1. INTRODUCTION TO SUPPLY CHAIN MANAGEMENTswbplus.bsz-bw.de/bsz275470091inh.pdf · INTRODUCTION TO...
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1. INTRODUCTION TO SUPPLY CHAIN MANAGEMENT 1.1 What Is Supply Chain Management? 1.2 The Development Chain 1.3 Global Optimization 1.4 Managing Uncertainty and Risk 1.5 The Evolution of Supply Chain Management 1.6 The Complexity 1.7 Key Issues in Supply Chain Management 1.8 Book Objectives and Overview Discussion Questions CASE: MEDITECH SURGICAL 2. INVENTORY MANAGEMENT AND RISK POOLING CASE: STEEL WORKS, INC. 2.1 Introduction 2.2 Single Stage Inventory Control 2.2.1 The Economic Lot Size Model 2.2.2 The Effect of Demand Uncertainty 2.2.3 Single Period Models 2.2.4 Initial Inventory 2.2.5 Multiple Order Opportunities 2.2.6 Continuous Review Policy 2.2.7 Variable Lead Times 2.2.8 Periodic Review Policy 2.2.9 Service Level Optimization 2.3 Risk Pooling CASE: RISK POOLING 2.4 Centralized Versus Decentralized Systems 2.5 Managing Inventory in the Supply Chain 1 1 3 4 5 7 11 12 16 17 18 27 27 30 33 33 35 36 39 41 41 45 45 47 48 49 51 52 XXI
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Transcript of 1. INTRODUCTION TO SUPPLY CHAIN MANAGEMENTswbplus.bsz-bw.de/bsz275470091inh.pdf · INTRODUCTION TO...
1. INTRODUCTION TO SUPPLY CHAIN MANAGEMENT
1.1 What Is Supply Chain Management?
1.2 The Development Chain
1.3 Global Optimization
1.4 Managing Uncertainty and Risk
1.5 The Evolution of Supply Chain Management
1.6 The Complexity
1.7 Key Issues in Supply Chain Management
1.8 Book Objectives and Overview
Discussion Questions
CASE: MEDITECH SURGICAL
2. INVENTORY MANAGEMENT AND RISK POOLING
CASE: STEEL WORKS, INC.
2.1 Introduction
2.2 Single Stage Inventory Control2.2.1 The Economic Lot Size Model
2.2.2 The Effect of Demand Uncertainty
2.2.3 Single Period Models
2.2.4 Initial Inventory
2.2.5 Multiple Order Opportunities
2.2.6 Continuous Review Policy
2.2.7 Variable Lead Times
2.2.8 Periodic Review Policy
2.2.9 Service Level Optimization
2.3 Risk Pooling
CASE: RISK POOLING
2.4 Centralized Versus Decentralized Systems
2.5 Managing Inventory in the Supply Chain
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XXI
XXI I CONTENTS
2.6 Practical Issues 55
2.7 Forecasting 56
2.7.1 Judgment Methods 57
2.7.2 Market Research Methods 58
2.7.3 Time-Series Methods 58
2.7.4 Causal Methods 59
2.7.5 Selecting the Appropriate Forecasting Technique 59
Summary 59
Discussion Questions 60
CASE: SPORT OBERMEYER 63
3. NETWORK PLANNING 77
CASE: THE Bis CORPORATION 77
3.1 Introduction 79
3.2 Network Design 79
3.2.1 Data Collection 80
3.2.2 Data Aggregation 82
3.2.3 Transportation Rates 85
.3.2.4 Mileage Estimation 87
5.2.5 Warehouse Costs 88
3.2.6 Warehouse Capacities 89
3.2.7 Potential Warehouse Locations 90
3.2.S Service Level Requirements 90
3.2.9 Future Demand 90
3.2.70 Mode/ and Daw Validation 90
3.2,77 Solution Techniques 91
3.2J2 £ey Features of a Network Configuration SCP 94
