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

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

3. 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

4. Traditional supply chain
SUPPLIER
DISTRIBUTOR
CONSUMER
MANUFACTURER
RETAILER

5. Supply chain planning
PAYMENT FLOWS
INFORMATION FLOWS

6. 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

7. Supply chain execution
PRODUCT FLOWS

8. 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

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

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

12. 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

13. 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 /

14. 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

15. 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

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