Chapter 14 Supply chain management

Chapter 14 Supply Chain Management Supply Chains Supply Chain The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function 2 2

Supply Chains Supply Chain Management Chapter 14 Supply Chain Management Supply Chains A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value Supply Chain Management . 3 3

Benefits of Supply Chain Management Chapter 14 Supply Chain Management Benefits of Supply Chain Management Supply chain oriented companies commonly report: Lower inventory, transportation, warehousing, and packaging costs Greater supply chain flexibility Improved customer service Higher revenues Increased profitability 10 4

Supply Chain Integration Chapter 14 Supply Chain Management Supply Chain Integration Relationship Integration Measurement Integration Technology and planning Integration Firm-to-Firm Social Interactions Operational Planning and Control Material and service supplier Integration Internal Operations Integration Customer Integration Customer Integration 5 5

Key Processes of Supply Chain Management Chapter 14 Supply Chain Management Key Processes of Supply Chain Management 6 6

Customer Relationship Management Chapter 14 Supply Chain Management Customer Relationship Management Customer Relationship Management Process The prioritization of a firm’s marketing focus on different customer groups according to each group’s long-term value to the company or supply chain; designed to identify and build relationships with good customers. 7 7

Customer Service Management Chapter 14 Supply Chain Management Customer Service Management Customer Service Management Process A multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced; designed to ensure that customer relationships remain strong. 8 8

Demand Management Demand Management Process Chapter 14 Supply Chain Management Demand Management Demand Management Process The alignment of supply and demand throughout the supply chain to anticipate customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior. Good demand management can increase both sales and customer satisfaction, and at the same time, it can reduce the overall cost of serving the firm or supply chain’s customer base. 9 9

Chapter 14 Supply Chain Management Order Fulfillment Order Fulfillment Process A supply chain management process that involves generating, filling, delivering, and providing on-the-spot service for customer orders. 10 10

Manufacturing Flow Management Chapter 14 Supply Chain Management Manufacturing Flow Management Manufacturing Flow Management Process A process that ensures that firms in the supply chain have the resources they need 11 11

Supplier Relationship Management Chapter 14 Supply Chain Management Supplier Relationship Management Supplier Relationship Management Process A supply chain management process that supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers 12 12

Product Development and Commercialization Chapter 14 Supply Chain Management Product Development and Commercialization Product Development and Commercialization Process The group of activities that facilitates the joint development and marketing of new offerings among a group of supply chain partner firms. 13 13

Returns Management Returns Management Process Chapter 14 Supply Chain Management Returns Management Returns Management Process A process that enables firms to manage volumes of returned product efficiently, while minimizing costs and maximizing the value of the returned assets to the firms in the supply chain. 14 14

Logistical Components of the Supply Chain Chapter 14 Supply Chain Management Logistical Components of the Supply Chain Supply Chain Team Sourcing & Procurement Production Scheduling Order Processing Inventory Control Warehouse & Materials Handling Transportation Logistics Information System

Sourcing and Procurement Chapter 14 Supply Chain Management Sourcing and Procurement The Role of Purchasing: Plan purchasing strategies Develop specifications Select suppliers Negotiate price and service levels Reduce costs

Production Scheduling Chapter 14 Supply Chain Management Production Scheduling Push / Pull Strategy Traditional Focus Push Start of Production Manufacturing Inventory- Based Mass Production Customer Focus Pull Customer-Order Based Mass Customization

Just-in-Time Manufacturing Chapter 14 Supply Chain Management Just-in-Time Manufacturing JIT A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line.

Benefits of JIT Reduces raw material inventories Shortens lead times Chapter 14 Supply Chain Management Benefits of JIT Reduces raw material inventories Shortens lead times Creates better supplier relationships Reduces production and storeroom costs Reduces paperwork

Electronic Data Interchange Chapter 14 Supply Chain Management Order Processing Electronic Data Interchange Information technology that replaces paper documents that accompany business transactions with electronic transmission of the information.

Order Processing Inventory Control System Chapter 14 Supply Chain Management Order Processing Inventory Control System A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand.

Order Processing Materials Requirement Planning (MRP) Distribution Chapter 14 Supply Chain Management Order Processing Materials Requirement Planning (MRP) An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. Distribution Resource Planning (DRP) the replenishment of goods from the manufacturer to the final consumer.

Materials Handling Functions Chapter 14 Supply Chain Management Materials Handling Functions Receive goods into warehouse Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment Identify, sort, and label goods

Transportation Airways Water Pipelines Motor Carriers Railroads Chapter 14 Supply Chain Management Transportation Airways Water Pipelines Motor Carriers Railroads

Transportation Mode Choice Chapter 14 Supply Chain Management Transportation Mode Choice Cost Transit time Reliability Capability Accessibility Traceability 25 25