Supply Chain Management

Definition of Supply Chain

All the activities associated with the flow

of goods and information from the raw

materials stage to the end users.

Materials and information flow both up

and down the supply chain.

A Supply Chain for A Product

Suppliers – Manufacturers - Distributors - Retailers

- Consumer

Who Are Members of An Education Supply Chain?

Members of An Education Supply Chain

End Users: Employers and Society Supply Chain Members:

• Colleges and Universities

• High Schools

• Middle Schools

• Elementary Schools and Pre-Schools

• Families

Development of SCM

Pressure to increase productivity, reduce costs, and improve customer service

Increased use of outsourcing Globalization Increased transportation costs Advancement in information technology Emergence of new forms of inter-

organizational relationships

Key Elements of SCM

Strategic Issues

Tactical Issues

Operating Issues

Strategic Issues

Design of Supply Chain

• Selection of supply chain members, locations, outsourcing decisions, etc

Strategic Alliance

• Alliance conceptualization

• Alliance pursuance

• Alliance confirmation

• Alliance implementation

Tactical Issues

Strategies and policies on inventories,

purchasing, transportation, quality, etc.

Design of supply chain information

systems

• Inter-organizational information systems

• Intra-organizational information system

What Are the Inter-Organizational Information Systems?

What Are the Inter-Organizational Information Systems?

Internet

Extranet

Electronic Data Interchange (EDI)

Satellite systems

SCM software systems

What Are the Intra-Organizational Information Systems?

What Are the Intra-Organizational Information Systems?

Intranet

Bar coding and scanners

RFID

Cable and wireless systems

ERP systems

Database and data warehouse systems

Operating Issues

External supply chain process mapping and improvement

• Business Process Reengineering

• Benchmarking Integrated logistics

• Third-party logistics

• Disintermediation

• Reverse logistics

External Process Improvement(Michael Hammer, HBR, Sept. 2001)

Scoping

• Identify the appropriate business process to redesign

• Select a partner Organizing

• Establish an executive steering committee

• Convene a design team

External Process Improvement(Michael Hammer, HBR, Sept. 2001)

Redesigning

• Design the new, integrated process in

a way that fulfills performance goals

Implementing

• Roll out the new process

• Communicate

Optimization of A Supply Chain

Inventory levels

Lot size

Lead time

Product variety

Customer service

Information

Performance Measures for SCM – SCOR (www.supply-chain.org)

Reliability

• On-time delivery, order fulfillment lead

time, fill rate, perfect order fulfillment

Flexibility

• Supply chain response time, upside

production flexibility

Performance Measures for SCM – SCOR (www.supply-chain.org)

Expenses

• Supply chain management cost, warranty cost as a percentage of revenue, value added per employee

Asset Utilization

• Total inventory days of supply, cash-to-cash cycle time, net asset turns

Trip-A Supply Chain(Hau Lee, HBR, Oct. 2004)

Agility – respond to short-term changes in demand or supply quickly; handle external disruptions smoothly

• Promote flow of information; dependable logistics system; design for postponement

Alignment – create incentives for better performance

• Equitably share risks, cost, and gain of improvement initiatives

Trip-A Supply Chain(Hau Lee, HBR, Oct. 2004)

Adaptability – adjust supply chain’s design

to meet structural shifts in markets; modify

supply network to strategies, products,

and technologies

• Spot new supply bases and markets;

create flexible product designs; develop

fresh supplies and logistics infrastructure

Strategies for Improving Supply Chain Performance

Determine the cost drivers and supply chain performance

Focus on the needs of the end users Understand trade partners’ priorities Develop a clear and focused strategy Assemble a high-performance project team Commit to long-term improvement

Software Systems for SCM

Collaborative Planning, Forecasting, and Replenishment (CPFR) - information sharing among supply chain partners

• Front-end agreement

• Joint business plan

• Sales forecast collaboration

• Order forecast collaboration

• Order generation/delivery execution

What Are the Key Requirements for A Successful Supply Chain?

Requirements for A Successful Supply Chain

Share goals and interests

Trust

Information sharing

Long-term commitment

Strong individual members