3.5 Inventory Positioning and Logistics Coordination 95
3.3 J Strategic Safety Stock 95
CASE: ELECCOMP INC. 97
3.3.2 Integrating Inventory Positioning and Network Design 102
5.4 Resource Allocation 104
Summary 107
Discussion Questions 108
CASE: H. C. STARCK, INC. 109
4. SUPPLY CONTRACTS 123
CASE: AMERICAN TOOL WORKS 123
4.1 Introduction 124
4.2 Strategic Components 125
4.2. i Supply Contracts 125
4.2,2 Limitations 130
Contracts for Make-to-Stock/Make-to-Order Supply Chains 131
Contracts with Asymmetric Information 136
CONTENTS XXI I I
4.5 Contracts for Nonstrategic Components 136Summary 138Discussion Questions 139
5. THE VALUE OF INFORMATION 143
CASE: BARILLA SpA (A) 143
5.7 Introduction 1535.2 The Bullwhip Effect 153
5.2.1 Quantifying the Bullwhip Effect 156
5.2.2 The Impact of Centralized Information on the Bullwhip Effect 158
5.2.3 Methods for Coping with the Bullwhip Effect 161
5.3 Information Sharing and Incentives 1625.4 Effective Forecasts 1645.5 Information for the Coordination of Systems 1645.6 Locating Desired Products 1655.7 Lead-Time Reduction 1665.8 Information and Supply Chain Trade-offs 166
5.8.1 Conflicting Objectives in the Supply Chain 166
5.8.2 Designing the Supply Chain for Conflicting Goals 167
5.9 Decreasing Marginal Value of Information 170Summary 171Discussion Questions 171
CASE: REEBOK NFL REPLICA JERSEYS: A CASE FOR POSTPONEMENT 172
6. SUPPLY CHAIN INTEGRATION 179
CASE: DELL INC.: IMPROVING THE FLEXIBILITY OF THE DESKTOP PC SUPPLY CHAIN 179
6.1 Introduction 1886.2 Push, Pull, and Push-Pull Systems 188
6.2.7 Push-Based Supply Chain 188
6.2.2 Pull-Based Supply Chain 189
6.2.3 Push-Pull Supply Chain 190
6.2.4 Identifying the Appropriate Supply Chain Strategy 191
6.2.5 Implementing a Push-Pull Strategy 193
6.3 The Impact of Lead Time 1956.4 Demand-Driven Strategies 1976.5 The Impact of the Internet on Supply Chain Strategies 198
6.5.1 What Is E-Business? 200
6.5.2 The Grocery Industry 200
6.5.3 The Book Industry 201
6.5.4 The Retail Industry 201
6.5.5 Impact on Transportation and Fulfillment 202
Summary 203
Discussion Questions 203
CASE: THE GREAT INVENTORY CORRECTION 204
XXIV CONTENTS
7. DISTRIBUTION STRATEGIES 209
CASE: AMAZON.COM'S EUROPEAN DISTRIBUTION STRATEGY 209
7.1 Introduction 230
7.2 Direct Shipment Distribution Strategies 230
7.3 Intermediate Inventory Storage Point Strategies 2317.3.1 Traditional Warehousing 2317.3.2 Cross-Docking j 233
7.3.3 Inventory Pooling 234
7.4 Transshipment 239
7.5 Selecting an Appropriate Strategy 239
Summary 240
Discussion Questions 241
8. STRATEGIC ALLIANCES 243
CASE: HOW KIMBERLY-CLARK KEEPS CLIENT COSTCO IN DIAPERS 243
8.1 Introduction 246
8.2 A Framework for Strategic Alliances 247
8.3 Third-Party Logistics 2498.3.1 WhatIs3PL? 2498.3.2 Advantages and Disadvantages of 3PL 2508.3.3 3PL Issues and Requirements 2528.3.4 3PL Implementation Issues 253
