Integrating the Supply Chain -RKS

7/29/2019 Integrating the Supply Chain -RKS

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Integration in the supply chainTHE CONCERN IS

How can we integrate supplychain : internally, externally

and if possible electronically?


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Thedegreetowhichthefirmcanstrategicallycollaboratewiththeirsupplychainpartnersandcollaborativelymanagetheintra-andinter-organizationprocessesto

achievetheeffectiveandefficientflowsof Productandservices Information Money FeedBack

Withtheobjectiveofprovidingthemaximumvaluetothecustomeratlowcostandhighspeed

Integration in the supply chain


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Measures of integration Access to planning system

Sharing production plans Joint EDI access / networks

Knowledge of inventory mix / levels

Packaging customization

Delivery frequencies Common logistical equipment / containers

Common use of third-party logistics



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Internal integration: function to function


Purchasing Production Distribution

Low price

Unreliable deliveryand low quality

High productivity ofmachine and labor

High batch size

Poor available

distribution

Keep warehousingoperation smooth

Post-manufacturingoperation being resisted

Additional complexity of

customizing products


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Inter- Intra Company collaboration

Information & Decision Flow

RAWMATERIALS

EN

DCUSTOMERS

Information & Knowledge Flow

Products & Services Flow

Financial Flow

Material and Money Flow

Enterprise

A

Enterprise

BInformation & Knowledge Flow

Products & Services Flow

Financial Flow


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Integration in the supply chain Electronic collaboration

TransactionalThe electronic execution oftransaction

Information sharingThe electronic sharing orexchange of information

Collaboration planningStrategic, tactical andoperational exchange

Electronic

collaboration


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Informationflow in apparel

supply chain


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Efficient consumer responseKey issue

1How can collaboration be extendedacross the supply chain to focuson meeting consumer demand?


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Efficient consumer response Category management

Establishinfrastructure

Optimizeintroductions

Optimizeassortments

Optimizepromotions

Integratedsuppliers

Synchronizedproduction

Continuousreplenishment

Automatedstore ordering

Categorymanagement

Productreplenishment

Reliableoperations

Cross-docking

EDI EFT

Item coding

and databasemaintenance ABC

Enabling

technologies


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Efficient consumer response Enabling technologies

Scanning data

Data warehousing Data mining

The data include

Demand / consumption / sales information

Cash flow Stocks of finished goods / work in progress

Delivery and output status


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Efficient consumer responseCategory

managementContinuous

replenishmentEnabling

technologies

Required

capability

Accountmanagement

Demandmanagement

Multifunctionalselling teams

Price listrestructuring

Effective andcustomizedpromotions

Joint inventorymanagement

Cross-dockoperations

Continuousreplenishment

Effectivelogistics andproduct flows

Quick response

Effectiveinformationsharing

Automatedordergeneration

Bar-codingand the use ofother scanningtechnology


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Collaborative planning, forecasting and

replenishmentKey issue

1How can collaboration be extendedto strategic as to well asoperational levels?


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Collaborative planning, forecasting and

replenishment CPFR Model1. Develop front-end agreement

2. Create joint business plans

3. Create individual sales forecasts4. Identify exceptions to sales forecasts

5. Resolve / collaborate on exception items

6. Create order forecast

7. Identify exceptions to order forecast8. Resolve / collaborate on exception items

9. Generate orders

Planning

Forecasting

replenishment


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16/25Buyer

Seller

Goal : Link buyer and SellerElectronically

Wal-marts CPFR Process

GENERATE ORDER

FRONT END AGREEMENT

JOINT BUSINESS PLAN

Collaborative

Planning

CREATE SALES FORECAST

IDENTIFY EXCEPTIONS

RESOLVE EXCEPTIONS

Collaborative

Forecasting

CREATE ORDER FORECAST

IDENTIFY EXCEPTIONS

RESOLVE EXCEPTIONS

CollaborativeReplenishment


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Wal-Marts CPFR Program CPFR has blurred the lines between supplier and

customer

Suppliers buy into their program because they have to

to work with Wal-Mart, but more importantly, becauseWal-Marts Systems provide increased profits for Wal-Mart and their suppliers

Wal-Mart teaches their suppliers how to minimize

shipping, inventory and other costs by showing themtheir own model.


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Managing supply chain relationshipsKey issue

1How can broader-basedrelationships be formed betweentrading partners in the supply chain?


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Managing supply chain relationships Creating closer relationships

Bow tie

R&D

Logistics

Informationsystem

Marketing

Operations

Arm

s length transaction

Informationsystem

Marketing

Operations

Informationsystem

Partnership

Informationsystem

R&D

Logistics

Diamond

supplier customer supplier customer


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Managing supply chain relationships Factors in forming supply chain relationships The order winner The method making sourcing decisions The nature of electronic collaboration The attitude to capacity planning Call-off requirements Price negotiations Managing product quality

Managing research and development The level of pressure


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A framework for managing the

supply chainKey issue

1What are the managementimplications of integrating thesupply chain?


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supply chain

1Develop a supply

chain strategy

2Gather supply chain

information

3Develop effectivepartnerships and

alliances

4Pilot new supplychain solutions

5Organize for supplychain performance

6Develop measurementsystem for supply chain

performance


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supply chain Develop a supply chain strategy

Customer service requirements

Plant and distribution center network design

Inventory management

Outsourcing and third-party logistics relationships

Business processes

Organizational design and training requirements

Performance metrics and goals


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supply chain Pilot new supply chain solutions

Successful supply chain improvement including

Involvement of key stakeholders, suppliers, customers andemployees

Selection of scope and environment, focusing on avoiding risk

Identification of the key questions that the pilot must answer


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supply chain

Develop measurement systems for supply chainperformance On time in full, outbound

On time in full, inbound Internal defect rates

New product introduction rate

Cost reduction

Stock turns Order to delivery lead time

Fiscal flexibility

Integrating the Supply Chain -RKS

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