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Basics of Supply Chain Management
Definitions
What Is the Supply Chain?  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Suppliers Manufacturers Warehouses & Distribution Centers Customers Material Costs Transportation Costs Transportation Costs Transportation Costs Inventory Costs Manufacturing Costs
The Supply Chain Suppliers Manufacturers Warehouses & Distribution Centers Customers Material Costs Transportation Costs Transportation Costs Transportation Costs Inventory Costs Manufacturing Costs
The Supply Chain – Another View Plan Source Make Deliver Buy Suppliers Manufacturers Warehouses & Distribution Centers Customers Material Costs Transportation Costs Transportation Costs Transportation Costs Inventory Costs Manufacturing Costs
What Is Supply Chain Management (SCM)?  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Plan Source Make Deliver Buy
History of Supply Chain Management ,[object Object],[object Object],[object Object],[object Object],[object Object]
Why Is SCM Difficult?  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Plan Source Make Deliver Buy
The Importance of Supply Chain Management  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The Importance of Supply Chain Management  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Supply Chain Management and Uncertainty ,[object Object],[object Object],[object Object],Manufacturer Wholesale Distributors Consumers Multi-tier Suppliers Retailers Time Sales Sales Time Sales Time Sales Time Bullwhip Effect
Factors Contributing to the Bullwhip  ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Today’s Marketplace Requires:  ,[object Object],[object Object],[object Object],[object Object],[object Object],Shared visibility for  trading partners
Supply Chain Management – Key Issues ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Nevertheless, forecasts (or plans, if you prefer) are important management tools when some methods are applied to reduce uncertainty
Supply Chain Management – Key Issues ,[object Object],Purchasing Manufacturing Distribution Customer Service/ Sales Few change- overs Stable schedules Long run lengths High inventories High service levels Regional stocks SOURCE MAKE DELIVER SELL Low pur-chase price Multiple vendors Low invent-ories Low trans-portation
Supply Chain Management – Key Issues Source:  Simchi-Levi ISSUE CONSIDERATIONS Network Planning ,[object Object],[object Object],[object Object],Inventory Control ,[object Object],[object Object],Supply Contracts ,[object Object],[object Object],Distribution Strategies ,[object Object],[object Object],[object Object],Integration and Strategic Partnering ,[object Object],[object Object],[object Object],[object Object],Outsourcing & Procurement Strategies ,[object Object],[object Object],[object Object],Product Design ,[object Object],[object Object]
Supply Chain Management Operations Strategies Source:  Simchi-Levi STRATEGY WHEN TO CHOOSE BENEFITS Make to Stock standardized products, relatively predictable demand Low manufacturing costs; meet customer demands quickly Make to Order customized products, many variations Customization; reduced inventory; improved service levels Configure to Order many variations on finished product; infrequent demand Low inventory levels; wide range of product offerings; simplified planning Engineer to Order complex products, unique customer specifications Enables response to specific customer requirements
Supply Chain Management – Benefits ,[object Object],Source:  Cohen & Roussel Delivery Performance 16%-28% Improvement Inventory Reduction 25%-60% Improvement Fulfillment Cycle Time 30%-50% Improvement Forecast Accuracy 25%-80% Improvement Overall Productivity 10%-16% Improvement Lower Supply-Chain Costs 25%-50% Improvement Fill Rates 20%-30% Improvement Improved Capacity Realization 10%-20% Improvement
Supply Chain Imperatives for Success ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Supply chain configuration components
Value of Information and SCM
Information In The Supply Chain ,[object Object],[object Object],[object Object],Source Make Deliver Sell Suppliers Manufacturers Warehouses & Distribution Centers Retailer It’s estimated that the typical pharmaceutical company supply chain carries over 100 days of product to accommodate uncertainty Plan Order Lead Time Delivery Lead Time Production Lead Time
Taming the Bullwhip ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Four critical methods for reducing the Bullwhip effect:
