2. Chapter Ten Process Analysis and Improvement Application: Supply Chain Management McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

3. Chapter Ten Learning Objectives Learn how to view a product supply chain from process perspective Develop a consumer product supply chain flow model using Visio Develop and test various what-if business decision scenarios using Beer Game simulation models

4. Chapter Ten Worksheet Menu

5. Chapter Ten Files

6. Chapter Ten Outline Learn how to view a product supply chain from process perspective Develop a consumer product supply chain flow model using Visio Develop and test various what-if business decision scenarios using Beer Game simulation models

7. Supply Chain Perspective Exhibit 10-1 p. 280 Page: Primis Custom Publishing

8. Integrated Supply Chain Management A Historical Perspective on Supply Chain Supply Chain Management Philosophy Strategies for Solving Supply Chain Problems

9. Integrated Supply Chain Management An arrangement of suppliers of products and services A network for efficient management of demand and flow of products and services A philosophy of conducting business A strategy to gain competitive advantage through coordination and synchronization of actions of its members

10. Supply Chain Historical Perspective 1960 to 1975 corporations had vertical organization structures and optimization of activities was focused on functions Relationships with vendors were win-lose interactions and were many times adversarial Manufacturing systems were focused on Materials Requirements Planning (MRP) 1975 to 1990 corporations were still vertically aligned, but several were involved in process mapping and analysis to evaluate their operations There was realization by organizations of the benefit of integration of functions such as, product design and manufacturing. Manufacturing systems were focused on MRP II. 1990 Onwards corporations all over the world have been experiencing increasing national and international competition Strategic alliances among organizations have been growing Organization structures are starting to align with processes Manufacturing systems in organizations have been enhanced with information technology tools such as, Enterprise Resource Planning Distribution Requirements Planning Electronic Commerce Product Data Management Collaborative Engineering

11. Supply Chain - Channel Integration Organizational structures and associated relationships Supply chain coordination Inter and intra enterprise communication Sourcing Manufacturing orientation Inventory and cost management

12. Supply Chain Management Issues Flexible Organizations Organizational Relationships Total supply chain coordination Improved Communications Outsourcing non-core competencies Build to Order Manufacturing Strategy Inventory Management Cost Control

13. Solving Supply Chain Problems The Acceleration Principle Lead Time/Safety Stock Inventory Reduction Syndromes Implementing Effective Supply Chain Management Strategies A Framework for Analysis

14. Acceleration Principle: Lead Time/Safety Stock Exhibit 10-2 p. 285 Page: Lead Time Syndrome

15. Acceleration Principle: Inventory Reduction Syndromes Exhibit 10-3 p. 286 Page: Inventory Reduction Syndrome

16. Implementing Effective Supply Chain Management Strategies Manage inventory investment in the chain Establish supplier relationships Increase customer responsiveness Build a competitive advantage for the channel Introduce supply chain management solutions and enabling information technology

17. A Framework for Analysis Exhibit 10-4 p. 288 Page: Supply Chain Network

18. A Framework for Analysis Building blocks Production Operations Management Systems (POMS) Integrated Production Planning and Control (IPPC)

19. A Framework for Analysis Exhibit 10-5 p. 289 Page: Manufacturing Supply Chain

20. Supply Chain Framework Elements Goals Objectives Increase throughput Reduce cycle time Reduce stage inventory Modeling Principles Developing Coordinated strategies Implementation

21. Reducing the influence of lead-time variability in the productive process inventory variability at different supply chain stages and locations batching effects variability in the productive process variability due to supply chain bottleneck operations

22. Productive Process Lead-time Variability Set-up time can be alleviated by ensuring constant demand in the system Process time variations can be reduced / and or eliminated by standardizing methods and procedures Queue time can be eliminated by coordinating schedules between servers so that elapsed time for service can be minimized and server efficiency improved, and Idle time can be eliminated or alleviated by scheduling maintenance of productive resources

