S UPPLY C HAIN L OGISTICS M ANAGEMENT

C HAPTER 1 21 ST -C ENTURY S UPPLY C HAINS The Supply Chain Revolution Why Integration Creates Value Generalized Supply Chain Model Integrative Management and Supply Chain Processes Responsiveness Financial Sophistication Globalization 2 Donald 版本－双语 PPT

PRACTICE TO ACCUMULATE INVENTORY Such long-standing business practices remained in place and unchallenged because no clearly superior alternative existed during the 20 th century. The industrialized world is no longer characterized by scarcity. Consumer affluence and desire for wide choice of products and services continue to grow. The desires of customers have shifted from passive acceptance to active involvement in the design and delivery of specific products and services. 3 Donald 版本－双语 PPT

PRACTICE TO ACCUMULATE INVENTORY Transportation capacity and operational performance have increasingly become ore economical and reliable. Massive change has occurred as a result of available information technology Donald 版本－双语 PPT

5 Right goods Right location Right time Right condition Right customer

1.1 T HE S UPPLY C HAIN R EVOLUTION - WHAT IS SUPPLY CHAIN ? Supply chain consists of firms collaborating to leverage strategic positioning and to improve operating efficiency. The differences between supply chain and logistics The differences between supply chain and logistics Donald 版本－双语 PPT 6

T HE FOCUS OF THIS BOOK Integrated logistics management A reader must have a basic understanding of supply chain management. Supply chain strategy establishes the operating framework within which logistics is performed. Logistics is presented as a work in progress, subject to continuous change based on the evolving nature of supply chain structure and strategy Donald 版本－双语 PPT

1.2 WHY INTEGRATION CREATES VALUE Traditional perspective : economic value Market value Relevancy: customization of value-adding services TABLE1.1 8 Donald 版本－双语 PPT

1.3 G ENERALIZED S UPPLY C HAIN M ODEL - THE RESEARCH TOOLS OF SUPPLY CHAIN The context of an integrated supply chain is multi-firm collaboration within a framework of key resource flows and constraints. 9 Donald 版本－双语 PPT

E XPLAIN THE FIGURE 1.1 The context of an integrated supply chain is multifirm collaboration within a framework of key resource flows and constraints. Value results from the synergy among firms constituting a supply chain as a result of five critical flows: information. Product, service, financial, and knowledge. 10 Donald 版本－双语 PPT

T O BE CONTINUED － W HY IS SC SO COMPLICATED ? Firstly, SC’ value results from the synergy among all of SC members; Secondly, the integrated value-creation process must be aligned and managed; Thirdly, many complexities such as loyalty issues and potential conflict of interest; Fourthly, the high degree of mobility and change Finally, information technology ( Financial sophistication ) 11 Donald 版本－双语 PPT

1.4 I NTEGRATIVE M ANAGEMENT AND SUPPLY CHAIN PROCESSES Obstacles: Functional Specialization The Fundamental Challenge of integrated management is to redirect traditional emphasis on functionality to focus on process achievement. 12 Donald 版本－双语 PPT

The fundamental challenge of integrated management is to redirect traditional emphasis on functionality in an effort to focus on process achievement ； Integrative process management seeks to identify and achieve lowest total cost by capturing trade-offs that exist between functions. The Focus of integrated management is lowest total process cost. 13 Donald 版本－双语 PPT Tradition vs. Integrated

1.5 R ESPONSIVENESS Anticipatory business model Responsive Business Model 14 Donald 版本－双语 PPT

A NTICIPATORY BUSINESS MODEL -C HARACTERISTICS Information was not readily available Firms such as wholesales, distributors, retailers, loosely linked together. The discontinuities resulted in unplanned inventory. Further, bringing high cost and high risk, and they were adversarial to protect own interest. 15 Donald 版本－双语 PPT

16 Figure 1-2 Anticipatory Business Model Shortcomings: Firstly, risk is very high if misgauging customer requirements ； Secondly, each firm in the distribution channel duplicated the anticipatory process.

Donald 版本－双语 PPT 17 Figure 1-3 Responsive Business Model Advantages: Firstly, reduce or eliminate forecast reliance; Secondly, by sharing information to improve forecasting accuracy and speed of SC, reduce overall inventory and eliminate duplicate practices; Finally, the fewer steps required mean less cost and less elasped time from order commitment to delivery

Comparion The sequences of events that drive business practice is different; The time to execute and the degree of potential customization are different; The responsive model is faster ; The responsive model could customize products on smaller orders. (contract to build-to-order lot size manufacturing) 18 Donald 版本－双语 PPT

Donald 版本－双语 PPT Compare and contrast anticipatory and responsive-based business models. Why has responsiveness become popular in supply chain strategies and collaborations?

ANTICIPATORY AND RESPONSE-BASED BUSINESS MODELS ARE THE TWO WAYS USED BY FIRMS TO FULFILL CUSTOMER REQUIREMENTS. HOWEVER THE FUNDAMENTAL DIFFERENCE IN THE TWO MODELS IS TIMING ANTICIPATORY MODEL HAS BEEN THE TRADITIONAL BUSINESS PRACTICE, WHICH WAS MAINLY FORECAST DRIVEN. SINCE INFORMATION ABOUT PURCHASING BEHAVIOR WAS NOT READILY AVAILABLE, AND THE CHANNEL PARTNERS WERE LOOSELY COLLABORATING, BUSINESSES WERE DRIVEN BY FORECASTS. HOWEVER THE FORECASTS USED BY THE MANUFACTURERS, WHOLESALES, DISTRIBUTORS, AND RETAILERS WERE OFTEN DIFFERENT THAT LED TO A LOT OF EXCESS INVENTORY IN THE SYSTEM. ALL THE WORK WAS PERFORMED IN ANTICIPATION OF FUTURE PROJECTIONS, SO THE LIKELIHOOD OF MISGAUGING CUSTOMER REQUIREMENTS WAS VERY HIGH. IN ADDITION EACH FIRM IN THE CHAIN DUPLICATED THE ANTICIPATORY PROCESS.