Logistics and Supply Chain Management

Introduction to Global Supply Chain Management  What is a Supply Chain ? A system or network consisting of organizations and their business processes.  What is a Global Supply Chain ? A supply chain developed in a global scale with eight key business processes that are both cross-functional and cross-firm in nature.

Business Processes Of Supply Chain  SC performs business processes as follows: The Customer Relationship Management Process The Supplier Relationship Management Process The Customer Service Management Process The Demand Management Process The Order Fulfillment Process The Manufacturing Flow Management Process The Product Development and Commercialization Process The Returns Management Process

Why do we need a SC system?  Providing greater value to customers  Faster Order Processing and turn around times  Providing a greater product variety  To provide competitive advantage

What is Global Supply Chain Management?  Built upon eight key business processes that are both cross-functional and cross-firm in nature  Each process is managed by a cross-functional team, including representatives from logistics, production, purchasing, finance, marketing and research and development

Advantages of Global Supply Chain Management Systems  Reduction Of Inventory Costs  Link-up different organization with a common language  Reduce the waste of valuable resources  Increase the transaction speed by exchanging data in real-time  Increase sales by implementing customer requirements more efficiently

Global Supply Chain Operations Reference Model  Developed by the Supply Chain Council as cross industry process reference model for Supply Chain Management.  Includes 5 major Supply Chain Processes: Plan Source Make Deliver Return

Some problems with Global Supply Chains  Parts Shortages.  Underutilized capacities of manufacturing plants.  Excessive finished goods.  Increased transportation distances  Cultural and Social difference among the partners

Case Study : Carrefour’s Global Supply Chain System “To embrace the challenge of building a worldwide company, not only geographically international, but truly global in vision, leveraging each country's experience as we optimize our resources and technology." - Carrefour's Global Vision, Annual Report 1997

Carrefour Strategy In 1997, the second largest retailer, France based Carrefour Group, planned a $170 million project to standardize its business systems and processes across the world to improve its global supply chain. Building shared service centers to manage purchasing and logistics issue to improve the efficiency of supply chain Relied on third-party logistics providers to manage its global operations

Carrefour Supply Chain Implementation Carrefour Supply Chain used the Electronic Data Interchange (EDI) for procurement and basically had three main entities: 1.The Distribution Centers: received, stocked and distributed goods received from suppliers. 2.Logistics 3.Inventory Management

How did technology help Carrefour ? In 2003, Carrefour tied up with See Beyond to install integrated composite application network software: 1) to adapt itself to the local condition by customizing its operations, the merchandize mix and even store formats 2) to integrate its stores, distribution centers and local supply chain partners

The Outcome  Carrefour purchased goods from local manufacturers in all the global markets  90% of the goods at Carrefour stores in developing markets were produced locally.  Local purchases enabled the company to keep its cost low as well as shorten its supply chain

Discuss the following questions: What problems do Carrefour address? How does global supply chain initiative help solve these problems? What issues and challenges do global supply chain strategy present? What can be done to address these issues? What are the business as well as the technology issues that should be addressed when Carrefour implemented global supply chain?