supply chain final

Transactional, Collaborative, Strategic

3 Levels of Partnership in a supply chain

Transactional

• “one night stand”

• level of partnership by minimal integration or collaboration, similar to a vending machine transaction

• little or no integration or collaboration

Collaborative

• “relationship”

• level of partnership which involves cooperation and modification of business objectives for long-term goals

• you share some strategy with them

Strategic

• “marriage”

• level of partnership where customized relationships producing better results collectively than individually

• highly relational

Strategic

_________ represents customized relationships producing better results collectively than individually.

7 Laws of Collaborative Relationships

• Real and recognized benefits to all members

• Dynamic creation, measurement, and evolution of collaborative partnerships

• Co-buyer and co-seller relationships

• Flexibility and security

• Collaboration across all stages of business process integration

• Open integration with other services

• Collaboration around essential logistics flows

Services 3PLs provide

• Domestic Transportation

• Freight Forwarding

• International Transportation

• Customs brokerage

• Warehousing

• Transportation planning and management

• Freight bill auditing and payment

• Cross docking

• Reverse Logistics

• Supply chain consultancy services

• Fleet management

• Product labeling, packing, assembly

• Order management and fulfillment

3PLs

most shippers use them and agree they improve service

quantifiable

quantitative

quantifiable

measures used to assess and evaluate the effectiveness of business operations

measure, metric, index

types of performance metrics

measure

• performance metric

• requires no calculations and w simple dimensions or percentage of something

• ex: units of inventory, backorder dollars, test grade

metric

• performance metric

• involves a calculation or combination of measurements, often in the form of a ratio

• ex: inventory turns, return on investment (ROI), sales dollars per SKU

index

• performance measurement

• combines 2 or more metrics into a single indicator usually used to track trends in the outputs of a process

• ex: perfect order, cash to cash cycle

traits of good logistics performance measurement

• QUANTITIATIVE

• Easy to understand and calculate

• Encourages appropriate behavior

• Visible

• Well-defined and mutually understood

• Encompasses outputs & inputs

• Measures only what is important

• Multidimensional

• Uses economies of effort

• Facilitates trust

Successfully Developing a SC Metrics Program

• is a result of a team effort

• involves customers and suppliers (where appropriate)

• Develops a tiered structure

• Identifies metric “owners” and ties metric goal acheivement to an individual’s or division’s performance evaluation

• Establishes a procedure to mitigate conflicts

• Is consistent with corporate strategy

• Establishes top management support

metrics program

Establishes a procedure to mitigate conflicts = successfully developing a SC ____ ______

margin vs markup

margin/sales price vs cost x markup percentage + cost

margin percentage

(sales price-cost of goods)/sales price x 100=

markup percentage

(Cost x markup percentage) + Cost

time

process measurement category

• on-time delivery/receipt

• order cycle time

• order cycle time variability

• response time

• forecasting/planning cycle time

quality

process measurement category

• overall customer satisfaction

• processing accuracy

• perfect order fulfillment

• on time delivery

• complete order

• accurate product selection

• damage free

• accurate invoice

• forecast accuracy

• planning accuracy: Budgets and operating plans

• schedule adherence

cost

process measurement category

• finished goods inventory turns

• days sales outstanding

• cash to cash cycle time

• total delivered cost

• cost of goods

• transportation costs

• inventory carrying costs

• material handling costs

• all other costs

• info systems

• administrative

• cost of excess capacity

• cost of capacity shortfall

other/supporting

process measurement category

• approval exceptions to standard

• minimum order quantity

• change order timing

• avaliability of information

logistics, profit

When _____ Cost (costs to ship/make everything) goes up, organization’s ___ goes down

inventory level, capital

when _________ (amount you are buying) goes up, ____($$) goes down

high level relationships

• logistics cost up, organization’s profit down

• inventory level up, capital down

Return on Assets

ROA

profit utilized

• return on assets= ____/assets ____

• think about stocks

cash to cash

• time from when your company spent money (buying inventory, buying goods) to when you are getting paid by customers

• loaning $$ example where friend gives you money next day vs 6 months from now

liquid

• think cash money

• stock is pretty ___

• houses are not very ___

cash to cash

• why is ____________ an important metric

• data is relatively easy to gather

• accounting (liquidity)

• supply chain management

inventory, receivables, payables

• 3 parts of calculating C2C

• days of ____, ___, ____

days of inventory

• focuses on existing inventory level and represents how long it will take (in days) for the company to sell its inventory; generally a lower value indicates better inventory turnover

days of receivables

focuses on the current sales and how long it takes to collect cash from the sales; a lower value indicates a company collects its money in a shorter period do time

days of payables

focuses on the amount of money the company owes its suppliers for the inventory and goods it purchases; a higher value is preferred, indicating a company holds its cash longer, increasing its investment potential

days of inventory + days of receivables - payables

cash to cash calculation=

flow of information

information connects the extended supply chain, providing cross-chain insights regarding demand, customer orders, delivery status, inventory stock levels, and production schedules

EDI

Electronic data interchange is an older technology. It uses a batch process to transmit very standardized code between businesses. Expensive to start-up and people with expertise are retiring each day. Not web based or real time.

ex: computer coding thing

API

It transits data between businesses in real time. Easier for programmers to learn and is web based. Inexpensive to start-up and much more flexible that EDI.

ex: uber, Mcdonald’s app

Electronic data interchange

form of technology companies use that is old, expensive to start, not teaching it anymore, not in real time, large companies have been using for a long time, so its hard for them to get away from it

