13 SCM

Supply chain Management:

• Supply chain: Series of interrelated processes w/in & across firms to deliver goods/ services to end customer.

Responsibilities:

• strategy and design:

  • develop strategies and network design

  • decade # capacity of facilites

  • make or buy decisions, supplier selection.

• planning and operation:

  • demand forecasting:

  • prod, inv, and distr planning

  • transportation inv manage

  • order fulfillment processes and info tech

Bullwhip effect:

• Variability in order quantities increase upstream in supply chain

• causes

  • behavioral: overreaction, poor understanding

  • systematic: demand forecast updates, order batching, price fluctuation, shortage gaming.

• remedies:

  • shares sales, data adopt, VMI, JIT reduce lead times

  • edi systems, 3pl, long-term contracts

  • penalties for order inflation, historic based on allocation.

supply chain collaboration and coordination

• collaboration: joint efforts to improve supply chain perf

• coordination: aligning conflicts interest via contact (buy-back, discounts, revenue sharing)

• Steps:

  1. Determine projected requirement (max of forecast and actual order)

  2. calc projected available balance:

     • PaB=Oh-SS

  3. Determine MPS quantity & MPS start (based lot sizing and lead time)

VMI:

• Concept:

  • supplier manages inv at customer site and decides replenish

  • ex: contracts, define services levels, penalties and cost sharing

  • benefit: customer reduced admin cost, fever stockouts

  • supplier: data access, prod flex cost savings

Collaborate, plan, forecasting, and replace

• model for coordinatinga force and replenishment.

• goal: Build census forecasting used for planning

  • sales and op planning:

  • produc control

  • costing

  • inv manage

    • acc(payable/receivable)

• ERP:

  • erp: is an enterprise-wide system that integrates all business function

  • operation, sales, finance, HR, etc.

• two main purpose:

  • 1. trans processing: real time business transactions using a central database.

  • 2. decision support: provides tools and info to assist management decision making

Measuring Sc perf:

• key metric:

  • into=COGS/Av Inv

  • service level delivering, on-time delivery, forecast accuracy.

global SC manage:

• globalization forces:

  • foreign dem, cost/tax benefit tax advances, free trade zones, exchange rate shifts.

• Key decision: facility, location, production, allocation, product distribution, supplier dev

facility location consistency:

• promixity to customer, total cost (lobar, land, logistics, infrastructure avaliable (transport, energy, comm)

Factoring rating system:

• steps:

  • list factors, assign weights, score location, calc total scores

  • ex: site B chosen using weighted average score

global SC manage:

• globalization forces:

  • foreign dem, cost/tax benefit tax advances, free trade zones, exchange rate shifts.

• Key decision: facility, location, production, allocation, product distribution, supplier dev

global SC strageties:

• off shoring: outsourcing to another country for cost, quality, or tech advantage

• post ponement: delay final prod/custo until actual demo is known(country specific features)

Multinational service op considered:

• cultral transfer:

  • adapting services culturally (e.g stronger coffee in europe)

• Network development: growing with global development (eg cc networks)

• Gov’t poli: regulatory restrict (eg. foreign firms insurance ban)