1-1SupplyChainLogisticsManagementChapter1:Twenty-firstCenturySupplyChainsYanhongHouSUPPLIERNETWORKINTEGRATEDENTERPRISEDISTRIBUTIVENETWORKInformation,Product,Service,FinancialandKnowledgeFlowsMATERIALSCapacity,Information,CoreCompetencies,CapitalandHumanResourcesRelationshipManagementProcurementManufacturingDistributionENDCONSUMERSGeneralizedSupplyChainModel1-2McGraw-Hill/IrwinSupplyChainLogisticsManagement,FirstEdition.Bowersox,Closs,andCooper.Copyright©2002byTheMcGraw-HillCompanies,Inc.Allrightsreserved.1-3Whatisasupplychain?CustomerwantsdetergentandgoestoJewelJewelSupermarketJewelorthirdpartyDCP&GorothermanufacturerPlasticProducerChemicalmanufacturer(e.g.OilCompany)TennecoPackagingPaperManufacturerTimberIndustryChemicalmanufacturer(e.g.OilCompany)1-4AnticipatoryBusinessModelFORECASTBUYCOMPONENTSANDMATERIALSMANUFACTURERWAREHOUSESELLDELIVER1-5BUYCOMPONENTSANDMATERIALSMANUFACTURERSELLDELIVERResponse-basedBusinessModel1-6The21stCenturySupplyChain•Managingthemodernsupplychainisajobthatinvolvesspecialistsinmanufacturing,purchasing,anddistribution,ofcourse.ButtodayitisalsovitaltotheworkofCFOs,CIOs,operationsandcustomerserviceexecutives,andcertainlychiefexecutives.Changesinsupplychainmanagementhavebeentrulyrevolutionary,andthepaceofprogressshowsnosignofmoderating.Inourincreasinglyinterconnectedandinterdependentglobaleconomy,theprocessofdeliveringsuppliesandfinishedgoods(andinformationandotherbusinessservices)fromoneplacetoanotherisaccomplishedbymeansofmind-bogglingtechnologicalinnovations,clevernewapplicationsofoldideas,seeminglymagicalmathematics,powerfulsoftware,andold-fashionedconcrete,steel,andmuscle.1-71-8SupplyChainLogisticsManagementChapter2:Logistics1-9Source:RobertV.Delaney,11thAnnual“StateOfLogisticsReport”©June5,20001980GDP$2.88trillionLogisticsCost$451billion15.7%ofGDPTrans.Cost$214billion2007GDP$13.84trillionLogisticsCost$1398billion10.1%ofGDPTrans.Cost$857billionLogisticsTransportation$billion0100200300400500600700800900198019991000YearUnitedStatesLogisticsCosts1-10IntegratedLogisticsOrderProcessingInventoryTransportationFacilityNetworkWarehousingMaterialHandlingPackaging1-11LogisticalIntegrationCustomersEnterpriseMarketDistributionManufacturingSupportProcurementSuppliersInformationFlowInventoryFlow1-12MarketDistributionOperatingConcernsMarketDistribution:Activitiesrelatedtoprovidingcustomerservice.Requiresperformingorderreceiptandprocessing,deployinginventories,storageandhandling,andoutboundtransportationwithinasupplychain.Includestheresponsibilitytocoordinatewithmarketingplanninginsuchareasaspricing,promotionalsupport,customerservicelevels,deliverystandards,handlingreturnmerchandise,andlife-cyclesupport.Theprimarymarketdistributionobjectiveistoassistinrevenuegenerationbyprovidingstrategicallydesiredcustomerservicelevelsatthelowesttotalcost.1-13ManufacturingSupportOperatingConcernsManufacturingSupport:Activitiesrelatedtoplanning,scheduling,andsupportingmanufacturingoperations.Requiresmasterscheduleplanningandperformingwork-in-processstorage,handling,transportation,andtimephasingofcomponents.Includestheresponsibilityforstorageofinventoryatmanufacturingsitesandmaximumflexibilityinthecoordinationofgeographicandfinalassembliespostponementbetweenmanufacturingandmarketdistributionoperations.1-14ProcurementOperatingConcernsProcurement:Activitiesrelatedtoobtainingproductsandmaterialsfromoutsidesuppliers.Requiresperformingresourceplanning,supplysourcing,negotiation,orderplacement,inboundtransportation,receivingandinspection,storageandhandling,andqualityassurance.Includestheresponsibilitytocoordinatewithsuppliersinsuchareasasscheduling,supplycontinuity,hedging,andspeculation,aswellasresearchleadingtonewsourcesorprograms.Theprimaryprocurementobjectiveistosupportmanufacturingorresaleorganizationsbyprovidingtimelypurchasingatthelowesttotalcost.1-15LogisticsInformationRequirementsStrategicObjectivesCapacityConstraintsLogisticsRequirementsManufacturingRequirementsProcurementRequirementsOrderProcessingOrderAssignmentDistributionOperationsTransportationandShippingProcurementInventoryDeploymentInventoryManagementPLANNING-COORDINATIONOPERATIONSForecasting1-16EchelonedStructuredLogisticsSupplierIndustrialDistributionorConsolidationWarehouseManufacturerWholesalerorDistributionCenterRetailerCustomerINFORMATIONFLOWS1-17EchelonedStructuredLogisticsSupplierIndustrialDistributionorConsolidationWarehouseManufacturerWholesalerorDistributionCenterRetailerCustomerSupportforDirectDeliveryINFORMATIONFLOWS1-18FlexibleEchelonedStructuredLogisticsSupplierIndustrialDistributionorConsolidationWarehouseManufacturerWholesalerorDistributionCenterRetailerCustomerSupportforDirectDeliveryFlowThroughServiceSupplierArrangementsFlowThroughServiceSupplierArrangementsINFORMATIONFLOWS1-19ProcessView:CycleViewofSCsCustomerOrderCycleReplenishmentCycleManufacturingCycleProcurementCycleCustomerRetailerDistributorManufacturerSupplierinterfaceinterfaceinterfaceinterface1-20LogisticalPerformanceCyclesNodeTransportationLinksCommunicationLinksMate