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  • L8

    1. 1. Supply Chain
    2. 3. Supply Chain Options
    3. 4. Supply Chain Strategies <ul><li>Low Cost single supply chain for all products and customers </li></ul><ul><li>Differentiation unique supply chains by product or customer groups </li></ul><ul><li>Responsiveness customer focused, information technology for speed and reengineering, advanced logistics planning </li></ul><ul><li>Portfolio Approach supply chain platforms (analogy: manufacturing cells) </li></ul>
    4. 5. Customers and capabilities <ul><li>Understanding the customer and supply chain uncertainty </li></ul><ul><li>Understanding the supply chain capabilities </li></ul><ul><li>Achieving strategic fit </li></ul><ul><ul><li>Redesign the supply chain </li></ul></ul><ul><ul><li>Alter strategy </li></ul></ul>
    5. 6. Causes of demand variations <ul><li>Quantity of the product needed in each lot </li></ul><ul><li>Response time that customers are willing to tolerate </li></ul><ul><li>Variety of products needed </li></ul><ul><li>Service level required </li></ul><ul><li>Price of the product </li></ul><ul><li>Desired rate of innovation in the product </li></ul>
    6. 7. Implied demand uncertainties Increases because a wider range of the quantity required implies greater variance in demand Increases because there is less time in which to react to orders Increases because demand per product becomes more disaggregate Increase because the total customer demand is now disaggregated over more channels Increases because new products tend to have more uncertain demand Increase because the firm now has to handle unusual surges in demand Range of quantity required increases Lead time decreases Variety of products required increases Number of channels for product acquisition increases Rate of innovation increases Required service level increases Implied Demand Uncertainty Customer Needs
    7. 8. Supply uncertainty Increases Increases Increases Increases Increases Increases Frequent breakdowns Unpredictable and low yields Poor quality Limited supply capacity Inflexible supply capacity Evolving production process Supply Uncertainty Supply Source Capability
    8. 9. Efficiency/responsiveness Dell: Custom-made PCs and servers in a few days Highly responsive Most automotive production: Delivering a large variety of products in a couple of weeks Somewhat responsive Hanes apparel: A traditional make-to-stock manufacturer with production lead time of several weeks Somewhat efficient Integrated steel mills: Production scheduled weeks or months in advance with little variety or flexibility Highly efficient
    9. 11. Supply Chain Matching Match Mismatch Mismatch Match Functional Products Innovative Products Efficient Supply Chain Responsive Supply Chain
    10. 12. Supply Chain Dynamics 2-tier Supply Chain Bull-Whip Effect Manufacturer Retailer Consumer
    11. 13. Supply Chain Dynamics
    12. 14. Causes of Bullwhip <ul><li>Number of tiers in supply chain </li></ul><ul><li>Order arrival lead time </li></ul><ul><li>Forecast variations </li></ul><ul><li>Order batching </li></ul><ul><li>Capacity constraints </li></ul><ul><li>Price increase </li></ul>
    13. 15. Elements of strategy <ul><li>Structure and Ownership </li></ul><ul><li>Infrastructure and Process Alignment </li></ul><ul><li>Sustaining advantage </li></ul>
    14. 16. Structure & Ownership <ul><li>Supply chains for individual products (multiple markets) </li></ul><ul><ul><li>Saturn car, collaborative product design, outsourcing </li></ul></ul><ul><li>Supply chains for individual markets (multiple products) </li></ul><ul><ul><li>Geographical region (China), customer segments, logistics </li></ul></ul><ul><li>Product and Process Matching </li></ul><ul><li>Channel Design </li></ul><ul><ul><li>Business models </li></ul></ul>
    15. 17. Electronic proximity
    16. 18. Business model <ul><li>Partners </li></ul><ul><ul><li>PC Supplier </li></ul></ul><ul><ul><li>Ford Motor Company </li></ul></ul><ul><ul><li>Ford Employees </li></ul></ul><ul><ul><li>Buyer-Club </li></ul></ul><ul><ul><li>Vendors in Buyer-Club </li></ul></ul>
    17. 19. The model <ul><li>PC Associates acquire PCs at a discount </li></ul><ul><li>PCs are given to Ford for its employees free of charge </li></ul><ul><li>Ford pays $25 per month for Internet access per employee, but charges $5 per month from the employees </li></ul><ul><li>Employees belong to the buyer-club on the PCA web page </li></ul><ul><li>Vendors join the buyer-club to take advantage of economies of scale. Buyers are given Price Discounts </li></ul><ul><li>Buyer-Club profits are shared three ways: Vendors, PCA, and Ford </li></ul>
    18. 20. Process Alignment <ul><li>Managing Material Flow </li></ul><ul><ul><li>demand assessment, inventory location and sharing, supplier contracts </li></ul></ul><ul><li>Coordination and Control </li></ul><ul><ul><li>monitoring and accountability, troubleshooting </li></ul></ul><ul><li>Managing Flow of Information </li></ul><ul><ul><li>routing, access and transparency, distributed-databases, strategic/operational </li></ul></ul><ul><li>Leveraging Connectivity </li></ul><ul><ul><li>EDI/shareware/Intranet, online learning, transaction-speed, waste-reduction </li></ul></ul>
    19. 21. Telecommunication Supply Chain
    20. 22. Sustaining Advantage <ul><li>Agility/responsiveness </li></ul><ul><ul><li>inventory network and transshipment </li></ul></ul><ul><ul><li>modular product design </li></ul></ul><ul><ul><li>restructuring </li></ul></ul><ul><li>Redesigning the chain </li></ul><ul><ul><li>information technology and logistics </li></ul></ul><ul><ul><li>changes in customer preferences </li></ul></ul><ul><ul><li>new in-house capabilities or acquisitions </li></ul></ul><ul><ul><li>experience curve, environment scanning </li></ul></ul>