Supply Chain Management

Facilities Along the Supply Chain  Plants  Warehouses  Distribution centers  Service centers  Retail operations

Distribution Routes  Rail  Truck  Water  Air  Pipeline  Computer  Mail  Telephone  In person

Processes within Supply Chain  Forecasting product or service demand  Selecting suppliers  Ordering materials  Inventory control  Scheduling production  Shipping & delivery  Information management  Quality management  Customer service

 Managing the supply chain is coordinating all of the operations of a company with the operations of its suppliers and customers

Uncertainty  There is uncertainty in the supply chain at every stage –Wrong forecasts –Late deliveries –Poor-quality materials or parts –Machine breakdowns –Canceled orders –Erroneous or slow information –Transportation breakdowns

 Problem: Not having the product or service available to customers when and where they want it –Companies cope with this uncertainty with inventory

 Solution: good supply chain management to coordinate all the different activities so that goods can move smoothly and on time from suppliers to customers to distribution to suppliers to customers, while keeping inventories low and costs down.

Effective Supply Chain Mgt  Suppliers and customers work together in a coordinated manner –Sharing & communicating information –Must have the same goals –Need to trust one another Count on quality and timeliness of products and services from suppliers –Must participate together in the design of the supply chain

Control Uncertainty  Identify and understand causes of the uncertainty  Determine how it affects other activities up and down the supply chain  Formulate ways to reduce or eliminate it

Solutions to Uncertainty  Apply TQM principles all along the supply chain  Communication & information flow –Computers –Internet –Point-of-sale –Telecom infrastructure  Facility types, locations, and number

 Wal-Mart example –Page in text

Enterprise Resource Planning ERP  Leading companies: –SAP –Oracle –PeopleSoft –JD Edwards –Bann

ERP Software  Accounting and controlling  Production and materials management  Quality management  Plant maintenance  Sales and distribution  Human resources management  Project management

 ERP example –Page –Problems Costs Failures “ERP software does everything, but nothing well”

Internet & the Supply Chain  EDI  Migration to Internet  What this means for customers  What this means for suppliers

Purchasing & Suppliers  Single-sourcing  Supplier-customer relationship –Prompt, on time delivery –On-demand, JIT –Continuous replenishment

Facilities  Heavy manufacturing  Light industry  Warehouses and distribution centers  Retail and service

Transportation & Distribution  Rail  Truck  Airfreight  Water  Pipeline  Distribution Centers –Speed & location