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


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

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