Methods for Improving Forecasts Accurate Forecasts Panels of Experts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Judgment Methods Time-Series Methods Causal Analysis Market Research Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object]
The Evolving Supply Chain
Supply Chain Integration – Push Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Supply Chain Integration – Pull Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Supply Chain Integration – Push/Pull Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Supply Chain Timeline Raw Materials End Consumer Push Strategy Pull Strategy Push- Pull Boundary “ Generic” Product “ Customized” Product
Choosing Between Push/Pull Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Pull Push Pull Push Economies of Scale Low High Low High Demand Uncertainty ,[object Object],[object Object],[object Object],[object Object],Computer equipment ,[object Object],[object Object],[object Object],[object Object],Grocery, Beverages ,[object Object],[object Object],[object Object],[object Object],Books, CD’s ,[object Object],[object Object],[object Object],[object Object],Furniture Source:  Simchi-Levi
Characteristics of Push, Pull and Push/Pull Strategies Source:  Simchi-Levi PUSH PULL Objective Minimize Cost Maximize Service Level Complexity High Low Focus Resource Allocation Responsiveness Lead Time Long Short Processes Supply Chain Planning Order Fulfillment
Supply Chain Collaboration – What Is It? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Supply Chain Collaboration ,[object Object],[object Object],[object Object],Manufacturer Distributors/ Wholesalers Suppliers Retailers Collaborative Demand Planning ,[object Object],[object Object],[object Object],Synchronized Production Scheduling Collaborative Product Development Logistics Providers
Benefits of Supply Chain Collaboration Source:  Cohen & Roussel CUSTOMERS MATERIAL SUPPLIERS SERVICE  SUPPLIERS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Supply Chain Collaboration Spectrum ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source:  Cohen & Roussel Number of Relationships Extent of Collaboration Many Few Limited Extensive Transactional Collaboration Synchronized Collaboration Cooperative Collaboration Coordinated Collaboration Not Viable Low Return
Successful Supply Chain Collaboration ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Emerging Best Practices in SCM Strategy
The SCOR Model
Collaboration and the SCOR Model ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Process Reference Models ,[object Object],Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results Benchmarking Characterize the management practices  and software solutions that result in “best-in-class” performance Best Practices  Analysis Process Reference  Model Capture the “as-is” state of a process and derive the desired “to-be” future state Business Process  Reengineering Capture the “as-is” state of a process and derive the desired “to-be” future state Quantify the operational performance of similar companies and establish internal targets based on “best-in-class” results Characterize the management practices  and software solutions that result in “best-in-class” performance
SCOR Structure Supplier Plan Customer Customer’s Customer Suppliers’ Supplier Make Deliver Source Make Deliver Make Source Deliver Source Deliver Internal or External Internal or External Your Company Source SCOR   Model   Return Return Return Return Return Return Return Return Building Block Approach Processes Metrics Best Practice Technology
Customers Suppliers P1  Plan Supply Chain Plan P2  Plan Source P3  Plan Make P4  Plan Deliver Source Make Deliver S1  Source Stocked Products M1  Make-to-Stock M2  Make-to-Order M3  Engineer-to-Order D1  Deliver Stocked Products D2  Deliver MTO Products D3 Deliver ETO Products S2  Source MTO Products S3  Source ETO Products Return Source P5  Plan Returns Return Deliver Enable D4  Deliver Retail Products SCOR 7.0 Model Structure
SCOR Implementation Roadmap Material Flow SCOR Level 1 Operations Strategy Analyze Basis of Competition SCOR Level 2 Configure supply chain Align Performance  Levels, Practices, and Systems Implement supply chain  Processes and  Systems ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Information and Work Flow ,[object Object],[object Object],[object Object],[object Object],Develop, Test, and Roll Out ,[object Object],[object Object],[object Object],[object Object],SCOR Level 3
