Supply Chain Management

Key Issues

SCM

Competitiveness
Customer Service
Integration

Coordination

Choice of partners

Use of Information
and Communication
technology

Network Organization
and Inter-organizational
Collaboration

Process Orientation

Leadership

Advanced Planning
Foundations

Logistics, marketing, operations research, organizational theory,

Purchasing and supply.

Competitiveness
Reducing costs
Increasing flexibility with respect to
changes in customer demands
Providing superior quality and services

Customer Service
Pre-transactional elements
Customer access to information regarding the products and services a firm
offers
Impersonal purchases like screws not demand personal contacts
Intense personal links between organizations involved for large projects
Flexibility to meet individual customer requirements important for winning
orders

Transactional elements

Order fulfillment in the eyes of a customer

Availability of products from stock
Order cycle times in case of made-to-order
Status of orders
Additional services like use and maintenance of products

Post-transactional elements
Service provide once the order is fulfilled
Repairing or exchanging of defective parts and maintenance

Integration
Choice of Partners
Starts with analyzing the activities associated with generating
a product or service
First assign activities to existing partners (core
competencies!!)
Standard products and services can be bought from
outside SC
For remaining activities look for a partner to join the SC
based on Make or buy decision
Costs; commitment; Technical know-how; taxes and
exchange rates in case of global partners

Integration

Network organization and Inter-organizational collaboration

Network organization loosely coupled, independent actors with equal rights
Organization structure dynamic according to tasks and aims of network as
whole
Each entity concentrate on core competency and relieved from stringent
decision procedures and administrative routines
Information and know-how is shared among members
Competition among members replaced by commitment towards improving
the competitiveness of the network

Integration
Leadership
Required to
Cancellation of a partnership or
The integration of a new partner

Focal company
Member having largest power (financial),
The best know-how of products and processes
Has the greater share of values created during order
fulfillment

Steering committee
Representatives of all members of supply chain

Coordination
Coordination of information, material and financial flows
Utilization of Information and communication technology

Advances in IT information process fast, at different location in SC

Permit advance planning
Easy and cheap storage and retrieval of historical mass data
EDI
B2B
B2C

Process orientation

Coordinates all the activities involved in order fulfillment

Analysis of existing supply chain and allocation of activities to members
Performance indicators weaknesses, bottlenecks and wastes
Comparison with best practices
Activities subject to improvement and reallocation
Similar to business process reengineering

Advanced planning

Decision phases in SCM

Strategic level decisions location , capacity
of ware houses and manufacturing plants,
material flow through the logistics network.
Tactical level decisions purchasing and
production decisions , inventory policies ,
transportation strategy.
Operational level decisions Day to day
decisions like scheduling , routing,lead time ,
quotations, truck loading etc.

Key issues in SCM

Distribution network configuration

Inventory control
Supply contracts
Distribution strategies
Supply chain integration and strategic partnering
Out sourcing and procurement strategies
Product design
Information technology and decision support systems
Customer value