supply chain

Drivers of Supply Chain Performance

Drivers of Supply Chain Performance

1. Facilities

2. Inventory

3. Transportation

4. Information

5. Sourcing

6. Pricing

supply chain

Encompasses all activities or operations needed to

convert raw materials into final products

From sourcing through component manufacturing and _______ to ________

final assembly, end markets

It includes necessary material handling and storage

___________ activities

(logistics)

It includes handling of return flows of products and

Possible ___________ and components

re-use of materials

Closed loop supply chains

a reverse for supply

chains where manufacturer reclaims products

from customers to revalorize it

end to end supply chains

These activities encompass a number of companies

and organizations jointly operating in a chain or

network

E2E

end to end process supply chain. It involves

the process in entirety, from procurement until it

reaches customers.

Logistics

It refers to the transportation and storage of

materials, parts, and products in a supply chain

warehouses

Includes inbound and outbound processes to and

from ___________

Transport operations

Internal and external materials handling and __________

transfer of information

It also includes the execution of services and the

_______________ between various stages of a

supply chain.

Supply Chain Management (SCM)

Encompasses planning and management of all

supply chain operations

Channel Partners

SCM includes coordination and collaboration with _____________

Channel partners:

Suppliers

Intermediaries

Third party service providers

Customers

supply and demand

SCM integrates ______and _______

management within and across companies

logistics management

Is part of the supply chain management that plans,

implements, and controls efficient, effective forward

and reverse flow and storage of goods and services

and related information between the point of origin

and the point of consumption in order to meet

customer's requirements

Logistics

material handling and storage _________

activities

LOGISTICS includes:

• fleet management

• warehousing

• materials handling

• order fulfillment

• logistics network design

• inventory management

• supply/demand planning

• management of third party logistics service providers

Proper execution of logistics operations depends on/has

impact on:

Sourcing and procurement

Production planning and scheduling

Packaging and assembly

Customer service

Key aspects of Supply Chains and Logistics

1. Availability of materials, products, and information

2. Cost efficiency

3. Customer orientation

4. Speed

5. Effectiveness

6. Environmental sustainability

7. Social aspects

Stakeholders

Supply chains encompass various companies; for

each company, its customers may be the next

_______ in the next supply chain.

Coordination

___________ of the goods flow throughout the

supply chain

synchronization

Requires the ___________ of formidable task of activities that are controlled by

different stakeholders, each with their own

objectives.

cost efficiency

maximum

output is achieved with minimal materials and

manpower utilization

cost efficiency

the dominant measure of performance of

production and logistic processes

production before

large batch manufacturing and

low product variety; simply repetitive in nature and

performed by one operator or man/machine

combination

mass production facilities

at first glance may appear

efficient in the short run. Overall, it leads to high work in process inventory

costs

mass production facilities issues that emerge include:

Demand variety

Product life cycle

Risk of obsolescence

Customer Orientation

Consumer markets change

• Customers demand more product variety

distinguish, competitors, customers' demand

Companies need to __________ themselves from their

_________ and respond to _____________

Pull market

Characterized by:

✓ Customer differentiation

✓ Shorter product life cycles

✓ Tailored solutions

Timeliness

In customer dominated market, _________ of

delivery is a key requisite in SCM

Classical timely delivery

keep sufficient anticipation

of stocks at large number of locations

high inventories

____________ equal to large capital invested and

limits the liquidity of companies

speed

In customer dominated market, the timeliness of

delivery is a key requisite in SCM

Lean production and lean logistic

it refers to the

ability to limit activities in a supply chain to those

that really add value to products and services

Effectiveness

Avoiding activities that are considered waste

Just in time management

Lean production is seen in __________

philosophy

Effectiveness

Product quality control and process quality control

environmental sustainability

Issues- that current production and logistics systems

have caused damage to the environment (considered

unacceptable

Can put a price to infrastructural load

✓ Emission of hazardous materials

✓ Congestion

✓ Stench

✓ Noise

Main Objectives of Logistics

1. Right goods (as ordered)

2. Right quantity

3. Right quality

4. Right time

5. Right place

6. Right cost

7. Right sustainable impact/footprint

push market strategy

aims to keep products in stock even before the customers order them.

Pull Market Strategy

produces goods in accordance with the demand of the customers.

