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Introduction
Outline
What is a Supply Chain? Decision Phases in a Supply Chain Process View of a Supply Chain The Importance of Supply Chain Flows Examples of Supply Chains
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INTRO KONSEP
AGREGAT PLANNING
PRODUCTION PLANNING
MATERIAL HANDLING
INVENTORY MGMT
CUSTOMER SERVICE
SUPPLY NETWORK
Plastic Producer
Tenneco Packaging
Paper Manufacturer
Timber Industry
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Supply Chain
A network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers.
Definition
A supply chain is a set of three or more organizations linked directly by one or more of the upstream or downstream flows of products, services, finances, and information from a source to a customer.
Key Concepts
Shift from vertical (functional) to horizontal (crossfunctional) organization focus on interrelated set of processes rather than series of discrete, nonaligned activities Supply chain activities and flows extend across organizational boundaries Supply chain is subset of value chain the primary activities or operational part
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SUPPORT
INSPECTION OF MATERIAL :
LENGTH, WEIGHT ETC
FIELD INSPECTION
DYE FORMULAS TESTING NATURAL SYNTHETIC FINISH BATH FORMULA ORDER ATIVITIES CORP REQTS VENDOR RELATIONS RECEIVING & INTL SHIPPING
BUYER PROCESS DESIGN PATTERNS, TECHNOLOGIES DETERMINE SPECS MATL RESEARCH MARKETING
PROCURE MENT
OPEN PICK CARD; SPIN WEAVE : SETUP, RUN, FIX, STORE FINISH : CUT, WRAP
WAREHOUSING
SHIPPING BILLING
DELIVERY MONITORING
TECH SUPPORT FIELD MONITORING CUTOMER REL
PRIMARY ACTIVITIES
CLASSIFY STORE
OPERATIONS
OUTBOUND
SERVICE
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Marketing Cost
Marketing Cost
Manufacturing Cost
27%
48%
Manufacturing Cost
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Customer
Funds
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Supply chain design must support strategic objectives Supply chain design decisions are long-term and expensive to reverse must take into account market uncertainty
2007 Pearson Education 1-19
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Must consider in planning decisions demand uncertainty, exchange rates, competition over the time horizon
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SCM entails aligning, coordinating and synchronizing a wide range of activities: purchasing/material releasing; inbound and outbound transportation; receiving; materials handling; warehousing and distribution; inventory control and manage-ment; demand and supply planning; order processing; production planning and scheduling; shipping; order fulfillment; processing; customer service
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Laura Ashley turns its inventory 10 times a year, five times faster than 3 years ago
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STAGES
CYCLES
CYCLE VIEW
PROCUREMENT
CYCLE SUPPLIER
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Key goal of customer arrival : to facilitate the contact so that customer arrival turns into customer order
customer
Customer arrival
Key goal of customer arrival : to facilitate the contact so that customer arrival turns into customer order Objective of cust order entry : ensure quick and accurate process of orders and communicate them to all affected processes Objective of cust order fulfillment : get the correct and complete orders and by promised due date and the lowest possible costs Objective of cust order receiving : get the correct orders to the correct customer and invoice correctly
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Replenishment cycle
occurs at the retailer distributor interface and includes all processes directly involved in replenishing retailer inventory. Interaction starts when a retailer places an order to replenish inventories to meet future demand and ends when the retailer receives the order.
Retailer
Objective of retail order trigger : to maximize profitability by balancing product availability and costs. Objective of retail order entry : ensure quick and accurate process of orders and convey them quickly to all affected processes Objective of retail order fulfillment : get the correct and complete orders on time while minimizing costs Objective of retailer order receiving : to update inventories and displays quickly and accurately at the lowest costs
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Manufacturing cycle
occurs at the distributor/manufacturer interface and includes all processes involved in replenishing distributor (or retailer) inventory. The manufacturing cycle is triggered by customer orders; replenishment orders from a retailer or distributor; or by the forecast of customer demand and current product availability in the manufacturers finished product warehouse.
distributor
Order arrival
Receiving
Key goal of order arrival : to facilitate the contact so that customer arrival turns into customer order Objective of production scheduling : ensure quick and accurate process of orders and communicate them to all affected processes Objective of manufacturing and shipping : get the correct and complete orders and by promised due date and the lowest possible costs Objective of receiving : get the correct orders to the correct customer and invoice correctly
Syarif Hidayat 2007
2007 Pearson Education 34
Procurement cycle
occurs at the manufacturer supplier interface and includes all processes to ensure that materials are available for manufacturing to occur according to schedule.
manufacturer
Receiving at manufacturer
PUSH-PULL VIEW Pull Processes : execution is initiated in response to a customer order Push Processes : execution is initiated in anticipation of customer order Retailer or distributor orders are triggered by uncertain customer demands Component orders can be determined precisely when the production schedule has been decided
Syarif Hidayat 2007
2007 Pearson Education 36
PUSH PROCESSES
PULL PROCESSES
DISTRIBUTOR
PUSH PROCESSES
Replenish, mfg, procure PROCUREMENT CYCLE
MANUFACTURER
Make to order
PULL PROCESSES
Customer order cycle CUSTOMER ORDER and MANUFACTURING CYCLE CUSTOMER ORDER ARRIVES CUSTOMER
PUSH PROCESSES
Procurement cycle
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The relative proportion of push and pull processes can have an impact on supply chain performance
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Integration among the above three macro processes is critical for effective and successful supply chain management
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7-Eleven
What factors influence decisions of opening and closing stores? Location of stores? Why has 7-Eleven chosen off-site preparation of fresh food? Why does 7-Eleven discourage direct store delivery from vendors? Where are distribution centers located and how many stores does each center serve? How are stores assigned to distribution centers? Why does 7-Eleven combine fresh food shipments by temperature? What point of sale data does 7-Eleven gather and what information is made available to store managers? How should information systems be structured?
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Toyota
Where should plants be located, what degree of flexibility should each have, and what capacity should each have? Should plants be able to produce for all markets? How should markets be allocated to plants? What kind of flexibility should be built into the distribution system? How should this flexible investment be valued? What actions may be taken during product design to facilitate this flexibility?
2007 Pearson Education 1-48