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Dr K. ROUIBAH Chapter 11 (QM 240) / dept QM
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Dr K. ROUIBAH Chapter 11 (QM 240) / dept QM


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  • 1. Chapter 11 Objectives
    • How do enterprise systems provide value for businesses?
    • How do supply chain management systems provide value for businesses?
      • 11.1. Enterprise systems (p. 380-383)
      • 11.2 . Supply chain management systems (p. 384-393)
  • 2. How Enterprise Systems Work
    • ISs that integrate and coordinate key internal processes of the firms, integrating data from different business functions
    • Enables data to be used by multiple functions and business processes for precise organizational coordination and control.
  • 3. Enterprise system architecture
  • 4. Benefits of Enterprise Systems
    • Firm structure and organization: A more uniform organization
    • Management: More efficient operations and customer-driven business processes – Firm-wide knowledge-based management processes
    • Firm-wide information for improved decision making - Technology: Unified IT platform
  • 5. The Supply Chain vs. Supply Chain Management (SCM)
    • Supply Chain
    • A network of organizations and business processes of procuring material, transforming raw materials into intermediate and finished products, and distributing the finished product to customers
    • Materials, information, and payments flow through the supply chain in both directions.
    • Supply Chain Management (SCM)
    • Coordination of business processes to speed information, product, and fund flows up and down a supply chain to reduce time, redundant effort, and inventory costs
  • 6. Supply Chain Management Systems
  • 7. Supply Chain Processes
    • SCOR (Chain Operations Reference Model) identifies five major supply chain processes:
    • 1-Plan : Balancing demand and supply to meet sourcing, production, and delivery requirements
    • 2-Source: Procurement of goods and services needed to create a product or service
    • 3-Make: Processes that transform a product into a finished state
    • Deliver: Processes to manage order transportation and distribution
    • 5- Return: Processes associated with product returns and post delivery customer support
    • Logistics: Planning and control of all factors that have an impact on the supply chain
  • 8. Supply Chain Processes
  • 9. Information and Supply Chain Management
    • Problem of supply chain
    • Inaccurate or untimely information causes inefficiencies in supply chain, such as shortages, excessive inventory
    • Objective of supply chain management is to overcome bullwhip effect ( أثر كرة الثلج )
    • There are several solution: Just-in-time
    • Just-in-time strategy
    • Scheduling system for minimizing inventory by having:
    • (A) components arrive exactly at the moment they are needed and
    • (B) finished goods shipped as soon as they leave the assembly line
  • 10. Bullwhip effect
    • Distortion of information about the demand for a product as it passes from one entity to the next across the supply chain
  • 11. Supply Chain Management Applications [ need to find useful examples-based on my background _OR ]
    • Supply chain management systems
    • Automate flow of information between company and supply chain partners (suppliers, logistics partners)
    • Supply chain planning systems
    • Generate demand forecasts for a product (demand planning) and help develop sourcing and manufacturing plans for that product
    • Supply chain execution systems
    • Manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner
    • E.g. Agility when it delivers product to Jamayyats in Kuwait
  • 12. Supply Chain Performance Measurement
    • Metrics for measuring supply chain performance
    • Fill rate (the ability to fill orders by the due date)
    • Average time from order to delivery
    • The number of days of supply in inventory
    • Forecast accuracy
    • The cycle time for sourcing and making a product (total elapsed time to complete a business process)
  • 13. Supply Chain Management Systems / Intranets and Extranets for Supply Chain Management
  • 14. Supply Chain Management Systems (cont’)
    • Internet-based supply chain management applications:
    • Provide standard set of tools
    • Facilitate global supply chains
    • Reduce costs
    • Enable efficient customer response
    • Allow concurrent supply chains
    • Two types of demand-driven supply chain management: Push & Pull
  • 15. Push- versus Pull-Based Supply Chain Models Replenish =Refill
  • 16. Supply Chain Management Systems (cont’)
    • Push-based model
    • Production master schedules based on forecasts of demand for products, and products are “pushed” from manufacturer to customers
    • Pull-based model
    • Supply chain driven by actual customer orders or purchases
    • It is also called demand-driven model or build-to-order
  • 17. The Future Internet-Driven Supply Chain The model is not any more sequential …Random
  • 18.
    • Improved customer service and responsiveness
    • Cost reduction
    • Cash utilization
    Business Value of Supply Chain Management Systems
  • 19. Business Value of Supply Chain Management Systems (cont’)