1. Chapter 14 Supply Chain Management
Marketing 333
Chapter 14
Supply Chain Management

2. Supply Chain Management
Chapter 12 Marketing Channels and Supply Chain Management
Supply Chain Management
Supply Chain
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.
Notes:
Supply chain management helps companies achieve competitive advantage. By visualizing the entire supply chain, supply chain managers can maximize strengths and efficiencies at each level of the process to create a highly competitive, customer-driven supply system that is able to respond immediately to changes in supply and demand.
In mass production, standardized products were “pushed” down the supply chain to the consumer. In contrast, in today’s marketplace, products are being driven or “pulled” by customers who expect products configured to their unique needs. Supply chain management allows companies to respond with the unique product configuration and mix of services demanded by the customer.

3. Supply Chain Integration
Chapter 14 Supply Chain Management
Supply Chain Integration
Relationship
Integration
The ability of two or more companies to develop social connections that serve to guide their interactions when working together.
Role
Specificity
When each firm in a supply chain has clarity in terms of knowing which firm is the leader, which firms are the followers, and which responsibilities are assigned to each firm.

4. Measurement Integration
Chapter 14 Supply Chain Management
Measurement Integration
Measurement
Integration
The performance assessment of the supply chain as a whole that also holds each individual firm or business unit accountable for meeting its own goals
An accounting method used in measurement integration to assess the costs associated with each supply chain activity
Activity-Based
costing (ABC)
Notes:
Measurement integration reflects the idea that performance assessments should be transparent and measurable across the borders of different business units and firms, and also assess the performance of the supply chain as a whole while holding each individual firm or business unit accountable for meeting its own goals.
Through the use of ABC, costs can be accurately assigned to products, services, departments, or specific customers.

5. Technology and Planning Integration
Chapter 14 Supply Chain Management
Technology and Planning Integration
The creation and maintenance of information technology systems that connect managers across and through the firms in the supply chain
Technology and planning integration
Notes:
World-class supply chain management depends on thorough, accurate, and timely information acquisition and usage.
By achieving technology and planning integration across their supply chains, firms can gain the information needed to execute short- and long-term planning, and thereby make better operational decisions.

6. Material and Service Supplier Integration
Firms should link seamlessly to those outsiders that provide goods and services to them.

7. Internal Operations Integration
Chapter 14 Supply Chain Management
Internal Operations Integration
Links internally performed work into a seamless process that stretches across departmental and/or functional boundaries, with the goal of satisfying customer requirements
Internal Operations Integration
Notes:
1. A fundamental challenge being experienced by most businesses is the need for integrating various departments within the firm, such as marketing, research, sales, and logistics, all of which help in creating and delivering the value-added customer offering.

8. Chapter 14 Supply Chain Management
Customer Integration
Customer
Integration
A competency that enables firms to offer long-lasting, distinctive, value-added offerings to those customers who represent the greatest value to the firm or
supply chain
The supply-chain process whereby customers are placed into groups A, B, and C according to their overall long-term value to the firm and to the extent to which the firm can serve their desires
ABC Segmentation
Notes:
Highly customer integrate firms assess their own capabilities and then match them to customers whose desires they can meet and who offer large enough sales potential for the linkage to be profitable over the long-term.

9. Chapter 14 Supply Chain Management
Notes:
Exhibit 14.2 displays the eight critical business processes on which supply chain managers must focus.

10. 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.
Notes:
The customer relationship management process allows companies to prioritize their marketing focus on different customer groups according to each group’s long-term value to the company or supply chain.
Companies that emphasize the customer relationship management process throughout their supply chains are able to deliver best-in-class customer experiences and generate enormous customer loyalty.

11. 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.
Notes:
Customer service management processes are increasingly being enhanced through the use of customer care software applications.

12. 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.
Notes:
The demand management process seeks to align supply and demand throughout the supply chain by anticipating customer requirements at each level and creating demand-related plans of action prior to actual customer purchasing behavior.
Demand management seeks to minimize the costs of serving multiple types of customers who have variable wants and needs.
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.

