1. Supply Chain Management11
Supply Chain Management

2. Supply Chain Management
Supply Chain: the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service.
Sometimes referred to as value chains

3. Facilities Warehouses Factories Processing centers
Distribution centers
Retail outlets
Offices

4. Functions and Activities
Forecasting
Purchasing
Inventory management
Information management
Quality assurance
Scheduling
Production and delivery
Customer service

5. Typical Supply Chains Purchasing Receiving Storage Operations
Production
Distribution

6. Typical Supply Chain for a Manufacturer
Figure 11.1a
Supplier
Storage }
Mfg.
Dist.
Retailer
Customer

7. Typical Supply Chain for a Service
Figure 11.1b
Supplier }
Storage
Service
Customer

8. Need for Supply Chain Management
Improve operations
Increasing levels of outsourcing
Increasing transportation costs
Competitive pressures
Increasing globalization
Increasing importance of e-commerce
Complexity of supply chains
Manage inventories

9. Benefits of Supply Chain Management
Lower inventories
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty
Integrates separate organizations into a cohesive operating system

10. Logistics
Logistics
Refers to the movement of materials and information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain

11. Materials Movement Figure 11.4 Work center Work center Storage
RECEIVING
Storage
Work
center
Work center
Shipping

12. E-Business
E-Business: the use of electronic technology to facilitate business transactions
Applications include
Internet buying and selling
Order and shipment tracking
Electronic data interchange

13. Disadvantages of E-Business
Customer expectations
Order quickly -> fast delivery
Order fulfillment
Order rate often exceeds ability to fulfill it
Inventory holding
Outsourcing loss of control
Internal holding costs

14. Reverse Logistics
Reverse logistics – the backward flow of goods returned to the supply chain
Processing returned goods
Sorting, examining/testing, restocking, repairing
Reconditioning, recycling, disposing
Gatekeeping – screening goods to prevent incorrect acceptance of goods
Avoidance – finding ways to minimize the number of items that are returned

15. Effective Supply Chain
Requires linking the market, distribution channels processes, and suppliers
Supply chain should enable members to:
Share forecasts
Determine the status of orders in real time
Access inventory data of partners

16. Creating an Effective Supply Chain
Develop strategic objectives and tactics
Integrate and coordinate activities in the internal supply chain
Coordinate activities with suppliers with customers
Coordinate planning and execution across the supply chain
Form strategic partnerships