SUPPLY CHAIN MANAGEMENT Chris Mingledorff CIS 2010

What is a Supply Chain?? A supply chain or logistics network is the system of organizations, people, technology, activities, information and resources involved in MOVING a product or service from supplier to customer.

A Supply Chain includes… -Procurement of raw materials, natural resources -Component manufacturing -Product assembly -Distribution and delivery to consumers

So…why is Supply Chain MANAGEMENT so important today??

SUPPLY CHAIN MANAGEMENT The process of planning, implementing and controlling the operations of the supply chain as efficiently as possible.The process of planning, implementing and controlling the operations of the supply chain as efficiently as possible.OPERATIONS=MaterialsTransportationInformationFinancing

A brief history of modern supply chain management… Creation Era- Early 20 th century- assembly line Integration Era- 1960s- Resource planning systems and software, MRP (later ERP). Used within a single company. Globalization Era- late 1980s- Reducing costs by integrating global sources into the supply chain. Outsourcing manufacturing and assembly operations. Specialization Era- late 1990s to today- Focusing on core competencies, greater outsourcing of manufacturing activities, outsourcing of supply chain operations

SPECIALIZATION ERA People around the world are connected as never before due to advances in technology and reduced barriers to international trade Integration of business alliances and strategic relationships necessitates systems that easily link together to integrate processes and share information

Supply Chain Management as a service?? Increasingly, companies add value by outsourcing all activities unrelated to their core business Rise of the 3PL (3 rd party logistics provider)- Is able to provide complex solutions to all or part of a companys supply chain.

3PL In 2003, 83% of large manufacturers reported using 3PL for at least some part of their supply chain management 77% reported very positive impact on overall supply chain management costs, as well as increased service levels Specialization– We can do it for less than you can do it yourself…and we can do it better! Transportation – Customs – Distribution – Software Packages End-to-end

Companies that utilize 3PL

A company that does not

Wal-Mart- Is it primarily a supply chain company or a retailer? In 1966, Sam Walton attended an IBM school in New York. When he returned to Bentonville, he computerized the operations of all 20 stores he had Wal-Marts supply chain management system led to complete domination of the discount retail sector

Supply Chain Management and Technology Multiple software platforms enable companies to synchronize entire distribution networks What happens in an advanced fully integrated automated supply chain system when a widget is purchased at a retail store? The system can: The system can: Automatically update the companies financial records to reflect the sale Direct the distribution center to pick, pack, and ship another widget Direct the manufacturer of the widget to produce more and ship to the distribution center Alert the suppliers of materials that make up the widget to ship to the manufacturer

Benefits of Effective Supply Chain Management Information Systems Perpetual Inventory Warehouse Management Applications Pick pack and ship Pick pack and ship Just-in-time shipping Performance measurement Physical plant/space requirements Reduction of financial liability for unneeded inventory

Effective Supply Chain Management=Value to Company=Value to People Decrease in costs of goods and services Decrease in space needed to warehouse inventory High availability of a diverse range of products Reduced impact on the environment

Sources Used Material Handling Management ?nID= ?nID= ?nID=1915 Time Magazine profile/walton2.html profile/walton2.html profile/walton2.html Wikipedia.org management