UOL IS3167: C7 Supply Chain Management Part 1 – Flashcards
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Supply Chain
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It is the flow of info, materials, goods & services from raw material supplier through manufacturers & warehouses to the consumer
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Traditional Supply chain
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Tier 2 supplier(materials)-Tier 1 supplier(manufacturing)-Warehouses-Retail
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Upstream
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Refers to transactions between an organization & its suppliers & intermediaries
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Downstream
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Refers to transactions between an organization & its customers
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Supply Chain Management
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Involves the efficient management of materials & info across the supply chain from raw materials, 1st & 2nd tier suppliers to customers
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SCM (Park et al)
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Is a key factor for enhancing organizational effectiveness and competitiveness
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Pressures to improve SCM
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1 Availability of global sourcing 2 Pressure to reduce supply chain costs 3 SCM is now extended beyond manufacturing and into services 4 Customer expectation increasingly demanding
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Lean supply chain
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Lean implies a team-based approach to continous improvement focused on eliminating non-value added activities or "waste"
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Business Process Outsourcing
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Outsourcing of operations & responsibilities of business functions to 3rd parties
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Key Issues of Supply Chain Management
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Speed, reliability, control, flexibility to change, cost, quality, minimization of inventory
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Problems with traditional supply chain
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1 Slow Response time 2 Excessive stock due to need for safety 3 Poor coordination and customer service 4 Encounters shrinkage
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Processes in SCM
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Production Planning Inventory Mgmt Distribution Mgmt Order processing Procurement
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Bullwhip effect
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Arises when business, particularly retailer, overestimate customer demand for products which have high demand U.
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Demand Uncertainty (Stable, Predictable)
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Functional products with long PLC Tend to have low margin, obsolescence E.g. groceries, oil, basic apparel
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Demand Uncertainty (High)
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Innovative products with short PLC Tend to have high margins, obsolescence E.g. Computers, fashion, pop music
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Supply Uncertainty
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Refers to stability of supply and is affected by e.g. weather, natural disasters, economics, politics
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Stable Supply (Oil, Processed Food)
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Mature & flexible manufacturing processes, technologies, many or reliable source of raw material
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Evolving & uncertain supply (Wind power)
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Dependent on weather, inflexible manufacturing processes, little or unreliable source of raw materials
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Reducing Uncertainty with ICT
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Share demand information and synchronize planning across the supply chain
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Reducing Demand Uncertainty with ICT
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Sharing demand info with suppliers; Establish collaborative replenishment between partners
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Reduce Supply Uncertainty with ICT
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Plan and collaboratively design with suppliers to reduce risk at every stage of PLC (suppliers amp up at early PLC stage and vice versa) E.g PC
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E-SCM Technologies
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e-ERP EDI RFID Rubee
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Uses of E-SCM
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Reduce order-delivery time Reduce cost of manufacturing Improve demand forecasting Manage inventory more effectively
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SCM Technologies
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Enhance connectivity, integration and coordination
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SCM Strategies (Lee 2002)
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Efficient supply chain Risk Hedging supply chain Responsive supply chain Agile supply chain
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Efficient supply chain
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Low DU Low SU Pursue Economies of scale
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Risk Hedging supply chain
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Low DU, Hi SU Pool and share high-risk resources with other Co. Maintain multiple suppliers
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Responsive supply chain
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Hi DU, Low SU Be flexible to respond to sudden changes Integrate mass-customization, Build 2 order processes
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Agile supply chain
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Hi DU, Hi SU Combine risk hedging and responsive strategies
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Push SC Model
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Manufacturers first develop products which they then try to market
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Push Model Aim
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Optimize the production process for cost and efficiency
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Push Model Goal
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Seek to control and dominate supply chain esp. in markets that have little competition
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Pull SC Model
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Manufacturers focus on customer need, incorporating requirements into product development and distribution
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Pull Model Aim
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Geared towards delivering value to customers through reduced costs and improved service quality. Value-Chain Model
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Push vs Pull
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Push based on forecast demand Pull based on actual demand Many modern supply chains use a combination
