Chapter 10 - Supply chain management: Strategy and design. This chapter includes contents: The management of supply chains, green supply chains, information technology: a supply chain enabler, supply chain integration, supply chain management (SCM) software, measuring supply chain performance.
OPERATIONS MANAGEMENT: Creating Value Along the Supply Chain, Canadian Edition Robert S Russell, Bernard W Taylor III, Ignacio Castillo, Navneet Vidyarthi § CHAPTER 10 Supply Chain Management: Strategy and Design § Learning Objectives Define supply chains with respect to both manufacturing and services Explain characteristics and management strategies of the modern supply chain Discuss sustainable supply chain practices and how they relate to quality management Discuss information technologies currently avail- able for supply chain management Provide an overview of the four areas where information technology assists with supply chain integration Discuss tools for monitoring supply chain performance and calculate key performance indicators 10-2 § Lecture Outline The Management of Supply Chains Green Supply Chains Information Technology: A Supply Chain Enabler Supply Chain Integration Supply Chain Management (SCM) Software Measuring Supply Chain Performance 10-3 § Supply Chains • • All facilities, functions, and activities associated with flow and transformation of goods and services from raw materials to customer, as well as the associated information flows An integrated group of processes to “source,” “make,” and “deliver” products 10-4 § The Supply Chain – Figure10.1 10-5 § Supply Chain for Denim Jeans Figure 10.2a 10-6 § Supply Chain for Denim Jeans (cont.) Figure 10.2b 10-7 § Supply Chain Processes 10-8 § Supply Chain for Service Providers More difficult than manufacturing Does not focus on the flow of physical goods Focuses on human resources and support services More compact and less extended 10-9 § Value Chains Value chain every step from raw materials to the eventual end user ultimate goal is delivery of maximum value to the end user Supply chain activities that get raw materials and subassemblies into manufacturing operation ultimate goal is same as that of value chain 10-10 § Bar Codes Automated data collection system Bar code contains identifying information Provide instantaneous tracking information Checkout scanners create point-of-sale data Update inventory records Identify trends Order material Schedule orders Plan deliveries 10-24 § Radio Frequency Identification (RFID) Use radio waves to transfer data from chip to a reader Provides complete visibility of product location Continuous inventory monitoring Reduce labor to manage inventory Reduce inventory costs RFID is not standardized yet Difficult to track between systems 10-25 § RFID Capabilities 10-26 § RFID Capabilities 10-27 § Supply Chain Integration Share information among supply chain members Reduced bullwhip effect Early problem detection Faster response Builds trust and confidence Collaborative planning, forecasting, replenishment, and design Reduced bullwhip effect Lower costs (material, logistics, operating, etc.) Higher capacity utilization Improved customer service levels 10-28 § Supply Chain Integration Coordinated workflow, production and operations, procurement Production efficiencies Fast response Improved service Quicker to market Adopt new business models and technologies Penetration of new markets Creation of new products Improved efficiency Mass customization 10-29 § Collaborative Planning, Forecasting, and Replenishment (CPFR) Two or more companies in a supply chain to synchronize their demand forecasts into a single plan to meet customer demand Parties electronically exchange past sales trends point-of-sale data on-hand inventory scheduled promotions forecasts 10-30 § SCM Software Enterprise resource planning (ERP) software that integrates the components of a company by sharing and organizing information and data 10-31 § Measuring Supply Chain Performance Metrics used to measure supply chain performance • Inventory turnover Inventory turns Cost of goods sold Average aggregate value of inventory • Total value (at cost) of inventory Average aggregate value of inventory (average inventory for item i ) (unit value item i ) 10-32 § Measuring Supply Chain Performance Days of supply • Days of supply Average aggregate value of inventory (Cost of goods sold)/(365 days) • Fill rate: fraction of orders filled by a distribution center within a specific time period 10-33 § Computing Key Performance Indicators 10-34 § Process Control and SCOR Process Control not only for manufacturing operations can be used in any processes of supply chain Supply Chain Operations Reference (SCOR) a cross industry supply chain diagnostic tool maintained by the Supply Chain Council 10-35 § SCOR Model Processes 10-36 § SCOR Performance Metrics 10-37 Đ COPYRIGHT COPYRIGHT Copyright â 2014 John Wiley & Sons Canada, Ltd All rights reserved Reproduction or translation of this work beyond that permitted by Access Copyright (The Canadian Copyright Licensing Agency) is unlawful Requests for further information should be addressed to the Permissions Department, John Wiley & Sons Canada, Ltd The purchaser may make back-up copies for his or her own use only and not for distribution or resale The author and the publisher assume no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein ... 10. 2a 1 0-6 § Supply Chain for Denim Jeans (cont.) Figure 10. 2b 1 0-7 § Supply Chain Processes 1 0-8 § Supply Chain for Service Providers More difficult than manufacturing Does not focus on the. .. Green Supply Chains Information Technology: A Supply Chain Enabler Supply Chain Integration Supply Chain Management (SCM) Software Measuring Supply Chain Performance 1 0-3 § Supply Chains • •... of value chain 1 0-1 0 § Value Chains Demand chain increase value for any part or all of chain Terms are used interchangeably Value creation of value for customer is important aspect of supply