scm304 ch. 1 (unfinished)

problems arising with the traditional distribution model towards the end of the 20th century

attempted solution

why didn’t the solution work?

lengthy process + issues had big impact on efficiency

solution: accumulating inventory

delays still occurred due to amount of product variations demanded by customers

in what ways did customers change that motivated the supply chain revolution?

what caused them to change?

1. desire for wider range of products grew

   1. less scarcity & greater ability of producers

2. went from passive acceptance of distribution process to active involvement

   1. internet

how do the supply chain and logistics interlink?

supply chain = framework for logistical plans

logistics constantly change as supply chain evolves

why is the supply chain model appealing to managers?

• improve competitiveness via business network

• improved efficiency via eliminating redundant work

core competency

unique set of company’s skills, knowledge, & resources

specialization

segment of supply chain focused on by company

how did managers realize that dependency was essential for success?

planning core competency’s, specialization, and economy of scale around dependent business relationships led to better results

vertical integration

company owns whole production process / supply chain alone

what caused the study of distribution / marketing channels?

what does it focus on?

the need for functional dependency

classifying company’s based on their role in the distribution process

to limit issues between channels, what did scholars reccomend?

that all channels together have

1. an overseer

2. commitment among all members

3. predetermined process to resolve any conflicts

channel integration

main issue with initial channel integration

bonding all segments of distribution / marketing as one unit in the eyes of the customer

companies will ultimately put individual goals first

three basic perspectives of value

economic, market, & relevancy

economic value

customer take-away

main sector providing economic value

efficiently & inexpensively creating a product / service

quality at a low price

procurement / manufacturing strategy

market value

customer take-away

main sector providing market value

presenting attractive assortment of products at right time / place

convenient product / service assortment + choice

market / distribution strategy

relevancy value

customer take-away

main sector providing relevancy value

right products & services at the right price that are further modified to appear customer-specific

unique, catered product / service bundle

supply chain strategy

procurement vs. manufacturing

procurement is finding sources for materials while manufacturing is using the sourced materials

multiple firms collaborate within a framework of resource flows & constraints between two ends: materials and customers

how does the supply chain ultimately provide value?

when all resource flows are functional from end-to-end

1. information

2. product

3. service

4. financial

5. knowledge

value-creation process

result of value-creation process

each firm does some sort of logistics to ensure their specialized resource flow is smooth, causing all flows to be smooth

result - effective, efficient, relevant, & sustainable product / service creation + delivery

how does the integrated supply chain method shift the traditional channel arrangement method?

1. from loosely linked groups to a coordinated initiative

2. from independent to dependent businesses

benefits of the integrated supply chain method compared to the traditional channel arrangement method

increased market impact, efficiency, competitiveness, & room for improvement

when in practice:

why do conflicts of interest arise in the supply chain?

why is the supply chain defined as fluid?

firms may participate in multiple separate supply chains

because based on demand, firms may enter / exit the chain or increase / decrease workload given to the chain

product supply chain

model involving suppliers, manufacturers, distributors, & retailers for customer products

promotional supply chain

main difference from product supply chain

supply chain for items being heavily promoted, requiring quicker delivery

speed of delivery

bulk material supply chain

main difference from product supply chain

supply chain for bulk products that are commonly low in value

transportation can utilize significant economies of scale due to low value

talent supply chain

supply chain where the product is an individual’s talent and the value-added process is training / education

b2c supply chain

main difference from product supply chain

supply chain for products sold directly from manufacturers to consumers

little to no value-adding process

recycling supply chain

supply chain for recycling process

resource supply chain

supply chain for information-based technology firms

construction supply chain

supply chain for construction equipment / supplies

recovery supply chain

supply chain for recovering used material that has been well-used

humanitarian supply chain

supply chain for providing support for disaster recovery

global supply chain

main difference from product supply chain

supply chains that deal with different regions of the world

must take into account regional differences

durables supply chain

main difference from product supply chain

supply chain for heavy, hard-to-transport equipment

requires specialized transportation equipment

innovative supply chain

main difference from product supply chain

supply chain for products rapidly making it to market

entire supply chain process is expedited

military supply chain

supply chain for military operation support

clinical trials supply chain

supply chain for precise demands of clinical trials

supply chain management

processes to integrate suppliers, manufacturers, distributors, and retailers together to produce / distribute the right products at the right place / time to meet both firm goals and consumer wants

information-based / digital supply chain

coordinated, cross-functional strategy involving internal and external partners that utilizes process and information to improve efficiency

logistics management

process that creates value, focused on controlling the timing related to raw, work-in-process, and/or finished material at the lowest cost

logistics

combination of order management, inventory, transportation, & warehouse activities

integrated logistics

links entire supply chain as one smooth process

across all definitions of supply chain management, what concepts stay constant?

what do each of these concepts mean for the chain?

1. effective and efficient flow

   1. need to work collaboratively to deliver product at min. cost

2. cross-functional collaboration

   1. internal functions work together to minimize waste / redundancy

3. achieving the consumer’s value proposition

   1. deliver product in form that meets unique consumer needs

4. minimizing systemwide cost

   1. minimizing end-to-end cost for all chain-related activities

how does improving the functional specialization within a system impact the system?

better performance of a specific function = better performance of overall process

integrative management

combining all parts of a system smoothly, efficiently, and cost-effectively

functional specialization

the specific purpose of a part of a system

how does integrated management achieve lowest total process cost?

by capturing trade-offs between function

what does it mean for integrated management to focus on lowest total process cost rather than lowest cost for each individual part of the process?

each individual part of the process isn’t the lowest it can be, but rather each is set to the correct cost to be overall the lowest it can be

following the increase of managerial attention to the supply chain, what three facets arose?

1. enterprise extension - collaboratively managing multiple sections of the supply chain

2. integrated service providers - companies combining several of the background services of the supply chain

3. collaboration, but competitively

information sharing paradigm

participants in supply chains should voluntarily share past, present, and future data / plans

process specialization paradigm

sections of the supply chain should jointly plan operations to eliminate redundant or nonproductive work

how do transportation services benefits shippers?

by providing multiple modes of transportation, they decrease the shippers’ capital investment

how do warehouse services benefit shippers?

by consolidating shipments from multiple firms into one warehouse, they both decrease shippers’ capital investment and save space

asset-based vs. nonasset-based integrated service providers

asset-based: use physical transportation / warehouse equipment

nonasset-based: use information services