Drivers of Supply Chain (1).pptx

Drivers of Supply Chain Performance Presented by: Chef Reinald Andaya, DBMHM To understand how a company can improve supply chain performance in terms of responsiveness and efficiency, we must examine the logistical and cross functional drivers of supply chain performance: facilities, inventory, tra...

Drivers of Supply Chain Performance Presented by: Chef Reinald Andaya, DBMHM To understand how a company can improve supply chain performance in terms of responsiveness and efficiency, we must examine the logistical and cross functional drivers of supply chain performance: facilities, inventory, transportation, information, sourcing, and pricing. These drivers interact with each other to determine the supply chain's performance in terms of responsiveness and efficiency. As a result, the structure of these drivers determines if and how strategic fit is achieved across the supply chain. Definition of terms Facilities The actual physical locations in the supply chain network where products is stored, assembled, or fabricated. The two major types of facilities are production sites and storage sites. Decisions regarding the role, location, capacity and flexibility of facilities have a significant impact on the supply chain's performance Inventory Encompasses all raw materials, work in process, and finished goods within a supply chain. Changing inventory policies can dramatically alter the supply chain's efficiency and responsiveness. Transportation Entails moving inventory from point to point in the supply chain. Transportation can take the form of many combinations of modes and routes, each with its own performance characteristics. Transportation choices have a large impact on supply chain responsiveness and efficiency Information Consists of data and analysis concerning facilities, inventory, transportation, costs, prices, and customers throughout the supply chain. Information is potentially the biggest driver of performance in the supply chain because it directly affects each of the other drivers. Information presents management with the opportunity to make supply chains Sourcing The choice of who will perform a particular supply chain activity such as production, storage, transportation, or the management of information. At the strategic level, these decisions determine what functions a firm performs and what functions the firm outsources. Sourcing decisions affect both the responsiveness and efficiency of a supply chain. Pricing Determines how much a firm will charge for goods and services that it makes available in the supply chain. Pricing affects the behavior of the buyer of the good or service, thus affecting supply chain performance