13. 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.
Notes:
One of the most fundamental processes in supply chain management is the order fulfillment process, which involves generating, filling, delivering, and providing on-the-spot service for customer orders.
When the order fulfillment process is managed diligently, the amount of time between order placement and receipt of the customer’s payment following order shipment (known as the order-to-cash cycle) is minimized as much as possible.
Since many firms do not view order fulfillment as a core competency, they often outsource this function to a third party logistics firm that specializes in the order fulfillment process.

14. 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
Notes:
The manufacturing flow management process is concerned with ensuring that firms in the supply chain have the needed resources to manufacture with flexibility and to move products through a multi-stage production process.
The goals of the manufacturing flow management process are centered on leveraging the capabilities held by multiple members of the supply chain to improve overall manufacturing output in terms of quality, delivery speed, and flexibility, all of which tie to profitability.

15. 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
Notes:
Supplier relationship management provides structural support for developing and maintaining relationships with suppliers.
The management of supplier relationships is a key step toward ensuring that firms’ manufacturing resources are available, and thereby the supplier relationship management process has a direct impact on each supply chain member’s bottom-line financial performance.

16. 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.
Notes:
New products and services are not the sole responsibility of a single firm who serves as inventor, engineer, builder, marketer, and sales agent, but rather, they are often the product of a multi-company collaboration with multiple firms and business units playing unique roles in new product development, testing, and launch activities, among others.

17. 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.
Notes:
In addition to the value of managing returns from a pure asset-recovery perspective, many firms are discovering that returns management also creates additional marketing and customer service touch points that can be leveraged for added customer value above and beyond normal sales and promotion-driven encounters.

18. Supply Chain Strategies
Chapter 14 Supply Chain Management
Supply Chain Strategies
Lean Supply
Chain
Management
Agile Supply
Chain Management
The strategy that focuses primarily on the removal of waste from the supply chain to achieve the lowest total cost to the members of the supply chain system
The supply chain strategy
that focuses primarily on
the ability of the firm to fulfill
customer demand, even if this
means somewhat higher costs
Notes:
Most firms must choose between two strategic philosophies: high responsiveness to customers at any cost, or profitability through waste reduction. These strategic philosophies are often referred to collectively in what has come to be known as the “lean” versus “agile” debate.

19. Lean versus Agile Supply Chain Management
Chapter 14 Supply Chain Management
Lean versus Agile Supply Chain Management
Notes:
Exhibit 14.3 depicts under what conditions companies should use lean, agile, and/or Leagile supply chain management strategies.

20. Mapping The Supply Chain
Chapter 14 Supply Chain Management
Mapping The Supply Chain
Notes:
Exhibit 14.4 shows a typical supply chain network

21. Logistical Components of the Supply Chain
Chapter 14 Supply Chain Management
Logistical Components of the Supply Chain
Supply Chain Team
Sourcing & Procurement
Order Processing
Inventory Control
Warehouse & Materials Handling
Transportation
Logistics Information System
Notes:
The supply chain consists of several interrelated and integrated logistical components, as shown on this slide.
Integrating and linking all of the components is the logistics information system.
The supply chain team orchestrates the movement of goods, services, and information from the source to the consumer. The team cuts across organization boundaries and communicates/coordinates/cooperates extensively.
The best supply chain teams move beyond the organization to include external participants, such as suppliers, transportation carriers, and third-party logistics suppliers.

22. Trends in Supply Chain Management
Chapter 14 Supply Chain Management
Trends in Supply Chain Management
Globalization of supply chain management
Electronic distribution
Outsourcing of logistics functions
Advanced computer technology
Notes:
Several technological trends are affecting the job of the supply chain manager:
As global trade becomes a more decisive factor in success or failure for firms of all sizes, global supply chain management increases in importance.
Advanced computer technology has boosted the efficiency of logistics with tools such as automatic ID systems, radio frequency technology, and supply chain software systems.
Outsourcing of logistics functions is a rapidly growing segment in which a manufacturer or supplier turns over the entire function of supply chain management to an independent third party.
Electronic distribution includes any kind of product or service that can be distributed electronically. For instance, computer software can be purchased and downloaded electronically.
5. Due to recent world events, firms are expending more effort on securing their supply chains from external threats than at any time in recent memory. Natural disasters, widespread technology failures, political instability, terrorism, disease pandemics, and worker strikes are but a few of the major events that can cause a supply chain to shut down temporarily or for an extended amount of time.
Outsourcing of logistics functions