Business Plug-in B8

1. Business Plug-in B8 SUPPLY CHAIN MANAGEMENT

2. BASICS OF SUPPLY CHAIN • The supply chain has three main links: • Materials flow from suppliers and their “upstream” suppliers at all levels • ______________ of materials into semifinished and finished products through the organization’s own production process • Distribution of products to customers and their “downstream” customers at all levels

3. BASICS OF SUPPLY CHAIN • Organizations must embrace technologies that can effectively manage supply chains

4. USING IT TO DRIVE THE SUPPLY CHAIN • The four primary drivers of supply chain management • Facilities • Inventory • Transportation • ____________ • Organizations use these four drivers to support either a supply chain strategy focusing on efficiency or a supply chain strategy focusing on ______________.

5. USING IT TO DRIVE THE SUPPLY CHAIN

6. FACILITIES DRIVER • Facility – processes or transforms inventory into another product, or stores the inventory before shipping to the next facility • Three primary facilities components • _________ • Capacity • Operational design

7. FACILITIES 1: Location • Location efficiency – centralize the location to gain economies of scale, which increases efficiency • Location effectiveness – ____________ the locations to be closer to the customers or suppliers, which increases effectiveness

8. FACILITIES 2: Capacity • Capacity efficiency – minimal excess capacity with the ability to produce only what is required • Capacity effectiveness – large amounts of excess capacity which can handle wide swings in __________

9. FACILITIES 3: Operational Design • Operational design efficiency – product focus design allows the facility to become highly efficient at producing one single product, increasing efficiency • Operational design effectiveness – ___________ focus design allows the facility to perform a specific function on many different types of products, increasing effectiveness

10. FACILITIES DRIVER

11. INVENTORY DRIVER • Inventory – offsets uncertainty in _________ and/or demand • Inventory management and control software – provides control and _________ to the status of individual items maintained in inventory • Two primary inventory components • Cycle inventory • Safety inventory

12. INVENTORY 1: Cycle Inventory • Cycle inventory – the ________ amount of inventory held to satisfy customer demands between inventory deliveries • Efficiency – holding _______ amounts of inventory and processing orders weekly or even daily • Effectiveness – holding large amounts of inventory and processing deliveries only once a month

13. INVENTORY 2: Safety Inventory • Safety inventory – extra inventory held due to uncertainty in supply and/or demand • Safety inventory efficiency – holding small amounts of safety inventory (____ uncertainty in supply/demand) • Safety inventory effectiveness – holding large amounts of safety inventory (high uncertainty in supply/demand)

14. INVENTORY DRIVER

15. TRANSPORTATION DRIVER • Transportation – moves inventories between the different stages in the supply chain • Two primary inventory components • Method of transportation • Transportation _________

16. TRANSPORTATION 1: Method of Transportation • Global inventory management system – provides the ability to locate, track, and ________ the movement of components or material anywhere upstream or downstream in the supply chain • Method of transportation efficiency • Method of transportation effectiveness

17. TRANSPORTATION 2: Transportation Route • Transportation planning software– tracks and ________ the movement of materials to ensure the delivery of materials and finished goods at the right time, the right place, and the lowest cost • Distribution management software – coordinates the transportation of materials from a manufacturer to distribution centers to the final customer • Transportation route efficiency • Transportation route effectiveness

18. TRANSPORTATION DRIVER

19. INFORMATION DRIVER • Information – an organization must decide what information it wants to share, and how it will share, with its supply chain partners • Two primary information components • Information sharing • Push versus ______ strategy

20. INFORMATION 1: Information Sharing • Information sharing efficiency – freely share large quantities of information to increase the speed and decrease the costs of supply chain processing • Information sharing effectiveness – share only selected information with certain entities, which will _________ the speed and increase the costs of supply chain processing

21. INFORMATION 2: Push vs. Pull Information Strategy • Pull information strategy (efficiency) • Supply chain partners are responsible for pulling all relevant information • Pull technology – pulls information • Push information strategy (effectiveness) • Organization takes the responsibility to push information out to its supply chain partners • Push technology – sends information

22. INFORMATION DRIVER

23. APPLYING A SUPPLY CHAIN DESIGN

24. FUTURE SUPPLY CHAIN TRENDS • Fastest growing SCM components • Supply chain _______ management (SCEM) • Real-time issues resolution • Selling chain management • In the selling phase • Collaborative engineering • In the design phase • Collaborative demand planning