Examples of SCOR Adoptions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The SCOR Model As Context for This Course ,[object Object],Supplier Plan Customer Customer’s Customer Suppliers’ Supplier Make Deliver Source Make Deliver Make Source Deliver Source Deliver Internal or External Internal or External Your Company Source Return Return Return Return Return Return Return Return Segment Analysis, Marketing Planning Marketing Data Suppliers Pharmacies, Hospitals, Doctors Marketing and Sales Functions Doctors, Hospitals Patients
The SCOR Model As Context for This Course ,[object Object],[object Object],[object Object],Sales Manufacturing & Distribution Supplier Plan Customer Customer’s Customer Suppliers’ Supplier Make Deliver Source Make Deliver Make Source Deliver Source Deliver Internal or External Internal or External Your Company Source Return Return Return Return Return Return Return Return Supplier Plan Customer Customer’s Customer Suppliers’ Supplier Make Deliver Source Make Deliver Make Source Deliver Source Deliver Internal or External Internal or External Your Company Source Return Return Return Return Return Return Return Return

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supply chain management

  • 1. Basics of Supply Chain Management
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  • 4. The Supply Chain Suppliers Manufacturers Warehouses & Distribution Centers Customers Material Costs Transportation Costs Transportation Costs Transportation Costs Inventory Costs Manufacturing Costs
  • 5. The Supply Chain – Another View Plan Source Make Deliver Buy Suppliers Manufacturers Warehouses & Distribution Centers Customers Material Costs Transportation Costs Transportation Costs Transportation Costs Inventory Costs Manufacturing Costs
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  • 17. Supply Chain Management Operations Strategies Source: Simchi-Levi STRATEGY WHEN TO CHOOSE BENEFITS Make to Stock standardized products, relatively predictable demand Low manufacturing costs; meet customer demands quickly Make to Order customized products, many variations Customization; reduced inventory; improved service levels Configure to Order many variations on finished product; infrequent demand Low inventory levels; wide range of product offerings; simplified planning Engineer to Order complex products, unique customer specifications Enables response to specific customer requirements
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  • 29. Characteristics of Push, Pull and Push/Pull Strategies Source: Simchi-Levi PUSH PULL Objective Minimize Cost Maximize Service Level Complexity High Low Focus Resource Allocation Responsiveness Lead Time Long Short Processes Supply Chain Planning Order Fulfillment
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  • 34.
  • 35. Emerging Best Practices in SCM Strategy
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  • 39. SCOR Structure Supplier Plan Customer Customer’s Customer Suppliers’ Supplier Make Deliver Source Make Deliver Make Source Deliver Source Deliver Internal or External Internal or External Your Company Source SCOR Model Return Return Return Return Return Return Return Return Building Block Approach Processes Metrics Best Practice Technology
  • 40. Customers Suppliers P1 Plan Supply Chain Plan P2 Plan Source P3 Plan Make P4 Plan Deliver Source Make Deliver S1 Source Stocked Products M1 Make-to-Stock M2 Make-to-Order M3 Engineer-to-Order D1 Deliver Stocked Products D2 Deliver MTO Products D3 Deliver ETO Products S2 Source MTO Products S3 Source ETO Products Return Source P5 Plan Returns Return Deliver Enable D4 Deliver Retail Products SCOR 7.0 Model Structure
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Editor's Notes

  1. Dependent on each instructor’s requirements
  2. Dependent on each instructor’s requirements
  3. Dependent on each instructor’s requirements
  4. Dependent on each instructor’s requirements
  5. Dependent on each instructor’s requirements
  6. 34
  7. 21 4 Building block approach Source connects to supplier Deliver connects to customer Not all companies have make We can model as far up or down the supply chain as we view important (not limited to two tiers) Customers and / or suppliers can be internal or external
  8. Point 1 SCOR is applied in 4 steps...Analyze Basis of Competition defines performance needs, Configure Supply Chain maps the high level material flow, Align Performance, Practices, and Systems maps the general transaction flow, and Implement Design organizes the list of projects to improve SC performance. Point2 This should also be drawn on POST IT POSTER and displayed on the wall OR have one drawn up in advance using VISIO.