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Lamb, Hair, McDaniel

Lamb, Hair, McDaniel. 2010-2011. CHAPTER 14. Supply Chain Management. Learning Outcomes. LO 1 Define the terms supply chain, supply chain management, and supply chain orientation, and discuss the benefits of supply chain management

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Lamb, Hair, McDaniel

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  1. Lamb, Hair, McDaniel 2010-2011 CHAPTER 14 Supply Chain Management

  2. Learning Outcomes LO 1 Define the terms supply chain, supply chain management, and supply chain orientation, and discuss the benefits of supply chain management LO 2 Discuss the concept of supply chain integration and explain why each of the six types of integration is important LO 3 Identify the eight key processes for excellent supply chain management and discuss how each of these processes impacts the end customer

  3. Learning Outcomes LO 4 Discuss the key strategic decisions supply chain managers must make when designing their companies’ supply chains LO 5 Discuss new technology and emerging trends in supply chain management.

  4. Supply Chains and Supply Chain Management Define the terms supply chain, supply chain management, and supply chain orientation, and discuss the benefits of supply chain management LO1 4

  5. Supply Chains Supply Chain The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function LO1 5

  6. Supply Chains A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value Supply Chain Management LO1 6

  7. Supply Chain Management Communicator of customer demand from point of sale to supplier Physical flow process that engineers the movement of goods LO1

  8. Supply Chains LO1 8

  9. Supply Chain Managers • Supply chain managers are responsible for : • Making strategic decisions • Management of information through supply chain • Coordinating relationships between company and external partners LO1 9

  10. Benefits of Supply Chain Management • Supply chain oriented companies commonly report: • Lower inventory, transportation, warehousing, and packaging costs • Greater supply chain flexibility • Improved customer service • Higher revenues • Increased profitability LO1 10

  11. Supply Chain Integration Discuss the concept of supply chain integration and explain why each of the six types of integration is important LO2 11

  12. Supply Chain Integration Material and service supplier Integration Relationship Integration Internal Operations Integration Measurement Integration Customer Integration Technology and planning Integration Firm-to-Firm Social Interactions Operational Planning and Control Customer Integration LO2 12

  13. Supply Chain Integration Relationship Integration The ability of two or more companies to develop social connections that serve to guide their interactions when working together. Role Specificity When each firm in a supply chain has clarity in terms of knowing which firm is the leader, which firms are the followers, and which responsibilities are assigned to each firm. LO2 13

  14. Measurement Integration The performance assessment of the supply chain as a whole that also holds each individual firm or business unit accountable for meeting its own goals Measurement Integration The creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain Technology and planning integration LO2 14

  15. Internal Operations Integration Links internally performed work into a seamless process that stretches across departmental and/or functional boundaries, with the goal of satisfying customer requirements Internal Operations Integration A competency that enables firms to offer long-lasting, distinctive, value-added offerings to those customers who represent the greatest value to the firm or supply chain Customer Integration LO2 15

  16. Key Processes of Supply Chain Management Identify eight key processes of excellent supply chain management, and discuss how each of these processes impacts the end customer LO3 16

  17. Key Processes LO3 17

  18. Customer Relationship Management The prioritization of a firm’s marketing focus on different customer groups according to each group’s long-term value to the company or supply chain; designed to identify and build relationships with good customers. Customer Relationship Management Process LO3 18

  19. Customer Service Management Customer Service Management Process A multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced; designed to ensure that customer relationships remain strong. LO3 19

  20. Demand Management The alignment of supply and demand throughout the supply chain to anticipate customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior. Demand Management Process LO3 20

  21. Order Fulfillment A supply chain management process that involves generating, filling, delivering, and providing on-the-spot service for customer orders. Order Fulfillment Process LO3 21

  22. Manufacturing Flow Management Manufacturing Flow Management Process A process that ensures that firms in the supply chain have the resources they need LO3 22

  23. Supplier Relationship Management A supply chain management process that supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers Supplier Relationship Management Process LO3 23

  24. Product Development and Commercialization The group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms. Product Development and Commercialization Process LO3 24

