VIEWS: 22 PAGES: 10 POSTED ON: 10/14/2012
Basics of Supply Chain Management 1 What Is the Supply Chain? • Also referred to as the logistics network • Suppliers, manufacturers, warehouses, distribution centers and retail outlets – “facilities” Suppliers Manufacturers Warehouses & Customers Distribution Centers and the • Raw materials • Work-in-process (WIP) inventory Transportation Transportation • Finished products Costs Costs Material Costs Transportation Manufacturing Costs Inventory Costs Costs that flow between the facilities 2 The Supply Chain Suppliers Manufacturers Warehouses & Customers Distribution Centers Transportation Transportation Costs Costs Material Costs Transportation Manufacturing Costs Inventory Costs Costs 3 The Supply Chain – Another View Plan Source Make Deliver Buy Suppliers Manufacturers Warehouses & Customers Distribution Centers Transportation Transportation Material Costs Costs Costs Transportation Manufacturing Costs Inventory Costs Costs 4 Supply Chain Management – Key Issues • Overcoming functional silos with conflicting goals Customer Service/ Purchasing Manufacturing Distribution Sales High Low Low Few inventories change- invent- pur- High service overs ories chase levels price Regional Stable Low stocks schedules trans- Multipl e Long run portatio vendors lengths n SOURCE MAKE DELIVER SELL 5 Supply Chain Management – Key Issues ISSUE CONSIDERATIONS Network Planning • Warehouse locations and capacities • Plant locations and production levels • Transportation flows between facilities to minimize cost and time Inventory Control • How should inventory be managed? • Why does inventory fluctuate and what strategies minimize this? Supply Contracts • Impact of volume discount and revenue sharing • Pricing strategies to reduce order-shipment variability Distribution Strategies • Selection of distribution strategies (e.g., direct ship vs. cross-docking) • How many cross-dock points are needed? • Cost/Benefits of different strategies Integration and Strategic • How can integration with partners be achieved? Partnering • What level of integration is best? • What information and processes can be shared? • What partnerships should be implemented and in which situations? Outsourcing & Procurement • What are our core supply chain capabilities and which are not? Strategies • Does our product design mandate different outsourcing approaches? • Risk management Product Design • How are inventory holding and transportation costs affected by product design? • How does product design enable mass customization? 6 Supply Chain Collaboration • Cornerstone of effective SCM • The focus of many of today’s SCM initiatives • The only method that has the potential to eliminate or minimize the Bullwhip effect Retailers Suppliers Synchronized Manufacturer Production Scheduling Collaborative Distributors/ Demand Collaborative Wholesalers Planning Product Development Collaborative Logistics Planning •Transportation services •Distribution center services Logistics Providers 7 Emerging Best Practices in SCM Strategy 8 Why Is SCM Difficult? Plan Source Make Deliver Buy • Uncertainty is inherent to every supply chain – Travel times – Breakdowns of machines and vehicles – Weather, natural catastrophe, war – Local politics, labor conditions, border issues • The complexity of the problem to globally optimize a supply chain is significant – Minimize internal costs – Minimize uncertainty – Deal with remaining uncertainty 9 Thank you….
Pages to are hidden for
"Basics of Supply Chain Management"Please download to view full document