Chapter 13 Supply Chain Management 2014

Lamb, Hair, McDaniel

Chapter 13

Supply Chain Management

2013-2014

Define the terms supply chain and supply chain management, and discuss the benefits of supply chain management Discuss the concepts of internal and external supply chain integration and explain why each of these types of integration is important Identify the eight key processes of excellent supply chain management and discuss how each of these processes affects the end customer

© 2013 by Cengage Learning Inc. All Rights Reserved. 2

1

2

3

Understand which key functional areas of a business impact supply chain success, and how

Discuss new technology and emerging

trends in supply chain management


4

5

Define the terms supply chain and supply chain management,

and discuss the benefits of supply chain management

Supply Chains and



1


Supply Chain

The connected chain of all of the

business entities, both internal and

external to the company, that perform

or support the logistics function

1



A management system that coordinates and integrates all of the activities

performed by supply chain members into a seamless process, from the source to

the point of consumption, resulting in enhanced customer and economic value

1


Benefits of Supply Chain Management

Supply chain oriented companies

commonly report:

• Lower inventory, transportation,

warehousing, and packaging costs

• Greater supply chain flexibility

• Improved customer service

• Higher revenues

• Increased performance and profitability

1

Discuss the concepts of internal and external supply chain

integration and explain why each of these types of

integration is important

Supply Chain Integration


2


• A systems approach where the overall performance of the chain is greater than the sum of its parts

• Occurs when multiple functional areas coordinate business processes to seamlessly link to one another.


2

Internal Integration

• Occurs with a management orientation toward demand-supply integration

– DSI is a philosophy that integrates the supply management and the demand generating functions in an organization.


2


External Supply Chain Integration

Material and Service Supplier Integration

Customer Integration

Relationship Integration

Measurement Integration

Technology and Planning Integration

Firm-to-Firm Social Interactions

Operational Planning and

Control

Customer Integration

2



Relationship

Integration

The ability of two or more

companies to develop social

connections that serve to

guide their interactions when

working together.

The performance assessment

of the supply chain as a whole

that also holds each individual

firm or business unit

accountable for meeting its own

goals

Measureme

nt

Integration

2



Technology

and

planning

integration

The creation and maintenance

of information technology

systems that connect

managers across and through

the firms in the supply chain

Material

and service

supplier

integration

Requires firms to link

seamlessly to those outsiders

that provide goods and

services to them so that they

can streamline processes and

provide quality customer

experiences.

2

A competency that enables firms to

offer long-lasting, distinctive, value-

added offerings to those customers

who represent the greatest value to

the firm or supply chain

Customer

Integration



2

Identify the eight key processes of excellent supply chain management and discuss

how each of these processes impacts the end customer

Key Processes of Supply Chain Management


3


Key Business Processes

1. Customer relationship

management

2. Customer service management

3. Demand management

4. Order fulfillment

5. Manufacturing flow management

6. Supplier relationship

management

7. Product development and

commercialization

8. Returns management

3


Customer Relationship Management

CRM allows companies to prioritize their

marketing focus on different customer

groups according to each group’s long-

term value to the company or supply

chain

3


Customer Service Management

The customer service management

process presents a multi-company, unified

response system to the customer

whenever complaints, concerns,

questions, or comments are voiced

3


Demand Management

The demand management process seeks to

align supply and demand throughout the

supply chain by anticipating customer

requirements at each level and create demand-

related plans of action prior to actual customer

purchasing behavior

3


Order Fulfillment

The order fulfillment process is a highly

integrated process, often requiring persons

from multiple companies and multiple

functions to come together and coordinate

to create customer satisfaction at a given

place and time

3


Manufacturing Flow Management

The manufacturing flow management

process is concerned with ensuring that

firms in the supply chain have the needed

resources to manufacture with flexibility and

to move products through a multi-stage

production process

3


Supplier Relationship Management

The supplier relationship management

process supports manufacturing flow by

identifying and maintaining relationships

with highly valued suppliers

3


Product Development and Commercialization

The product development and

commercialization processes include the

group activities that facilitates the joint

development and marketing of new

offerings among a group of supply chain

partner firms

3


Returns Management

The returns management process enables

firms to manage volumes of returned

product efficiently, while minimizing returns-

related costs and maximizing the value of

the returned assets to the firms in the

supply chain

3

Understand which key functional areas of a

business impact supply chain success, and how

How Business Logistics Functions Impact

the Supply Chain


4

the process of strategically managing

the efficient flow and storage of raw

materials, in-process inventory, and

finished goods from point of origin to

point of consumption.

