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Supply chain management

Supply chain management. CHAPTER 6. History. "Supply chain management is essentially the optimization of material flows and associated information flows involved with an organization’s operations” (p. 331) 70s: Manual data entry and primarily custom programming – no common platform

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Supply chain management

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  1. Supply chain management CHAPTER 6

  2. History • "Supply chain management is essentially the optimization of material flows and associated information flows involved with an organization’s operations” (p. 331) • 70s: Manual data entry and primarily custom programming – no common platform • 80s: Common platforms occurred with mini-PCs. Still with custom codes • 90s: Common platforms and common codes based on Windows • End of 90s: Companies replaced old systems when the corruption was too high • Start of 00s: Internet took over as the transaction medium

  3. solutions • The history shows thatapplying information systems, companiescanenhance or radicallyimprovemanyaspects of the supplychain. Such as: • Reduction in paperwork, inventoryholdings and time • Lower SCM system purchase • Management coststhroughuse of online services • Sharing of demandas a part of ECR • Supplier becomesresponsible for item availability • Human errorreduced

  4. Upstream/downstream • Upstream • Buy-side e-commerce • Downstream • Sell-side e-commerce • Supply chainnetwork • More accuratereflection

  5. Logistics • The time-relatedpositioning of ressource, or the strategic management of the total supplychain • Inbound: Management of ressources entering on the buyer-side • Outbound: Management of ressources entering on the seller-side

  6. Push and Pull • Push supplychainmodel: A companycreates a product and pushes it to the costumers. ”This is a great product, now who shall we sell it to?” • Modern company using push SC model  Apple • Pull supply chain model: A company researches the costumers needs and creates a product upon that. • Modern company using pull SC model  custom computers (AlienWare)

  7. Value Chain • A model that considers how supply chain activities can add value to products and services delivered to the customer. • Benefits for the customer are created by reducing cost and adding value to customers: • within each element of the value chain such as procurement, manufacture, sales and distribution; • at the interface between elements of the value chain such as between sales and distribution. • In equation form this is: Value = (Benefit of each VC activity – Its cost) + (Benefit of each interface between VC activities – Itscost)

  8. Value chain model

  9. Value Stream • The set of all the specific actions required to bring a specific product through the three critical management tasks of any business: • 1 the problem-solving task [the processes of new product development and production launch] • 2 the information management task [the processes of order taking, scheduling to delivery] • 3 the physical transformation task [the processes of transforming raw materials to finished product delivered to customers]

  10. Value Network • Deise et al. (2000) describe value network management as: • “the process of effectively deciding what to outsource in a constraint-based, real-time environment based on fluctuation” • I.E. when a computer company outsources their information systems to the delivery company (Post Danmark)

  11. Virtual organization • An organization which uses information and communications technology to allow it to operate without clearly defined physical boundaries between different functions • It provides customized services by outsourcing production and other functions to third parties.

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