What it Supply Chain? A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. It includes Manufacturer and suppliers, transporters, warehouses, retailers and customers. Within each company, the supply chain includes all functions involved in fulfilling a customer request (product development, marketing, operations, distribution, finance, customer service)
What it Supply Chain? Customer is an integral part of the supply chain Includes movement of products from suppliers to manufacturers to distributors, but also includes movement of information, funds, and products in both directions Probably more accurate to use the term “supply network” or “supply web” Typical supply chain stages: customers, retailers, distributors, manufacturers, suppliers
Supply Chain Stages Each stages in a supply chain is connected through the flow of products, information and funds. These flows often occur in both directions Depends upon customer needs
Objectives of Supply Chain Maximise the overall value of the product Maximise Supply Chain Profitability/supply chain surplus Flow of information and funds Effective Supply Chain Management – Management of supply chain assets, product, information and fund flow
Importance of Supply Chain Decisions Supply Chain Flow – product, information and funds Supply Chain design, planning and operation decisions play a significant role in the success or failure of a firm.
Decision Phases in a Supply chain Supply Chain Strategy or Design Marketing and pricing plans for a product Structuring the supply chain for several years In-House or Outsource Decides the SC Configuration Supply Chain Planning Planning for quarter year to a year Forecasting Supply Chain Operation Weekly or daily operation Individual customer orders
Process Views of Supply Chain Cycle View The processes in a supply chain are divided into a series of cycles, each performed at the interface between two successive stages of a supply chain Push/Pull View Pull processes are initiated by a customer order Push processes are initiated and performed in anticipation of customer orders.
Cycle View of Supply Chain Processes Customer order cycle Replenishment Cycle Manufacturing Cycle Procurement Cycle
Cycle View of Supply Chain Processes CustomerCustomer Order Cycle RetailerReplenishment Cycle DistributorManufacturing Cycle ManufacturerProcurement Cycle Supplier
Sub ProcessSupplier Stage Buyer returnsMarket Product reverse flows to supplier or third partyBuyer Stage PlacesOrder Buyer Stage receives supplySupplier Stagereceives order Supplier Stage supplies order
Push /Pull view of supply chain processes Pull Process With Pull Process, execution is initiated in response to a customer order Also referred to as Reactive Processes This process operate in an environment in which customer demand is known
Push /Pull view of supply chain processes Push Process Execution is initiated in anticipation of customer orders Demand is not known and must be forecast Also known as Speculative Processes
Push /Pull view of supply chain processes Push/pull Boundary Push Processes Pull ProcessesProcess Process Process Process Process Process Process 1 2 3 4 5 6 7 Customer Order Arrives
Supply Chain Macro Processes in a Firm Customer Relationship Management (CRM) All processes that focus on the interface between the firm and its customers Internal supply chain management (ISCM) All processes that are internal to the firm Supplier Relationship Management (SRM) All processes that focus on the interface between the firm and its suppliers
Supply Chain Macro Processes in a FirmSupplier Firm Customer SRM ISCM CRMSource Strategic Planning MarketNegotiate Demand Planning PriceBuy Supply Planning SellDesign Collaboration Fulfillment Call CenterSupply Collaboration Field Service Order Management