8.4 Retailer-Supplier Partnerships 2548.4.1 Types of RSP 2548.4.2 Requirements for RSP 2558.4.3 Inventory Ownership in RSP 2568.4.4 Issues in RSP Implementation 2578.4.5 Steps in RSP Implementation 25 88.4.6 Advantages and Disadvantages of RSP 2588.4.7 Successes and Failures 259
5.5 Distributor Integration 260S.5.7 Types of Distributor Integration 261S.5.2 /sra&s m Distributor Integration 262
Summary 262
Discussion Questions 263
CASE: AUDIO DUPLICATION SERVICES, INC. (ADS) 263
CASE: THE SMITH GROUP 264
9. PROCUREMENT AND OUTSOURCING STRATEGIES 267
CASE: ZARA 267
9.1 Introduction 280
9.2 Outsourcing Benefits and Risks 281
9.3 A Framework for Buy/Make Decisions 283
CONTENTS XXV
9.4 Procurement Strategies 2859.4.1 Supplier Footprint 287
9.5 E-Procurement 290Summary 294Discussion Questions 294
CASE: SOLECTRON: FROM CONTRACT MANUFACTURER TO GLOBAL SUPPLY
CHAIN INTEGRATOR 295
10. GLOBAL LOGISTICS AND RISK MANAGEMENT 309
CASE: WAL-MART CHANGES TACTICS TO MEET INTERNATIONAL TASTES 309
10.1 Introduction 31210.1.1 Global Market Forces 313
10.1.2 Technological Forces 314
10.1.3 Global Cost Forces 314
10.1.4 Political and Economic Forces 314
10.2 Risk Management 315
10.2.1 Many Sources of Risks 315
70.2.2 Managing the Unknown-Unknown 31710.2.3 Managing Global Risks 321
10.2.4 Requirements for Global Strategy Implementation 322
10.3 Issues in International Supply Chain Management 32310.3.1 International versus Regional Products 323
10.3.2 Local Autonomy versus Central Control 324
10.3.3 Miscellaneous Dangers 325
10.4 Regional Differences in Logistics 32610.4.1 Cultural Differences 326
10.4.2 Infrastructure 326
10.4.3 Performance Expectation and Evaluation 327
10.4.4 Information System Availability 328
10.4.5 Human Resources 328
Summary 328
Discussion Questions 329
11. COORDINATED PRODUCT AND SUPPLY CHAIN DESIGN 331
CASE: HEWLETT-PACKARD: DESKJET PRINTER SUPPLY CHAIN 331
11.1 A General Framework 338
11.2 Design for Logistics 34211.2.1 Overview 342
11.2.2 Economic Packaging and Transportation 342
11.2.3 Concurrent and Parallel Processing 343
11.2.4 Standardization 345
11.2.5 Selecting a Standardization Strategy 348
77.2.6 Important Considerations 349
77.2.7 The Push-Pull Boundary 349
77.2.8 Case Analysis 350
XXVi CONTENTS
11.3 Supplier Integration into New Product Development 35211.3.1 The Spectrum of Supplier Integration 352
11.3.2 Keys to Effective Supplier Integration 353
11.3.3 A "Bookshelf of Technologies and Suppliers 354
11.4 Mass Customization 354
11.4.1 What Is Mass Customization? 354
11.4.2 Making Mass Customization Work 355
11.4.3 Mass Customization and Supply Chain Management 356
Summary 357
Discussion Questions 357
CASE: HEWLETT-PACKARD COMPANY: NETWORK PRINTER DESIGN FOR UNIVERSALITY 358
12. CUSTOMER VALUE 365
CASE: MADE TO MEASURE 365
12.1 Introduction 368
12.2 The Dimensions of Customer Value 369
12.2.1 Conformance to Requirements 370
12.2.2 Product Selection 111
12.2.3 Price and Brand 11A
12.2.4 Value-Added Services 375
12.2.5 Relationships and Experiences 376
