SUPPLY CHAIN MANAGEMENT WIKE AGUSTIN PRIMA DANIA, STP, M.ENG

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LITERATURE SUPPLY CHAIN MANAGEMENT, S. CHOPRA & P. MEINDL 2010 OPERATION MANAGEMENT, J HEIZER & B RENDER 2011 JOURNAL

Business & technology trends Local market, local supply vs. global market, global sourcing. Global competition. Shorter product life. Higher customer expectation Rate of change in technology Information & communication systems Variety of transportation modes All these factors lead to an increase in pressure to reduce costs & Supply Chain Management provides the opportunity.

What is a supply chain? A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request A supply chain is dynamic and involves the constant flow of information, product, and funds between different stages A supply chain stages include: Customers Retailers Wholesalers/distributors Manufacturers Component/raw material suppliers

Example. Stages of a Detergent Supply Chain Timber Company Department Store Paper Manufacturer Packaging Corporation Chemical Manufacturer P&G Manufacturer Third Party DC Customer Plastic Producer Example. Stages of a Detergent Supply Chain

Decision phases in a supply chain Supply chain strategy or design  long term decision Decide what the chain’s configuration How resources will be allocated What processes each stage will perform Strategic decisions The location & capacities of production & warehouse Modes of transportation Type of information system

Supply chain planning  quarter to a year Forecast for coming year Which market will be supplied from which location Subcontracting or manufacturing Inventory policies Timing and size of marketing Promotion Supply chain operation  short term decision Allocate inventory or production to individual orders Date of order to be filled Shipping mode Delivery schedule Replenishment order

Process view of a supply chain Cycle view The processes in SC are divided into a series of cycle, each performed at the interface between two successive stages of a SC Push/pull view The processes in SC are divided into two categories: Pull process: initiated by customer orders  reactive process Customer demand is known Push process: initiated and performed in anticipation of customer orders  speculative process Operate in an uncertain environment  customer demand is not yet known

Cycle view of SC processes Customer Customer Order Cycle Replenishment Cycle Manufacturing Cycle Procurement Cycle Retailer Distributor Manufacturer Supplier

Sub-processes in each SC process cycle Supplier stage markets product Buyer return reserve flows to supplier/third party Buyer stage places order Supplier stage receives supply Supplier stage receives order Supplier stage supplies order

Push/pull view of SC processes Customer Customer Order Cycle Replenishment Cycle & Manufacturing Cycle Procurement Cycle PULL PROCESSES Customer order arrives Clothes Company PUSH PROCESSES Manufacturer Supplier Example for make to stock environment

Customer Order & Manufacturing Cycle Procurement Cycle PULL PROCESSES Customer order arrives DELL Company PUSH PROCESSES Supplier Example for build to order environment

Supply chain macro processes in a firm Supplier Firm Customer Supplier Relationship Management (SRM) Internal Supply Chain Management (ISCM) Customer Relationship Management (CRM) Source Negotiate Buy Design Collaboration Supply Collaboration Strategic planning Demand planning Supply planning Fulfillment Field service Market Price Sell Call centre Order management

Supply chain decision making framework Responsiveness Efficiency Supply Chain Structure Facilities Inv & trans. Sourcing&Pricing Info system Competitive Strategy Supply Chain Strategy Strategic Fit Drivers