Supply Chain Lect1

8/9/2019 Supply Chain Lect1

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Activity frActivity fr

Evolution of Supply Chain Management


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Supply Chain Schematic


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Supply Chain Features

Functions: Logistics, Purchasing, Marketing,Operations, . . .

Institutions: Manufacturers, Retailers, Logistics

Service Providers, . . .

Behaviors

Power/Dependence

Conflict Competition

Cooperation, e.g. sharing information


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Physical Promotional Financial

Logistics Marketing Finance and

Accounting

Service Sales Stimulate Sales Pay Bills

Transportation Warehousing

Inventory

Management

Advertising Personnel Selling

Sales Promotion

Customer Service

Invoicing Payment

Supply Chain Flows


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SCM

Logistics

SCM

Logistics

Logistics

SCM SC

MLogistics

Traditionalist

Unionis

t

Re-labeling

Intersectionist

SCM versus Logistics: FourPerspectives


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Logistics

SCM

Logistics hires supply chain analysts to focuson cross-functional, inter-organizational issues.


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The logistics community has tended

to view supply chain management aslogistics outside the firm.


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SCM

Logistics

SCM

Logistics

Logistics

SCM SC

MLogistics

Traditionalist

Unionis

t

Re-labeling

Intersectionist

SCM versus Logistics: FourPerspectives


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Logistics

SCM

Logistics hires supply chain analysts to focuson cross-functional, inter-organizational issues.


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The logistics community has tended

to view supply chain management aslogistics outside the firm.


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Logistics

SCM

Logistics Manager Supply Chain Manager


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do not distinguish between logistics

and supply chain management (SCM).

supply chain = logistics network


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SC

MLogistics

SCM = purchasing + logistics + operations + marketing + . . .


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SCM: management of 8 key businessprocesses:

1. Customer relationship management2. Customer service management3. Demand management4. Order fulfillment

5. Manufacturing flow management6. Procurement7. Product development & commercialization8. Returns

Stock & Lambert (2001)


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Mentzer et al. (2001)

all the traditional business functionsshould be included1. Marketing & Sales2. Research & development

3. Forecasting4. Production5. Purchasing6. Logistics

7. Information systems8. Finance9. Customer service


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SCM Logistics

SCM staff function; internal consultants


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Intersectionist

SCM considers strategic, integrative

elements from several functional areas(logistics, purchasing, operations, andmarketing). However, it does not getinvolved in tactical elements, such as

picking orders in a warehouse.


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Logistics Defined

Logistics

controlliof raw

Supply Chain Management Defined

SCM is th


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The Logistics/SC Mission

Getti


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A Revised Strategy is Generating

Great Top Management InterestHistorical perspective of distribution:

The last frontier ofcost

economies

The contemporary view:

Distribution is a new frontier fordemand generationa competitiveweapon.

Peter Drucker, 1962

Both views are nowimportant!


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Customers

Transportation

Inventory

or supply source

Customer order processing (and

transmittal)

Customers

Transportation

Inventory

or supply source

Customer order processing (and

transmittal)

Critical Customer ServiceLoop


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Costs are

Customers

Significance of Logistics


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Scope of the Supply Chain for MostFirms

Physical distributionPhysical supply(Materials management)

Business logistics

Sources ofsupply

Plants/operations

Customers

TransportationInventory maintenanceOrder processingAcquisition

Protective packagingWarehousingMaterials handlingInformation maintenance

TransportationInventory maintenanceOrder processingProduct scheduling

Protective packagingWarehousingMaterials handlingInformation maintenance

Focus firms internal supply chain


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Primary

-Setting customer service goals-Transportation-Inventory management- Location

Secondary, or supporting- Warehousing-Materials handling

-Acquisition (purchasing)-Protective packaging-Product scheduling-Order processing

Key Activities/Processes


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Reality of SC Scope


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SUPPLYCHAIN

MANAGEMENT

In

terfuncti

onalcoordin

atio

nInt

erorg

anizationa

lcoord

in

ation

Activity and processadministration

The Multi-Dimensions of SC


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PLAN

NING

ORGA

NIZING

CONTROLLING

Transport Strategy

Transport fundamentals

Transport decisionsCustomer

service goals

The product

Logistics service Ord. proc. & info. sys.

Inventory Strategy

Forecasting

Inventory decisions

Purchasing and supply

scheduling decisions

Storage fundamentals

Storage decisions

Location Strategy

Location decisions

The network planning process

PLAN

NING

ORGA

NIZING

CONTROLLING

Transport Strategy

Transport fundamentals

Transport decisionsCustomer

service goals

The product

Logistics service Ord. proc. & info. sys.

Inventory Strategy

Forecasting

Inventory decisions

Purchasing and supply

scheduling decisions

Storage fundamentals

Storage decisions

Location Strategy

Location decisions

The network planning process

Study Framework

The focus ishere


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PRODUCTION/OPERATIONSSample activities:Quality controlDetailed productionscheduling

Equipmentmaint.Capacity planningWork measurement

&standards

LOGISTICSSampleactivities:TransportInventory

Orderprocessing

Materials

handling

Interface

activities:Productscheduling

Plantlocation

Purchasing

MARKETINGSampleactivities:PromotionMarketresearch

Productmix

Sales forcemanagement

Interfaceactivities:

Customerservicestandards

PricingPackagingRetaillocation

Production-logisticsinterface

Marketing-logisticsinterface

Relationship of Logistics toMarketing and Production

Internal Supply Chain


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Relationship of Logistics to MarketingProduct

PricePromotion

Place-

Customerservice levels

Inventorycarrying

costsLot

quantitycosts

Orderprocessing

and

information

Transport costs

Warehousing costs

Ma

rk

etin

g

Lo

gi

st

ics


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Relationship of Logistics to Production

Coordinates through scheduling and strategymake-to-order or make-to-stock

An integral part of the supply chain

Affects total response time for customers

Shares activities such as inventory planningCosts are in tradeoff

Production lot quantities affect inventory levels andtransportation efficiency

Production response affects transportation costsand customer service

Production and warehouse location are interrelated


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Contemporary Logistics Terms

Value stream/logistics processQuick response and flexible manufacturingMass customization

Supply chain management/collaborativelogisticsReverse logisticsService logisticsContinuous replenishmentLean logisticsIntegrated logistics

Supply Chain Lect1

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Transcript of Supply Chain Lect1