Plan and manage customer demand Improve customer service through increased flexibility and on time delivery Dramatically lower inventory levels and reduce working capital Lower the cost of the acquisition of finished goods and raw materials Optimize decisions in an increasingly complex business environment
SCM: 供應 鏈 子管理 Introduction and Its Technology Research Trends Heung-Suk Hwang ( 黃 興 錫 ) Department of Business and Administration, Kainan University, Taiwan 2005. 11. 22.
Characteristics of Consumer Product Goods Industry
Global Supply Chain / Complex Distribution Networks
High Volume - Low Margins
Competitive Environment / Promotions
High Customer Service / Make to Stock
Demand exceeds Supply / Product Mix Optimization
Seasonal Demands / Inventory Build Ups
Value Added Service for Customers (Retailers)
5 Steps of e-Business Progress Model Contents Managing policy Step 1 Internet Application, only for com. PR Homepage Dev. Step 2 Start to develop new product and services according to internet level e-mail, Marketing Co-invest with venture co. Step 3 Implementing the internet technology into industry works Development of Intra-net Step 4 Using internet suppliers, co-relate customers and business partners Cooperation, networking Step 5 Customer’s information delivered in real time Data marketing 物流管理 發展的 段階
Change patterns of e-Business: Sales and circulation 分 配 小 買 業 消 備 者 Conventional Business e- Business ▶ For the customers, needs several steps between suppliers and customers ▶ The cost of several steps distributed to the customers ▶ Generally the sales model is based on sales commission 製 造 業 供 給 者 ▶ Direct sales between producers and customers ▶ Cost down portion by on-line trade is returned to customers ▶ Producers transfer the sales cost into marketing cost 製造業者 消費者
ERP MRPII MRP Materials Requirement Planning Manufacturing Resource Planning Enterprise Resource Planning Integrate by Value Chain Management Evolution to Logistics/SCM 1960’s 1970’s 2000’s 1980’s Within Company Between Company SCM Supply Chain Management 1990’s e-Logistics
• By predetermined business rule, the logistics process system is completed within a few seconds • Tracing and controls/confirms by order unit • Shorter leadtime, fewer errors, inventory reduction • Some obstacles, but inevitable move Order Inv. Checking Production Schedule Check Suppliers Check Customer service Distribution New Wave of Net-centric Logistics
Supply Chain : from Original Supply to Final Consumption Increase Customer Responsiveness at Least Cost Manufacturing Distribution Supplier INFORMATION FLOW Retail Outlet Consumer Supply Chain Optimization CASH FLOW Transfer Transfer Transfer Transfer
Part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers’ requirements local optimum
(by Lockheed Martin and Penn State’s Center for Logistics Research)
Approximately 33% of the respondents indicated they were engaging in SCM improvements in 1995 .
64% were making improvements in 1997 .
45% of respondents believe they will be making SCM improvements in the each of the next three years
“ Leading ” companies showed a pattern of continued investment in SCM Improvements
Investment for SCM
Supply Chain Business Processes Supply Chain Management Components Supply Chain Network Structure SCM Framework What process should be linked with each of these key supply chain members ? What level of integration and management should be applied for each process link ? Who are the key supply chain members with whom to link processes ?
Tier 3 to initial suppliers Tier 2 suppliers Tier 1 suppliers Tier 1 Customers Tier 2 Customers Tier 3 to Consumers/ End-Customers Focal Company Members of the Focal company’s Supply Chain Supply chain network structure Initial Suppliers Tier 3 to n suppliers 2 1 n 1 n 2 1 1 n 3 n 1 2 3 n 1 2 n 2 1 n 1 n 2 1 n Tier 3 to n customers Consumers / End-customers
Primary Aspects of Supply Chain Network Structure
Members of the supply chain
structural Dimension of the Network
different types of Process links across the supply chain
horizontal structur e : number of tiers across the supply chain.
Ex) the network structure for bulk cement is relatively short. Raw materials are taken from the ground, combined with other materials, moved a short distance, and used to construct buildings
vertical structur e : number of suppliers/customers represented within each tier . A company can have a narrow vertical structure, with few companies at each tier level, or a wide vertical structure with many suppliers and/or customers at each tier level.
horizontal position within the supply chain :
position of focal company at near the initial source of supply, or near to the ultimate customer.
Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes .
Traditionally, both upstream and downstream portions of the supply chain have interacted as disconnected entities receiving sporadic flows of information over time
Operating an integrated supply chain requires continuous information flows , which in turn help to create the best product flows.
Supply Chain Business Processes SCM: Integrating and managing business processes across the supply chain Information Flow Logistics Purchasing Marketing & Sales R&D Production Finance PRODUCT FLOW CUSTOMER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FILFILLMENT MANUFACTURING FLOW MANAGEMENT PROCUREMENT PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS Manufacturer Tier 1 Supplier Tier 2 Supplier Customer Customer End-Customer
Tier 3 to initial suppliers Tier 2 suppliers Tier 1 suppliers Tier 1 Customers Tier 2 Customers Tier 3 to Consumers/ End-Customers Focal Company Non-Members of the Focal company’s Supply Chain Initial Suppliers Tier 3 to n suppliers 2 1 n 1 n 2 1 1 n 3 n 1 2 3 n 1 2 n 2 1 n 1 n 2 1 n Tier 3 to n customers Consumers / End-customers Types of intercompany business process links Members of the Focal company’s Supply Chain 1 n 1 n Managed process link Not-Managed process link Monitor process link Not-member process link
Supply Chain Business Processes SCM: disconnects Information Flow Logistics Purchasing Marketing & Sales R&D Production Finance PRODUCT FLOW CUSTOMER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FILFILLMENT MANUFACTURING FLOW MANAGEMENT PROCUREMENT PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS Manufacturer Tier 1 Supplier Tier 2 Supplier Customer Customer End-Customer
Management Components for Successful SCM ( physical and technical components)
planning and control of operations ;
moving supply chain in a desired direction
work flow/activity structure ;
how the firm performs its tasks and activities.
organization structure ;
individual firm and the supply chain, the use of cross-functional teams
product flow facility structure ;
network structure for sourcing, manufacturing, and distributing across the supply chain.
Communication & information flow facility structure ;
kind of information passed among channel members and the frequency of information updating
Management Components for Successful SCM (cont.) ( managerial and behavioral components)
management methods ;
corporate philosophy and management techniques, a top-down organization structure with a bottom-up structure
Financial Impact Opportunity Assessment Model Generic Model For Specific Industry Current Performance and Capabilities Model Opportunity Estimating Model Supply Chain Analysis Logic Source: Joint Industry Project on ECR. 1994. Performance Measures Performance Baseline Performance Impact