Download presentation
Presentation is loading. Please wait.
1
Supply Chain Management
BCOR1010
2
From Boeing’s 787…
3
To Topper the Trick Terrier…
Voice Recognition Requirements: (San Francisco) Voice Recognition Programming: (Taiwan) Plastic Eyes: (Shenzhen, China) Plastic Body: (Malaysia) Microfiber for Coat: (Korea) Speaker for voice: (Dongguan, China) Transistors: (Shenzhen, China) Motors for legs: (Shaoguan, China) IC chips: (Taiwan) Plastic legs: (Taiwan) Wiring: (Dongguan, China) Packaging: (Hong Kong)
4
Supply Chain Management…
Makes Business Work! Wal-Mart, Dell, Seven-Eleven Japan, Amazon, Toyota, IBM, Apple… Or Stumble… Hershey’s Halloween Nightmare: New order management and shipping systems don’t start right, as Hershey can’t fulfill critical Halloween orders; $150 million in revenue lost as stock drops 30% Cisco’s Inventory Disaster: Lack of demand and inventory visibility as market slows leads to $2.2 billion inventory write-off and stock price cut in half Nike’s Planning System Perplexity: New planning system causes inventory and order woes, blamed for $100 revenue miss as stock loses 20%
5
But, What is a Supply Chain?
A supply chain consists of all stages involved, directly or indirectly, in fulfilling customer requests The entire process from point of origin (raw materials) to point of consumption (final products bought by customers) A network (interdependent system) of facilities including materials supply from suppliers transformation of materials to (inventories of) semi-finished and finished products distribution of finished products to customers
6
Stages of a Detergent Supply Chain
SYST 4050 Slides Stages of a Detergent Supply Chain Timber Company Paper Manufacturer Tenneco Packaging P&G or Other Manufacturer Wal-Mart or Third Party DC Wal-Mart Store Customer Supply chain involves everybody, from the customer all the way to the last supplier Chemical Manufacturer Plastic Producer Chapter 1
7
Example: Wal-Mart Wal-Mart or third-party distribution centers
SYST 4050 Slides Example: Wal-Mart Wal-Mart or third-party distribution centers Procter & Gamble Customers Request: Buying detergent, clothes, TV, …... Wal-Mart Stores Da-Fa Clothing, Inc. (China) SONY Factory (Malaysia) Fabric Producer Electronics Components Producer Plastic Producer Zipper Producer Plastic Producer Chemical Producer Thread Producer Chapter 1
8
Example: HP FAT = Final assembly & test
SYST 4050 Slides Example: HP USA DCs Suppliers IC Mfg Retailer Consumer Europe DCs Suppliers PC Board FAT Retailer Consumer Asian DCs Suppliers Subassembly Retailer Consumer Suppliers FAT = Final assembly & test IC Mfg = Integrated circuit manufacturing PC Board = Printed circuit board Chapter 1
9
SYST 4050 Slides Example: Dell Monitors by SONY (Mexico) Keyboards by Acer (Taiwan) Dell Assembly Plant Customers order computers on Dell’s website CPU by Intel (USA) Other components Dell is significantly revamping its entire supply chain strategy and, in large measure, abandoning its make-to-order model [April, 2008] Chapter 1
10
Material/Product Flow
A Typical Supply Chain Information Flow Supplier Manufacturer Distributor Retailer Customer Material/Product Flow Value-Added Services Funds Flow
11
Now, What is a Supply Chain!
SYST 4050 Slides Now, What is a Supply Chain! Flow of products and services from Suppliers Raw materials manufacturers Intermediate products manufacturers End product manufacturers Distributors and wholesalers Retailers Customer Connected through transportation, information, and exchanges of funds Supplier Manufacturer Distributor Retailer Customer Chapter 1
12
Every facility that impacts costs need to be considered
Key Observations Every facility that impacts costs need to be considered Suppliers’ suppliers Customers’ customers Efficiency and cost-effectiveness throughout the system is required System level approach
13
So, What is Supply Chain Management?
is the coordination and integration of the activities so as to maximize profitability across the entire chain Procure services and materials Transform them into intermediate and final products Deliver them to the customer Where is a supply chain’s revenue generated? And where are costs incurred?
14
Conflicting Objectives
The Challenge Uncertainty Can cripple the supply chain Forecasting is not the Solution! Conflicting Objectives Think Global, not Local Competition is between supply chains, not single companies Evolving Nature of Business Shortening Product Lifecycles Off-shoring, Outsourcing
15
Uncertainty Propagates through the network and distorts demand
SYST 4050 Slides Uncertainty Propagates through the network and distorts demand Production Plan Warehouse Orders Retailer Orders Volumes Actual Consumer Demand What is shown here is how divergent these various forecasts are in relation to real demand. Why?? Because they are developed independently from each other and are dated, and unconnected to each other and the daily fluctuations in the market Time Source: Tom Mc Guffry, Electronic Commerce and Value Chain Management, 1998 Chapter 1
16
What Management Gets... Volumes Time Consumer Demand Production Plan
SYST 4050 Slides What Management Gets... Production Plan Volumes Consumer Demand Time Chapter 1
17
What Management Wants…
SYST 4050 Slides What Management Wants… Production Plan Volumes Consumer Demand Time Chapter 1
18
What is Supply Chain Management?
Supply Chain Management is Risk Management! Peanut Butter Anyone?
19
Conflicting objectives across the supply chain
SYST 4050 Slides Conflicting objectives across the supply chain Manufacturer Distributor Retailer Customer Large production batches Low inventory Few DCs Few stores Low inventory Little variety Close to DCs Convenience Short lead time Large variety of products Large shipments Chapter 1
20
Extended Scope (Remember Topper…)
Source: line56.com
21
What is Supply Chain Management?
Supply Chain Management is Process Management! Cross-functional Inter-organizational
22
The Evolving Nature of Business
Trends in U.S. Employment Goods vs. Services Tangible Intangible Uniform, efficient processes Customized, less efficient pr. Uniform output Specialized output Mnfctrd before purchase Performed after purchase Customer not involved Customer participates “Low or No-touch” “High-touch”… Output can be stored Output is perishable Easier to measure Harder to measure
23
What is Supply Chain Management?
Supply Chain Management is Service Management! Quality Management Queueing Revenue Management
24
Sketch That Chain! Celestial Seasonings Interceptor body armor Netflix
Intermezzo Sketch That Chain! Celestial Seasonings Interceptor body armor Netflix
25
Then, What is Supply Chain Management!
From Execution: Production scheduling Distribution scheduling and routing Customs Brokerage Strategy Planning Execution From The Sunday times november 23, 2002 “Can suppliers bring down your firm? A thunderstorm put Ericsson out of the mobile-phone industry. Could such a disaster happen to you? ”
26
Then, What is Supply Chain Management!
To Planning: Workforce & Production planning Inventory policies Supply Allocation Strategy Planning Execution From CNNMONEY.COM February 26, 2009 “Macy’s reined in inventories and offered exclusive merchandise from Martha Stewart and Tommy Hilfiger in the period to keep sales from declining as much as at Kohl’s Corp. and J.C. Penney Co.”
27
Then, What is Supply Chain Management!
And Strategy: Network design Sell direct or through retailers? Outsource or in-house? Strategy Planning Execution Consider The IMPACT: Walmart: “Every Day Low Prices” Hyundai: “10-year warranty program” Costco: “90-day return program
Similar presentations
