1. 10 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Supply Chain Integration 10

2. 10 – 2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Supply Chain Integration Upstream Tier 3Tier 2Tier 1 Downstream Information flows Cash flows Tomato suppliers Tomato paste factories Tomato grading stations Retail sales Consumers Ketchup factory Figure 10.1 – Supply Chain for a Ketchup Factory

3. 10 – 3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Supply Chain Dynamics Consumers’ daily demands Retailers’ daily orders to manufacturer Manufacturer’s weekly orders to package supplier Package supplier’s weekly orders to cardboard supplier 9,000 7,000 5,000 3,000 0 Order quantity Month of April Day 1Day 30Day 1Day 30Day 1Day 30Day 1Day 30 Figure 10.2 – Supply Chain Dynamics for Facial Tissue

4. 10 – 4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Integrated Supply Chain (SCOR model) First-Tier SupplierService/Product Provider Support Processes External Suppliers Support Processes Supplier relationship process New service/ product development process Order fulfillment process Business- to-business (B2B) customer relationship process External Consumers Supplier relationship process New service/ product development process Order fulfillment process Business- to-customer (B2C) customer relationship process Figure 10.3 – External Supply Chain Linkages

5. 10 – 5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. A. New Service or Product Development DesignAnalysisDevelopmentFull Launch  Service or product not profitable  Need to rethink the new offering or production process  Post-launch review Figure 10.4 – New Service/Product Development Process

6. 10 – 6 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. 4 Kitting 8 Delivery 7 Boxing and shipping Order Fulfillment Process (include Production and Distribution) 6 Testing and system integration 3 Traveler Sheet 2 JIT Inventory 1 (d) Direct relationship sales 1 (a) Web site 1 (b) Voice-to-voice 1 (c) Face-to-face 5 Assemble to order Figure 10.5 – Dell’s Order Fulfillment Process

7. 10 – 7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Performance Measures TABLE 10.1 | SUPPLY CHAIN PROCESS MEASURES Customer RelationshipOrder FulfillmentSupplier Relationship  Percent of orders taken accurately  Time to complete the order placement process  Customer satisfaction with the order placement process  Customer’s evaluation of firm’s environmental stewardship  Percent of incomplete orders shipped  Percent of orders shipped on-time  Time to fulfill the order  Percent of botched services or returned items  Cost to produce the service or item  Customer satisfaction with the order fulfillment process  Inventory levels of work- in-process and finished goods  Amount of greenhouse gasses emitted into the air  Percent of suppliers’ deliveries on-time  Suppliers’ lead times  Percent defects in services and purchased materials  Cost of services and purchased materials  Inventory levels of supplies and purchased components  Evaluation of supplier’s collaboration on streamlining and waste conversion  Amount of transfer of environmental technologies to suppliers

8. 10 – 8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Closed Loop Supply Chain (from consumption back to origin) Waste disposal Recycle parts and materials RemanufactureDirect reuseRepair Product information Forward logistics flow Reverse logistics flow Returns processor Figure 10.6 – Flows in a Closed-Loop Supply Chain CustomersDistribution/RetailersProduction process New service/product development process