Supply Chain Management Topic 1 General Introduction.pdf

SUPPLY CHAIN MANAGEMENT SUPPLY CHAIN the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service Sometimes referred to as value chains Considered as a network of suppliers, manufacturers, assembl...

SUPPLY CHAIN MANAGEMENT SUPPLY CHAIN the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service Sometimes referred to as value chains Considered as a network of suppliers, manufacturers, assemblers, supply and delivery center, and logistics installations That functions as material sourcing, processing and shipment to buyers of those materials or finished product FACILITIES The sequence of the supply chain begins with basic suppliers and extends all the way to the final customer. Warehouses Factories Processing centers Distribution centers Retail outlets Offices 3 FUNCTIONS AND ACTIVITIES Supply chain functions and activities Forecasting Purchasing Inventory management Information management Quality assurance Scheduling Production and delivery Customer service 4 SUPPLY CHAIN MANAGEMENT SUPPLY CHAIN MANAGEMENT (SCM) The strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management The goal of SCM is to match supply to demand as effectively and efficiently as possible KEY ISSUES Determining appropriate levels Being able to quickly identify of outsourcing problems and respond to them Managing procurement Managing risk Managing suppliers Managing customer relationships 6 TRENDS IN SCM TRENDS AFFECTING SUPPLY CHAIN DESIGN AND MANAGEMENT 1. Measuring supply chain ROI 2. “Greening” the supply chain 3. Re-evaluating outsourcing 4. Integrating IT 5. Managing risks 6. Adopting lean principles 7 PROCUREMENT The purchasing department is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service. The goal of procurement is to develop and implement purchasing plans for products and services that support operations strategies 8 SUPPLIER MANAGEMENT Choosing suppliers Supplier audits Supplier certification Supplier relationship management Supplier partnerships ✓ CPFR (collaborative planning, forecasting, and replenishment) ✓ Strategic partnering 9 LOGISTICS Refers to the movement of materials, services, cash, and information in a supply chain Movements within a facility Incoming shipments Outgoing shipments 10 CREATING AN EFFECTIVE SUPPLY CHAIN It begins with strategic sourcing Analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance There must be Trust Effective communication Information velocity Supply chain visibility Event management capability Performance metrics 11 OPERATIONS STRATEGY Effective supply chains are necessary for organizational success Requires integration of all aspects of the chain Supplier relationships are a critical component of supply chain strategy Lean operations and six sigma are being employed to improve supply chain success 12