  25. Returns Management A process that enables firms to manage volumes of returned product efficiently, while minimizing costs and maximizing the value of the returned assets to the firms in the supply chain. Returns Management Process LO3 25

  26. Key Processes of Supply Chain Management LO3 26

  27. Managing Logistical Components Describe the logistical components of the supply chain LO4 27

  28. Sourcing & Procurement Production Scheduling SupplyChainTeam Order Processing Logistics Information System Inventory Control Warehouse & Materials Handling Transportation Logistical Components of the Supply Chain LO4

  29. Sourcing and Procurement • Plan purchasing strategies • Develop specifications • Select suppliers • Negotiate price and service levels • Reduce costs The Role of Purchasing: LO4

  30. Traditional Focus Customer Focus Push / Pull Strategy Push Pull Start of Production Inventory-Based Customer-Order Based Manufacturing Mass Production Mass Customization Production Scheduling LO4

  31. A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line. Just-in-Time Manufacturing JIT LO4

  32. Benefits of JIT • Reduces raw material inventories • Shortens lead times • Creates better supplier relationships • Reduces production and storeroom costs • Reduces paperwork LO4

  33. Materials Handling Functions Receive goods into warehouse Identify, sort, and label goods Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment LO4

  34. Transportation Airways Water Pipelines Motor Carriers Railroads LO4

  35. Receive high-quality parts Meet supplier delivery commitments Have a crisis management plan JIT Requirements LO4

  36. Information technology that replaces paper documents that accompany business transactions with electronic transmission of the information. http://www.walmartstores.com Online Order Processing ElectronicDataInterchange LO4

  37. A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand. Order Processing Inventory ControlSystem LO4

  38. Materials Requirement Planning(MRP) An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. Distribution Resource Planning (DRP) An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer. Order Processing LO4

  39. Receive goods into warehouse Identify, sort, and label goods Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment MaterialsHandling Functions LO4

  40. Airways Water Pipelines Motor Carriers Railroads Transportation LO4

  41. Transportation Mode Choice • Cost • Transit time • Reliability • Capability • Accessibility • Traceability LO4 41

  42. Criteria for RankingModes of Transportation LO4 Lowest Highest Relative Cost Truck Rail Pipe Water Air Transit Time Water Rail Pipe Truck Air Reliability Pipe Truck Rail Air Water Capability Water Rail Truck Air Pipe Accessibility Truck Rail Air Water Pipe Traceability Air Truck Rail Water Pipe 42

  43. Trends in Supply Chain Management Discuss new technology and emerging trends in supply chain management LO5 43

  44. Trends in Supply Chain Management Advanced computer technology Outsourcing of logistics functions Electronic distribution Globalization of supply chain management Outsourcing of logistics functions LO5 44

  45. Advanced computer technology Outsourcing of logistics functions Electronic distribution Trends in Supply Chain Management LO5

  46. Advanced Computer Technology • Automatic identification systems - Bar coding - Radio frequency technology • Communications technology • Supply chain software systems LO5

  47. Outsourcing Logistics Functions • Reduce inventories • Locate stock at fewer plants and distribution centers • Provide same or better levels of service Outsourcing Benefits LO5

  48. Green Supply Chain Management • Requires integrating green thinking into all aspects of the supply chain • Green materials sourcing • Environmental impact of packaging, shipment, use • Incorporate end of life management • Recycling • Clean disposal LO5

  49. AMR Research Healthcare Top 25 Ranked based on building supply chain excellence and innovation to drive business results in demand-driven supply chains • Johnson & Johnson • Sisters of Mercy • Cardinal Health • Owens & Minor • McKesson • CVS Caremark • Abbott • Novartis • BD (Becton, Dickinson) • Genentech • Alcon Laboratories • Medtronic • Boston Scientific • BJC HealthCare • Roche • Amgen • Mayo Clinic • Wyeth • GlaxoSmithKline • AstraZeneca • AmerisourceBergen • Walgreens • Covidien • Cleveland Clinic • Merck Source: http://www.amrresearch.com/Content/View.aspx?compURI=tcm:7-49119 LO5

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