23. Supply Chain Inventory Variability Exhibit 10-6 p. 292 Sheet: Textile Sector

24. Batching Effects Variability Batching Effect Saturation Effect

25. Developing Coordinated Strategies Maintaining effective inventories while realizing production efficiencies Achieving integration through synchronization and coordination of various system components Potential of increase in supply chain payoffs

26. Developing Coordinated Strategies Exhibit 10-7 p. 293 Page: Marketing Strategies

27. Developing Coordinated Strategies Exhibit 10-8 p. 293 Page: Production Strategies

28. Developing Coordinated Strategies Exhibit 10-9 p. 294 Page: Coordinating Strategies

29. Implementation Exhibit 10-10 p. 295 Page: Food Production Process

30. Implementation Exhibit 10-11 p. 295 Page: Steel Production Process

31. Supply Chain Simulation: Beer Game Beer Game Description Beer Game Arena Simulation Model Two Unit Beer Game Model

32. Beer Game Description Exhibit 10-12 p. 297 Page: Beer Game Process Model

33. Beer Game Description Exhibit 10-13 p. 297 Page: Beer Game Flow Model

34. Beer Game Description Exhibit 10-14 p. 298 Page: Beer Game Node Model

35. Beer Game Simulation Model Input Variables Network Logic Flow Display Crystal Reports Output Files Optimization Analysis

36. Input Variables Exhibit 10-15 p. 299 Sheet: Variables Beer Game.xls

37. Beer Game.doe Exhibit 10-16 p. 300 Network Logic Flow

38. Beer Game.doe Exhibit 10-18 p. 301 Route Order Module Exhibit 10-17 p. 301 Generate Demand Costs Assign Module

39. Beer Game.doe Exhibit 10-19 p. 301 Order Inventory Update Assign Module Exhibit 10-20 p. 302 Retail Sale Assign Module

40. Beer Game.doe Exhibit 10-22 p. 302 Reorder Assign Module Exhibit 10-21 p. 302 Retailer Lost Sale Assign Module

41. Beer Game.doe Exhibit 10-24 p. 303 Update Inventory Assign Module Exhibit 10-23 p. 303 Factory Order Assign Module

42. Beer Game.doe Exhibit 10-25 p. 303 Fill BackOrders Assign Module Exhibit 10-26 p. 303 Ship Order Assign Module Exhibit 10-27 p. 304 Route Kegs Spreadsheet

43. Beer Game.doe Exhibit 10-28 p. 304 Plot Displays

44. Beer Game.doe Crystal Reports Exhibit 10-29 p. 305 Time Persistent Statistics

45. Beer Game.doe Crystal Reports Exhibit 10-30 p. 305 Output Statistics

46. Beer Game.doe Output Files Exhibit 10-31 p. 306 Sheet Beer Game Output Files

47. Beer Game.doe Output Files Exhibit 10-32 p. 306 Beer Game Output Files InventoryRetailer.dat KegsOnOrderRetailer.dat

48. Optimization Analysis (PAN) Exhibit 10-33 p. 307 Beer Game PAN.doe Process ANalyzer (PAN) Display

49. Optimization Analysis (PAN) Exhibit 10-34 p. 307 Sheet PAN 1 Exhibit 10-38 p. 309 Sheet PAN 5

50. Two Unit Beer Game Model Exhibit 10-39 p. 309 Page Two Unit Beer Game

51. Two Unit Beer Game Model Exhibit 10-40 p. 310 Sheet Variables Two Units.xls

52. Two Unit Beer Game Model Exhibit 10-41 p. 310 Two Units.doe Display

53. Two Unit Beer Game Model Exhibit 10-42 p. 311 Two Units.doe Output Statistics

54. Summary Supply Chain Management Process Improvement, a Supply Chain Perspective Integrated Supply Chain Management Supply Chain Simulation: Beer Game Next: Student Projects