supply chain management

McGraw-Hill/IrwinCopyright©2008byTheMcGraw-HillCompanies,Inc.Allrightsreserved.SupplyChainManagementProfessorUdattaS.Palekar1-2CourseDescriptionThiscoursebroadlyexposesstudentstothebasicconcepts,terminologyandtechniquesofsupplychainmanagement.Weconsiderbothstrategicandtacticalissuesinsupplychaindesignandmanagement,andthebasicconceptsandtoolsinsupplychainmanagement.1-3CourseObjectivesIntroducethemainfunctionsofsupplychainmanagement.Exploreinteractionsbetweenthelogisticsofmanufacturing,inventoryandtransportation.Understandthecomplexityofinter-firmandintra-firmco-ordinationUnderstandthedesignofintegratedsupplychainstrategyanditsrelationshiptoproductdesignandinformationtechnology1-4CourseGradingDailyHomework70%FinalExamination30%Allhomeworkmustbeneatlytypedandsubmittedatthebeginningoftheclassontheassignedday.1-5Assignment#1Chapter1,pg17–DiscussionQuestion#1Chapter12,pg386–DiscussionQuestion#6Duedate:Aug3,2010Maximum2-pagestyped.1-6WhatIsaSupplyChain?Flowofproductsandservicesfrom:RawmaterialsmanufacturersIntermediateproductsmanufacturersEndproductmanufacturersWholesalersanddistributorsandRetailers•Connectedbytransportationandstorageactivities•Integratedthroughinformation,planning,andintegrationactivities•Costandservicelevels1-71.1WhatIsSupplyChainManagement?Supplychainmanagementisasetofapproachesutilizedtoefficientlyintegratesuppliers,manufacturers,warehouses,andstores,sothatmerchandiseisproducedanddistributedattherightquantities,totherightlocations,andattherighttime,inordertominimizesystemwidecostswhilesatisfyingservicelevelrequirements.1-8AlternativeDefinitionsTheSupplyChainisthesequenceofstakeholdersthatcontributetothecreationanddeliveryofagoodorservicetoendcustomers.SupplyChainManagementisorganizingthecosteffectiveflowandstorageofmaterials,in-processinventory,finishedgoodsandrelatedinformationfrompointoforigintopointofconsumptiontosatisfycustomerrequirements.1-9TwoOtherFormalDefinitionsThedesignandmanagementofseamless,value-addedprocessacrossorganizationalboundariestomeettherealneedsoftheendcustomerInstituteforSupplyManagementManagingsupplyanddemand,sourcingrawmaterialsandparts,manufacturingandassembly,warehousingandinventorytracking,orderentryandordermanagement,distributionacrossallchannels,anddeliverytothecustomerTheSupplyChainCouncil1-10EvolutionofSupplyChainManagement1950s1960s1970s1980s1990s2000sBeyondTraditionalMassManufacturingInventoryManagement/CostOptimizationJIT,TQM,BPR,AlliancesSCMFormation/ExtensionsFurtherRefinementofSCMCapabilities1-11WhatisNew?CollaborationratherthanconflictEnterpriseExtensionInformationandcontrolsharingbeyondtheboundsoftheenterpriseProcessspecializationIntegratedServiceProvidersTransportationThirdPartyLogistics/FourthPartyLogistics(Difference?)OutsourcedManufacturingOutsourcedDesignandEngineeringServices1-12…WhatisNew?ResponsivenessFromMaketoStock(Anticipatory/Speculative)toMaketoOrder(Responsive)PostponementStrategiesManufacturingPostponementGeographicorLogisticPostponementGlobalizationGeographicexpansionofenterprisescopeNeedformorecollaborationandresponsiveness1-13…WhatisNew?InformationRevolutionDevelopmentofERPsystemsTelecommunicationsgrowthTheInternetrevolutionE-CommerceGrowthinComplexityLinkedNetworksofFacilitiesMultiplemodesoftransportationAvailabilityofInformation1-14PCIndustrySupplyChainTracingbackthescreenyoustareatforthebulkofyourtime.1-15Cisco’sValueNetwork1-16TheSCMNetworkFIGURE1.1:Thelogisticsnetwork1-17KeyObservationsEveryfacilitythatimpactscostsneedtobeconsideredSuppliers’suppliersCustomers’customersEfficiencyandcost-effectivenessthroughoutthesystemisrequiredSystemlevelapproachMultiplelevelsofactivitiesStrategic–Tactical–Operational1-18OtherRelatedObservationsChallengingtominimizesystemcostsandmaximizesystemservicelevelsInherentpresenceofuncertaintyandriskSupplychainstrategylinkedtotheDevelopmentChain1-19Setofactivitiesandprocessesassociatedwithnewproductintroduction.Includes:productdesignphaseassociatedcapabilitiesandknowledgesourcingdecisionsproductionplans1.2TheDevelopmentChain1-201.2TheDevelopmentChainFIGURE1-2:Theenterprisedevelopmentandsupplychain1-21GlobalOptimizationGeographicallydispersedcomplexnetworkConflictingobjectivesofdifferentfacilitiesDynamicsystemVariationsovertimeMatchingdemand-supplydifficultDifferentlevelsofinventoryandbackordersRecentdevelopmentshaveincreasedrisksLeanproduction/Off-shoring/Outsourcing1-22GlobalApparelValueChainTracingbackthedressyouarewearing1-231-24QC&Shipping[HongKong]ProductDesign[HongKong]Zippers+…[Japan+…]Stitching[Indonesia]Weaving[Taiwan]YarnSpinning[Korea]AnIllustration:HowLi&FungLimitedMightMakeaDressGloballyDispersedManufacturing1-251.4UncertaintyandRiskFactorsMatchingSupplyandDemandaMajorChallengeREASONSEXAMPLES•Rawmaterialshortages•Internalandsupplierpartsshortages•ProductivityinefficienciesBoeingAircraft’sinventorywrite-downof$2.6billion•Salesandearningsshortfall•LargerthananticipatedinventoriesSalesatU.S.SurgicalCorporationdeclined25percen