12.2.6 Dimensions and Achieving Excellence 379
12.3 Customer Value Measures 38012.4 Information Technology and Customer Value 382Summary 385Discussion Questions 386
13. SMART PRICING 387
CASE: STARBUCKS ECONOMICS: SOLVING THE MYSTERY OF THE ELUSIVE
"SHORT" CAPPUCCINO 387
13.1 Introduction 38813.2 Price And Demand 38913.3 Markdowns 39013.4 Price Differentiation 39113.5 Revenue Management 39313.6 Smart Pricing 396
13.6.1 Differential Pricing 39613.6.2 Dynamic Pricing 398
13.7 Impact of the4 Internet 39913.8 Caveats 400Summary 401Discussion Questions 401CASE: THE GREAT REBATE RUNAROUND 402
CONTENTS XXVii
14. INFORMATION TECHNOLOGY AND BUSINESS PROCESSES 405
CASE: SUPPLY CHAIN WHIRL 405
14.1 Introduction 407
14.2 The Importance of Business Processes 408
14.3 Goals of Supply Chain IT 414
CASE: 7-ELEVEN STOCKS UP ON TECH SAVVY 418
14.4 Supply Chain Management System Components All14.4.1 Decision-Support Systems All14.4.2 IT for Supply Chain Excellence 425
14.5 Sales And Operations Planning 428
CASE: S&OP "EVOLUTION" AT ADTRAN 428
14.6 Integrating Supply Chain Information Technology 43014.6.1 Implementation of ERP and DSS 43114.6.2 "Best of Breed" versus Single-Vendor ERP Solutions 432
Summary 433
Discussion Questions 434
15. TECHNOLOGY STANDARDS 435
CASE: PACORINI STAYS ON TOP OF GLOBAL LOGISTICS MARKET WITH IBM SOA SOLUTION 435
15.1 Introduction 436
15.2 IT Standards 437
15.3 Information Technology Infrastructure 43915.3.1 Interface Devices 43915.3.2 System Architecture 43915.3.3 Electronic Commerce 441
15.4 Service-Oriented Architecture (SOA) 44415.4.1 Technology Base: IBM and Microsoft 44515.4.2 ERP Vendor Platform: SAP and Oracle 44615.4.3 Conclusion 447
15.5 Radio Frequency Identification (RFID) 44815.5.1 Introduction 44815.5.2 RFID Applications 44915.5.3. RFID and Point-of-Sale Data 45215.5.4 Business Benefits 45315.5.5 Supply Chain Efficiency 455
Summary 455
Discussion Questions 456
APPENDIX A COMPUTERIZED BEER GAME 457
A.1 Introduction 457
A.2 The Traditional Beer Game 457
A.2.1 The Difficulties with the Traditional Beer Game 458
A.3 The Scenarios 459
A.4 Playing A Round 460
XXVJii CONTENTS
A.4.1 Introducing the Game 460
A.4.2 Understanding the Screen 461
A.4.3 Playing the Game 462
A.4.4 Other Features 464
A.5 Options And Settings 465A.5.1 File Commands 465
A.5.2 Options Commands 465
A.5.3 The Play Commands 468
A.5.4 The Graphs Commands 469
A.5.5 The Reports Commands 470
APPENDIX B THE RISK POOL GAME 472
B.I Introduction 472B.2 The Scenarios AllB.3 Playing Several Rounds 473
B.3.1 Introducing the Game 473
B.3.2 Understanding the Screen 474
B.3.3 Playing the Game 475
B.3.4 Other Features 475
B.4 Options And Settings 475B.4.1 File Commands 476
B.4.2 Play Commands 416
B.4.3 The Reports Commands 478
APPENDIX C EXCEL SPREADSHEET 480
C.I Introduction 480C.2 The Spreadsheet 480
APPENDIX D THE BIDDING GAME 481
D.I Introduction 481D.2 The Scenario 481D.3 Instructions For Excel Version Of The Game 482
BIBLIOGRAPHY 483
INDEX 489