Application programming interface

for of technology companies use, it’s a new one, use of everyday apps, web-based product, real time, it is still being taught, more flexible than the other

pitfalls

the ___ assosiated with systems adoption or upgrades

• unrealistic assumption that supply chain technologies will readily solve or fix flawed supply chains

• weak technology-process alignment, leading to ill-fitting solutions that fail to acheive their promise

• Technology haps as a result of piecemeal purchases and development of technologies

• Challenges in cross-chain systems integration with suppliers, service providers, and customers

• Poor planning and preparation for teachnology implementation

pitfalls

• the ____ associated with systems adoption or upgrades

• companies are performing poorly because they need system upgrade, upgrade doesn’t help because it’s a problem w their company

• companies are using too many different systems in different parts of their company (not necessary)

• challenges in cross-chain systems integration with suppliers, service providers, customers- some companies need larger companies to do the hard stuff cause they don’t have the tech for it

• not training employees enough

supply chain planning

• think about the FUTURE

• helps organization shift from solo planning activities to synchronized planning

  • S&OP

  • CPFR

  • event planning

  • demand planning

  • supply planning

  • POS

  • inventor planning

  • inventory strategy optimization

  • strategic network design

supply chain execution

• things happening in SC RIGHT NOW

• software companies use to facilitate day to day performance

  • Warehouse Management Systems

  • Order management Systems

  • Distributed Order Management

  • Transportation Management Systems

  • Global Trade Management

  • Manufacturing Execution Systems

Warehouse Management Systems

this form of supply chain execution works on inventory management, labor management, order processing, yard/docking management, returns management

acception management

good event management system enables you to do __________

event management

• event happening across supply chain

• when you order online, order confirmation, shipping confirmation, order delivery, survey

• tools that collect data in real time from multiple sources and convert info to companies

• think monitoring, notification, simulation, control, and measurment

capabilities

______ of analytics and business intelligence tools

• the data collection and “big data” analytics

• self-service reporting

• performance scorecarding versus goals

• development of graphical dashboards

• activity monitoring supporting event management

• access to data residing on multiple SCIS

Enterprise resource planning systems (ERP)

incorporate internal and external systems into a single unified solution that spans the enterprise

Supplier relationship management (SRM)

A controlled and systematic approach to managing an organization’s sourcing activities for goods and services

Customer relationship management (CRM)

focuses on practices, strategies & technologies used to manage & analyze customer interactions & data throughout relationship lifecycle

Automatic identification (auto-ID) & data capture technologies

recognize objects, collect relevant information, and feed the data directly into the SCIS

strategy

• it is the plan

• thoughtful planning (setting goals), achieving goals (identify needed actions), resource or actions (utilizing resources)

• helps decision makers distribute limited resources

• provides a framework for assessing costs and benefits

• most of the time there’s not enough product or something

benefits of strategy

• helps achieve goals

• allocates resources

• clarifies purpose

• gives direction for action

7 Principles of Supply Chain Management

• survive the test of time

• still a long way to go on SC strategy immplimation

• technology and data will be the game changers in future

Principle 1

• Adapt supply chain based on service needs to each customer segment

• ex: Polaris segmenting customers into cyclists, snow mobilers, sxs and atv buyers

Principle 2

• Customize logistics network for each segment

• ex: polaris having many DCs but more with snow mobiles up north compared to the other DCs

Principle 3

• Align demand planning across the supply chain

• ex: high temperatures are forecasted for the winter, so less snow mobiles, polaris will plan accordingly

Principle 4

• Differentiate product closer to customer

• ex: birkenstock makes soles of shoes in germany, but everything is brought to the US for faster delivery (same with automobile makers)

Principle 5

• Outsource strategically

• ex: outsourcing for cheapness (china)

Principle 6

• Develop information technology that support multi-level decision making

• ex: can’t sacrafice customer service to make a buck, vice versa

Principle 7

Adopt both services and financial metrics

data

• SC analytics

• unorganized facts that need to be processed

ex: levels of inventory at ends of financial periods

information

• Sc anlytics

• data that has been gathered, processed, organized & structured in a given context

ex: average levels of inventory and/or levels of inventory by SKU

descriptive

• sc analytics

• what, when, where questions

predictive

• sc analytics

• focuses what is likely to happen

prescriptive

• sc analytics

• predicting the future and answers what should be done

cognitive

• sc analytics

• AI, machine learning

Unique Value Proposal

• company’s competitive position related to its SC (customer perspective)

• every product has a _________

• order qualifiers/ order winners

• ex: mr holloway’s van

order qualifiers

• parts of a product that you want- parts of a backpack

• basic criteria for a firm’s product/services to be considered for purchase

order winners

• criteria that differentiate from one firm to another

• probable the one that’s the cheapest or makes you say yes this one

• ex: mr holloway’s van being plastic and easy to wash

efficient model

• typically commoditized products

• fierce competition on rates

• production efficiency is paramount

• try to bypass warehousing when possible

• ex: toilet paper, cereal

• must make it cheap- you wouldn’t put cereal on a plane because its so cheap and you’d waste so much money

fast model

• lots of seasonal SKUs

• Consolidation centers

• “Special buys”

• Forecasting intensive

• think FASHION and SEASONS

• they have to be fast to stay in the right season

continuous flow model

• suited for JIT manufacturing

• high consistency

• heavy information sharing

• think automobile manufacturing

agile model

• high service level requirement- 24 hour shipping think amazon

• volatile volume fluctuations

• high number of SKUs

• Pay higher rates

• have to be able to change direction quickly

customer configured model

• highly customizable products

• difficulty forecasting

• specialized equipment

• think custom made

flexible model

• emergency response

• hard to forecast

• typically executed as projects

• could include pop up field offices

• think FEMA and natural disasters