© Responsiveness

© Efficiency

It determines supply chain performance in terms of :

goal of supply chain performance

to structure the drivers to achieve the

desired level of responsiveness at the lowest possible

cost; thus improving the supply chain surplus and the

firm's financial performance

▪ Stored

▪ Assembled

▪ Fabricated

These are actual physical locations in the supply

chain network where product is:

Facilities

These are actual physical locations in the supply

chain network.

▪ Production sites - (plants)

▪ Storage sites - (warehouses)

There are two major types of facilities:

Inventory

• It encompasses:

▪ Raw materials

▪ Work in process

▪ Finished goods- within a supply chain

different things

in inventory responsiveness, levels of inventory, and costs are _____________

dangerous

high level of inventories can be ___________

transportation

It entails moving inventory from point to point in the

supply chain

performance characteristics

Transportation can take form of many combinations

of modes and routes, each with its own _________________

supply

chain responsiveness and efficiency

Transportation choices have a significant impact on _____________ and ______________

Knowledge

____________ give companies power.

It consists of data and analyzing data concerning:

• Facilities

• Inventory

• Transportation

• Costs

• Prices

• Customers

Sourcing

the choice of who will perform a particular supply

chain such.

the choice of who will perform a particular supply

chain such as :

▪Production

▪ Storage

▪ Transportation

▪ Management of information

Pricing

It determines how much a firm will charge for the

goods and services that it makes available in the

supply chain

differential pricing

provides responsiveness to

customers to value it

behavior of the buyer

It affects the _____________ of the good or

service, thus affecting supply chain performance

revenue

Changes in pricing impacts ________ directly but

could affect cost to other drivers

Cycle View of Supply Chain

Is useful in operational decisions

Rules and responsibilities

Specifies the _________ and _________ of each

member of the supply chain

Infrastructure

Its detailed process description forces its supply

chain designer to consider the _______________ to

support the processes

interface, successive

The processes in a supply chain are divided into a

series of cycles, each performed at the __________

between two _________ stages of a supply chain

Cycle view of supply chain is useful when setting up

information system to:

✓ support supply chain operations

✓ clearly define process ownership (who is

responsible for the process) and objectives

Four Process Cycles in Supply Chain:

1. Customer order cycle

2. Replenishment cycle

3. Manufacturing cycle

4. Procurement cycle

customer arrival

The starting point for any

supply chain

customer arrival goal:

facilitate contact

between customer and

appropriate product

customer arrival keywords:

location or site,

access to choices, making of

order decisions

customer order entry

Involves customers informing

retailer what products they

want to purchase

customer order entry objectives:

quick, accurate, communicated to other supply chains

customer order fulfillment

Customer's orders are filled

and sent to the customer

customer order fulfillment objective

get correct

orders to customers at

promised dates at lowest

possible cost

Customer order receiving

In this process, customers

receives the order and takes

ownership

retail order trigger

There is an ordering or

replenishment policy

retail order trigger objective

to maximize

profitability by ensuring

economies of scale and

balancing product availability

and the cost of holding

inventory

Retail order entry

Retailer is now the customer

placing the order and

conveyed to the distributor

Retail Order Fulfillment

takes at the

DISTRIBUTOR level, Objective: get replenishment

order to retailer at low costs

Retail order receiving

Replenishment order arrives at

retailer

• Update all inventory records

retail order receiving objective

update inventories

and displays quickly and

accurately at the lowest cost

order arrival

Warehouse or distributor sets a

replenishment order base on

forecast of future demand and

current product inventories

order arrival

Order are conveyed to the

manufacturer

• Based on availability and

forecast

production scheduling

production

scheduling process is to

maximize proportion orders

filled on time and keeping

costs down

Manufacturing and scheduling

Order fulfillment process of manufacturing cycle

Manufacturing and scheduling objectives

create and ship

product by promised due

date and meet quality

requirements and keep

costs down

receiving

Products are received by

distributor, retailer, or

customer

• Inventory records are updated

• Storage and fund transfers

take place

Procurement cycle

ensures that materials are available for manufacturing to occur according to schedule

customer order cycle

customer arrival

customer order entry

customer order fulfillment

customer order receiving

Replenishment Cycle

retail order trigger

retail order entry

retail order fulfillment

retail order receiving

manufacturing process

order arrival, production scheduling

Manufacturing/shipping

Receiving

Procurement cycle

component order arrival

production scheduling

manufacturing/shipping

receiving

Cycle view of the supply chain

defines the

processes involved and who are responsible for it

• It is useful in operation decisions