul><ul><...
Global Supply Chain <ul><li>Look for best sources anywhere </li></ul><ul><ul><li>Provide supplier with technology if neces...
Uncertainty In Supply Chains <ul><li>Wrong forecasts </li></ul><ul><li>Supplier Stock-outs </li></ul><ul><li>Late deliveri...
Supply Chain Objectives <ul><li>Cost  </li></ul><ul><li>Quality  </li></ul><ul><li>Delivery </li></ul><ul><li>Speed </li><...
Virtual Corporation <ul><li>A corporation that has: </li></ul><ul><ul><li>No hard assets (contract for production, etc.) <...
Supply Chain / Industry Structure for US Electronics and Computer Companies End Users Brand Owner / Designers Contract Man...
Dell’s  Order Fulfillment Process
Some Reasons for Contract Mfg. Growth <ul><li>Brand owner focus on product definition and design </li></ul><ul><li>Contrac...
(From T. Sturgeon)
Trouble in Paradise <ul><li>Background </li></ul><ul><li>What is the key issue? </li></ul><ul><ul><li>Conflict in goals of...
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Supply Chain Management

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  • Supply Chain Management

    1. 1. Supply Chain Management
    2. 2. 17 Supply Chain Management <ul><li>Project Draft due April 2 </li></ul><ul><li>Review Items from Last Class </li></ul><ul><li>Basic Supply Ideas and Terminology </li></ul><ul><li>Video </li></ul><ul><ul><li>UPS Supply Chain Management </li></ul></ul><ul><li>Supply Chain Strategy </li></ul><ul><li>Electronics and Computer Supply Chains </li></ul><ul><li>Case Discussion – Trouble in Paradise </li></ul>
    3. 3. Supply Chain Strategy and the Course Organization Operations As a Competitive Weapon Operations Strategy Project Management Process Strategy Process Analysis Process Performance and Quality Constraint Management Process Layout Lean Systems Supply Chain Strategy Location Inventory Management Forecasting Sales and Operations Planning Resource Planning Scheduling
    4. 4. Supply Chain <ul><li>(goods) </li></ul><ul><li>The sequence of processes from raw materials through manufacturing and distribution to the ultimate consumer. </li></ul><ul><li>A “process” takes place at a single site or least within the same firm </li></ul><ul><li>(services) </li></ul><ul><li>Some analogies for services </li></ul>
    5. 5. Supply Chain Example Raw materials End users upstream downstream
    6. 6. A Global Supply Chain Fiber supplier in Australia Textile Maker in Italy Zipper Maker in China Apparel Maker in Mauritius Apparel Designer and Marketer in US Carriers and Intermediaries Carriers and Intermediaries Retailer in US Material flow Information flow Raw materials End users upstream downstream
    7. 7. Definitions and Terminology I <ul><li>Supply Chain </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Upstream and Downstream </li></ul><ul><li>Information and Material Flow </li></ul>
    8. 8. Definitions and Terminology II <ul><li>Logistics management </li></ul><ul><li>Distribution Channel </li></ul><ul><li>Demand management </li></ul><ul><li>Supplier Tiers </li></ul><ul><li>Outsourcing </li></ul><ul><li>Off-Shoring </li></ul>
    9. 9. Logistics Management <ul><li>Broad definition = supply chain management </li></ul><ul><li>Narrowly definition = transport and storage (not production, sourcing, etc.) </li></ul>
    10. 10. Distribution Channel <ul><li>The route from the producer forward (down stream) through the distributors to the customer </li></ul>
    11. 11. Demand Management <ul><li>Managing the demand for goods or services along the supply chain. </li></ul><ul><li>Demand can be managed through such mechanisms as product availability promises, pricing, promotion, and distributor incentives. </li></ul>
    12. 12. Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 3 Legend
    13. 13. Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 3 Tier 2 Legend
    14. 14. Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend
    15. 15. Supplier Tiers Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend Manufacturer
    16. 16. Supply Chain Including Distribution Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend Distribution center Distribution center Manufacturer
    17. 17. Supply Chain Figure 8.2 Supplier of materials Supplier of services Tier 1 Tier 3 Tier 2 Legend Customer Customer Customer Customer Distribution center Distribution center Manufacturer
    18. 18. Outsourcing <ul><li>Buying a part or service that previously was provided internally </li></ul><ul><ul><li>Make-or-buy decision </li></ul></ul><ul><ul><li>Allows management to focus on firms “core competencies” (same as “distinctive competencies” we talked about earlier) </li></ul></ul><ul><ul><li>+other reasons </li></ul></ul><ul><li>Insourcing </li></ul><ul><ul><li>Undoing an outsourcing decision </li></ul></ul>