Logistics


4


Logistical Components of the Supply Chain

Supply Chain Team

Sourcing & Procurement

Production Scheduling

Order Processing

Inventory Control

Warehouse & Materials Handling

Transportation

Logis

tics Info

rmation S

yste

m

4


Sourcing and Procurement

Plan purchasing strategies

Develop specifications

Select suppliers

Negotiate price and service levels

Reduce costs

The Role of Purchasing:

4

Inventory Control

A method of developing and

maintaining an adequate assortment

of materials or products to meet a

manufacturer’s or a customer’s

demand


4

Inventory Control

Tools for managing inventory include:

materials requirement planning (MRP) or materials management – supplier to manufacturer

distribution resource planning (DRP) – manufacturer to end user

automatic replenishment programs – minimal forecasting


4

Order Processing

a system whereby orders are

entered into the supply chain and

filled.

Order processing is becoming

more automated through the use

of computer technology known as

ELECTRONIC DATA

INTERCHANGE (EDI)


4


Production Scheduling

Push / Pull Strategy

Traditional Focus

Push

Start of Production

Manufacturing

Inventory- Based

Mass Production

Customer Focus

Pull

Customer-Order Based

Mass Customization

4


Postponement

A hybrid strategy that takes

advantages from Build-to-Stock and

Build-to-order strategies.

• Product based on generic forecasts

• Shipped to locations near major

customers

• Customer places order and

manufacturing is completed to

customer’s specifications.

4


Warehousing and Materials Handling

Most manufacturers today have moved

to AUTOMATED materials-handling

systems to minimize the amount of

handling.

Materials-Handling System

a method of moving

inventory into, within, and

out of the warehouse.

4


Transportation

Airways

Water

Pipelines

Motor Carriers

Railroads

4


Transportation Mode Choice

Cost

Transit time

Reliability

Capability

Accessibility

Traceability

4

Exhibit 13.1 Criteria for Ranking Modes of

Transportation


Relative Cost

Air Truck Rail Pipe Water

Transit Time Water Rail Pipe Truck Air

Reliability Pipe Truck Rail Air Water

Capability Water Rail Truck Air Pipe

Accessibility Truck Rail Air Water Pipe

Traceability Air Truck Rail Water Pipe

Highest Lowest

Supply Chain Technology

Logistics Information System

– The link connecting all the logistics functions of the supply chain.

Smart RFID

– Inventory handling and tracking system that submits product information

– Uses radio-frequency electromagnetic fields in an electronic tag

4

Discuss new technology and emerging trends in

supply chain management

Trends in Supply Chain Management


5


Trends in Supply Chain Management

Electronic distribution

Supply Chain Risk, Security, and Resilience

Sustainable Supply Chain management

Outsourcing Logistics Functions

5


Outsourcing Logistics Functions

Reduce inventories

Locate stock at fewer plants and distribution centers

Provide same or better levels of service

Outsourcing Benefits

5

Electronic Distribution

a distribution technique that includes any kind

of product or service that can be distributed

electronically, whether over traditional forms

such as fiber-optic cable or through satellite

transmission of electronic signals.

Three-dimensional printing is the newest

method for distributing products. Special

printers create products based on a digital file

using liquefied raw materials shipped to the

printer’s location.


5


Sustainable Supply Chain Management

• Requires integrating environmentally conscious thinking into all phases of the supply chain

– Green materials sourcing

– Environmental impact of packaging, shipment, use

– Incorporate end-of-life management

• Recycling

• Clean disposal

5

Global Logistics and Supply

Chain Management

Logistical challenges of global markets:

• Understanding and coping with the legalities of trade in other countries

• Uncertainty regarding shipping


5

Chapter 13 Video

Geoffrey B. Small

Geoffrey B. Small, a super-luxury fashion designer, discusses how he sources the materials needed to

develop his clothing lines. He also discusses how he makes distribution decisions based on his micro

production process and global distribution channels.

CLICK TO PLAY VIDEO


http://www.cengage.com/marketing/book_content/lamb_9781285091860/videos/ch13.html

Chapter 13 Supply Chain Management 2014

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Transcript of Chapter 13 Supply Chain Management 2014