Supply_Chain_Drivers__1_

Supply Chain Management Overview

• PowerPoint presentation by Seung-Kuk Paik, Ph.D.

• Focus on supply chain drivers in the context of Chopra and Meindl's framework.

A Framework for Structuring Drivers

• Competitive Strategy and Supply Chain Strategy

  • Align efficiency and responsiveness.

• Supply Chain Structure

  • Logistical Drivers include:

    • Facilities - locations for storage or manufacturing.

    • Inventory - raw materials and finished goods.

    • Transportation - movement of goods within the supply chain.

  • Information - data crucial for managing supply chain.

  • Sourcing - selection of supply chain activities.

  • Cross-Functional Drivers

    • Pricing - strategy affecting all supply chain aspects.

Achieving Strategic Fit

• Competitive strategy must be closely aligned with all functional strategies.

• Strategies must interact effectively to support overall goals.

• Supply chain design must support the overarching strategy.

Efficient vs. Responsive Supply Chains

• Efficient Supply Chains

  • Goal: meet demand at the lowest possible cost.

  • Focus on cost minimization across all aspects.

• Responsive Supply Chains

  • Goal: query the demand rapidly, prioritizing flexibility over cost.

  • Focus on capacity flexibility and impressive lead times.

• Key Comparisons:

  • Product Design and Pricing Strategies differ notably.

  • Inventory and Supplier Strategies cater to different needs.

Drivers of Supply Chain Performance

• Facilities

  • Role: locations for assembly/storage impacting economies of scale and responsiveness.

• Inventory

  • Management of all product forms to fulfill demand efficiently.

• Transportation

  • Facilitates movement affecting overall responsiveness and cost efficiency.

• Information

  • Provides insight into asset utilization and coordination, enhancing decision-making.

• Sourcing

  • Involves purchasing and supplier relationship management.

• Pricing

  • Impacts demand matching and overall cost structure.

Facilities in the Supply Chain

• Critical decisions involve:

  • Flexibility, type of product focus, and facility location.

• Balancing efficiency and responsiveness based on the facility's role.

  • Metrics for Evaluation:

    • Capacity, utilization, processing times, flow times, etc.

Inventory Management

• Essential for satisfying customer needs amidst supply-demand mismatches.

• Little's Law: relationship among inventory, flow time, and throughput.

• Striving for the right form, location, and quantity to balance cost and responsiveness.

• Metrics:

  • Inventory turnover rates, fill rates, and accuracy measurements.

Transportation's Role

• Facilitates movement throughout the supply chain.

• Decisions affect network design and mode selection.

• Tension between responsiveness and cost-effectiveness noted.

• Metrics:

  • Cost analysis based on various shipments and routes.

Information Management

• Key driver of efficiency and responsiveness.

• Investment in information enhances transaction visibility and process coordination.

• Various technologies used include EDI, ERP systems, and Blockchain tools.

• Metrics:

  • Tracking forecast accuracy and variance from operational plans.

Sourcing Strategies

• Critical processes for procuring goods and services effectively.

• The globalization of sourcing impacts decisions on outsourcing and responsiveness.

• Evaluation metrics include supplier performance and cost management data.

Pricing Dynamics

• Sets customer charge rates, impacting supply and demand dynamics.

• Strategies can be tailored for responsiveness requirements.

• Components:

  • Distinguishing between fixed and variable pricing methods.

  • Quantitative metrics tracking pricing effectiveness.

Guidelines for Logistics and Supply Chain Performance

• Performance Measures:

  • Quantitative, aligned with corporate strategy.

  • Focus on customer needs with a balance in approach.

  • Promote trust through accurate cost assessments.