    19. 19. Offshoring <ul><li>Moving a process or operation that had been done in the “home country” to another country </li></ul><ul><ul><li>Comparative labor costs </li></ul></ul><ul><ul><li>Logistics costs </li></ul></ul><ul><ul><li>Tariffs and trade barriers </li></ul></ul><ul><ul><li>Better access to offshore markets </li></ul></ul><ul><ul><li>Local subsidies </li></ul></ul><ul><ul><li>… </li></ul></ul><ul><li>Offshoring can be In-house or Outsourced </li></ul>
    20. 20. Video <ul><li>UPS Supply Chain Services </li></ul><ul><li>What services are they talking about? </li></ul><ul><ul><li>Package delivery </li></ul></ul><ul><ul><li>What else? </li></ul></ul><ul><ul><li>“Economy of Scope” </li></ul></ul><ul><li>Importance of Information Technology </li></ul>
    21. 21. E-Commerce and Supply Chains <ul><li>Supply chain information movement is increasingly electronic: </li></ul><ul><ul><li>Order, Invoice, Ship Notice, Payment, etc </li></ul></ul><ul><ul><li>EDI, other protocols </li></ul></ul><ul><li>e-Procurement – slow adoption </li></ul><ul><ul><li>Business “E-bay” </li></ul></ul>
    22. 22. Types of e-procurement <ul><li>On-line catalogs listing products, prices, etc. </li></ul><ul><li>Third-part auctions—reverse auctions </li></ul><ul><li>Private exchanges to connect suppliers </li></ul>
    23. 23. Supply Chain links in Enterprise Resource Planning Systems (like SAP in the this picture)
    24. 24. Supply Chain Strategy <ul><li>Starts with “make or buy” </li></ul><ul><li>Partner vs vendor </li></ul><ul><li>Lowest cost vs highest quality vs fast vs reliable delivery vs quickest response to changing needs </li></ul><ul><li>Can be a key strategic differentiator </li></ul><ul><ul><li>Example: Wal-Mart </li></ul></ul>
    25. 25. Single Sourcing <ul><li>Purchase from very few (or one) supplier </li></ul><ul><li>More control of quality </li></ul><ul><li>Partnering for development </li></ul><ul><li>Partnering for production investments </li></ul>
    26. 26. Global Supply Chain <ul><li>Look for best sources anywhere </li></ul><ul><ul><li>Provide supplier with technology if necessary </li></ul></ul><ul><li>Assess transport and import costs and supply disruption risk </li></ul>
    27. 27. Uncertainty In Supply Chains <ul><li>Wrong forecasts </li></ul><ul><li>Supplier Stock-outs </li></ul><ul><li>Late deliveries </li></ul><ul><li>Poor quality/wrong product </li></ul><ul><li>Breakdowns and strikes </li></ul><ul><li>Canceled orders </li></ul><ul><li>Erroneous information </li></ul>
    28. 28. Supply Chain Objectives <ul><li>Cost </li></ul><ul><li>Quality </li></ul><ul><li>Delivery </li></ul><ul><li>Speed </li></ul><ul><li>Flexibility </li></ul>
    29. 29. Virtual Corporation <ul><li>A corporation that has: </li></ul><ul><ul><li>No hard assets (contract for production, etc.) </li></ul></ul><ul><ul><ul><li>Might supply capital </li></ul></ul></ul><ul><ul><li>No employees (contract for services, even management services and product design) </li></ul></ul><ul><li>But controls the brand and supply chain for its products or services </li></ul><ul><li>Core competencies </li></ul><ul><ul><li>Structuring and Managing a Supply Chain and Brand </li></ul></ul><ul><ul><li>Raising capital (maybe) </li></ul></ul>There are no corporations that match this definition, but many businesses are moving in this direction
    30. 30. Supply Chain / Industry Structure for US Electronics and Computer Companies End Users Brand Owner / Designers Contract Manufacturers Tiers of Parts Suppliers Dell, HP, Apple, Lenovo SCI, Flextronics, Solectron Individuals, Bulk buyers Retailers / Distributors PC Warehouse, Comp USA Intel, Kingston, Intex Tech, Seagate
    31. 31. Dell’s Order Fulfillment Process
    32. 32. Some Reasons for Contract Mfg. Growth <ul><li>Brand owner focus on product definition and design </li></ul><ul><li>Contract manufacturer has economy of scale </li></ul><ul><ul><li>Greater automation and process R&D investment </li></ul></ul><ul><li>Contract manufacturer has less vulnerability to ups and downs of brand owners </li></ul>
    33. 33. (From T. Sturgeon)
    34. 34. Trouble in Paradise <ul><li>Background </li></ul><ul><li>What is the key issue? </li></ul><ul><ul><li>Conflict in goals of JV partners; structure of the JV </li></ul></ul><ul><ul><li>Conflict between Chinese and US ways of management; hard to transplant Six Sigma, etc </li></ul></ul><ul><ul><li>Cut throat competition in the Chinese market </li></ul></ul><ul><ul><li>Mikes lack of leadership in implementing Six Sigma, establishing outside relationships </li></ul></ul><ul><li>Team group discussion: </li></ul><ul><ul><li>How can operations be improved? </li></ul></ul><ul><ul><li>What should Mike do? </li></ul></ul><ul><li>Report out </li></ul>
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