extending the supply chain through inter-enterprise integration Integrating Backward extending the supply chain through inter-enterprise integration

Objectives introduce and define supply chain management provide examples of extended supply chain management

What is a supply chain? the complex network of relationships that organizations maintain with trading partners to source, manufacture, and deliver products coordination of flows: material, informational, financial

Traditional supply chain SUPPLIER DISTRIBUTOR CONSUMER MANUFACTURER RETAILER

Supply chain planning PAYMENT FLOWS INFORMATION FLOWS

Supply chain planning improve forecast accuracy optimize production scheduling reduce inventory costs decrease cycle times reduce transportation costs improve customer service demand forecasting inventory simulation distribution planning transportation planning manufacturing planning order commitment

Supply chain execution PRODUCT FLOWS

supply chain execution ORDER ENTRY & PROCESSING ORDER CONFIRMATION FULFILLMENT PLANNING CAPACITY PLANNING FORECASTING MPS/SOURCING DISTRIBUTION SCHEDULING INVENTORY AVAILABILITY PRODUCTION ORDER PLANNING REPLENISHMENT PRODUCTION CUSTOMER SERVICE SCHEDULE DELIVERY PICK & LOAD DISTRIBUTION

Vendor managed inventory Supplier Manufacturer Customer demand demand trigger trigger order order ERP ERP/SCM ERP/SCM

Hammer’s observations You have to integrate internally in order to integrate externally The walls between enterprises dwarf the walls within enterprises

CASE #1: integrated make-to-stock 85 million pounds multiple channels complex sourcing network one SCM system nightly sales & inventory updates high performance planning and integrated procurement

CASE #2: continuous replenishment WL monitors CVS store-level consumption replenishes inventory to meet agreed upon service levels seamless inter-enterprise integration ultimate objective: scan-one, make-one Thymol, Eucalyptol, Methyl Salicylate, Menthol, Alcohol, Sorbitol, Poloxamer 407, Benzoic Acid, Sodium Saccharin, Sodium Benzoate and FD&C Green # 3. C V S pharmacy /

CASE #3: build-to-order customer demand is unpredictable machines ship within 48 hours of order match supply with demand in real time ultimate objective: frictionless flow of information

CASE #4: channel assembly order Manufacturer electronic warehouse orders and inventory levels FDX to begin coordinating all of Cisco's shipping and will gradually eliminate all of Cisco's warehousing factories in the U.S., Mexico, Scotland, Taiwan and Malaysia company needs more flexibility to be able to drop or add manufacturers at a moment's notice ambitious plan: Merge orders in transit. management of all shipping shifts to an FDX "command and control center" different boxes destined for single customer shipped independently when manufactured FDX selects most logical, economical type of transport and coordinates customs clearances all arrive at customer's door, parts assembled right there, never stored in central warehouse real-time status of massive synchronization is constantly available on the Internet orders Distributor assembly, configuration, and order filling Distributor parts warehouse Customer desktop Parts suppliers

Summary introduced and define supply chain management provided examples of extended supply chain management