Global SCM - Updated

8/6/2019 Global SCM - Updated

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Sreeja Nair -60

Kavita Sharma 59

Victoria Swamy 58

Ravi Sekhar 57

T Saritha - 56


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A Brief Overviewy Definition

y Usefulness and practicality in todays world

yAdvantages, disadvantages, and solutionsy Considerations


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Introduction to Global Supply Chain Management

yAn integrated process where several businessentities such as suppliers, manufacturer,

distributers and retailers work together to plan,coordinate and control parts, material andfinished goods from suppliers to consumers.

y The facilities, functions, and activities involved in

producing and delivering a product or service,from suppliers to customers.


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What is Global Supply Chain Management?

y Built upon ight k y businessprocesses that are both cross-

functional andcross-firm innature

y Each process is managed by a cross-functional team, including

representatives from logistics, production, purchasing, finance,marketing and research anddevelopment


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Business Processes Of Supply Chain

y SCperforms businessprocesses as follows:

y TheCustomer Relationship Management Process

y TheSupplier Relationship Management Process

y TheCustomer Service Management Process

y The Demand Management Process

y The rder Fulfillment Process

y The Manufacturing Flow Management Process

y The Product Development andCommercialization Process

y The Returns Management Process


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Software Packages

i2 Six: A comprehensive solution suite for spend/production/ revenue/ logistics/ fulfillment optimization

Solution suites for network design & optimization/manufacturing planning & scheduling/ global logistics

management/ service & parts management

JD EDWARD: The advanced planning softwareto synchronize demand & planning/ networkOptimization/ production & distribution planning


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Software Packages

ARIBA Spend Management: It helpscompanies driving down enterprise wide spend

mySAPSCM: A complete supply chainplanning solution

iBann: A complete solution suite from demandcollaboration to order management


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Practicality and Usefulnessy Help companies compete all over the world

y Expand business operations

y

Offer new services and applications to meet globalcustomers needs

y Give company a competitive advantage


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Goal of theGlobal Supply ChainyPrompt and reliable delivery of high-quality

products and services at the least cost

yTo effectively meet rising customerexpectations


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Advantagesy Diversified business and trading

y Lower supply chain costs

y Reduced cycle timey Competitive advantage

y Untapped markets

y Enhance speed and efficiency


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DisadvantagesyMember nations VS. Non member

nations

yInefficient and undersizedtransportation and distribution

systemsyMarket instability


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Soluti

ons

yDuty specialists and trade specialists

y

Vertically integratingyBanding together

yInfrastructure improvements

yFlexibility


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Brainsto

r ing Exercise

yWhat are some reasons forextending your business andsupply chain globally?


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Brainsto

r ing Exercise Increase sales

Satisfy shareholders

Falling tariffs

Increase in International Trade

Increase in internet use throughoutthe world.


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Considerationswhendesigning a global supply

chain

y Strategic plan or Objective

goals

y Uncertaintyy Communication and information flow

y Types and numbers of facilities and location


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Exercisey Make a list of pros and cons for developing a global

supply chain.

yWhat are the different costs your company willencounter?

y Do the benefits or global business outweigh the costs?


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GSCM at Digital Equipment Corp.

HISTORY

1957: Founded by Ken Olsen

1961: Started Construction of first computer PDP-1

1978: Took Over the majority of minicomputer market

1980: Second Largest Computer company in the world

1990: DEC suddenly found its sales faltering

1998: DEC was sold to Compaq

2002: Compaq was taken over by HP

2003: Digital Global Soft is a well respected IT service

company in India. Earlier it was 51% subsidiary of DEC


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DEC in Late 80s and Early 90s:

1987:

DEC successfully supported a full range of products for over 20years with 33 plants in 13 countries including 30 distribution and

repair centers1989-1990:

A mismatch among capacity, infrastructure, and demands of newmarkets

1988- 1993:

Digital reengineered the business processes throughout

manufacturing and logistics.

Corporate Logistics and Manufacturing initiated the development ofGSCM for simultaneously balancing the conflicting attributes ofmanufacturing and logistics


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Number, location and capacity of plants

What product to build at which plant

Significance & location of tax heavens

Number, location and capacity of DCs

Which DC should serve which customer

Number and location of repair centers

Optimal design of spare parts

Manufacturing

Logistics

Spare Parts

Decision Variables for

GSCM


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Which supplier to keep

Which product to buy in a nation

Which supplier should supply each plant

Location a ailability of cheap labor

Length of material pipeline in time

E port regulations, duty rates

Supplier Selection

Miscellaneous


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GSCM minimizes a weighted sum of total cost and acti ity days

1. Production Costs

2. Inventory Costs

3. Material Handling Costs

4. Taxe

s

5. Facility/ Production Line Fixed Costs

6. Transportation Costs

7. Duty Costs

Objecti e Function forGSCM

ot l co t inclu e


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Customer demand is met for each product, in each period, ineach customer region

Limits on number of facilities making each product

Limit on number of facilities using each manufacturing style

Fi ed charges for products made by each facility

Fi ed charges for facilities making any product

Fi ed charges for manufacturing style used by each facility

Limited production capacity, in entory storage, and shippingolume

Constraints forGSCM


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Solution Approach

Users are in ited to ad ise and assist the sol er by specifyingwith each constraint just how much it would cost to iolate theconstraint

Elastic penalties help sol er decide which constraints are hardand which are soft

The sol er uses branch and bound enumeration

The problem of realistic size and detail, the GSCM featuresconstitute a formidable class of large, difficult optimizationproblem


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A reduction of $167 million in annual manufacturing cost

A reduction of $200 million in annual logistics cost

Number of plants was to be reduced from 33 to 12

Fi e times more computers were manufactured

Impact ofGSCM on DEC (1990-1994)

Arntzen, Brown, Harrison, and Trafton Global Supply Chain Management atDigital Equipment Corporation, Interfaces,1995, pp. 69-93


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Conclusions

Supply Chain Planning: A critical factor in thesuccess and profitability of a company

Short Product Life Cycle: Improper planning can

take the company out of business

Bad News: Planning is an hard problem to formulateas well as solve

Good News: Plethora of Commercially availablesoftware for supply chain planning


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Thank you all for listening

Global SCM - Updated

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