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Management
Supply Chain Management
(SCM)
Chapter 11
Transparency Masters
11-1
What is SCM ?
Transparency Masters
11-2
11-3
SCM Configuration ?
Transparency Masters
11-4
Supply Chain
Transparency Masters
11-5
The Supply-Chain
VISA
Material Flow
Supplier
Credit Flow
Manufacturing
Supplier
Schedules
Transparency Masters
Order
Flow
11-6
Retailer
Consumer
Wholesaler
Retailer
Cash
Flow
Supplier
Inventory
Supplier
Customer
Customer
Manufacturer
Inventory
Supplier
Inventory
Distributor
Customer
Inventory
Transparency Masters
11-7
Source: U of Maryland
Inventory
Transportation
Supplier
Product
Customer
Funds
Transparency Masters
11-9
Why SCM ?
Transparency Masters
11-10
Transparency Masters
11-11
Supplier
Operation
marketing
financial
Consumer
financial
Consumer
Company A
Supplier
Operation
marketing
Company B
Transparency Masters
11-12
Supplier
Operation
marketing
financial
Consumer
Supply Chain A
Supplier
Operation
marketing
financial
Consumer
Supply Chain B
Transparency Masters
11-13
Volkswagen
Company profile
Transparency Masters
11-14
Volkswagen
Brazilian plant employs 1000 workers
11-15
Volkswagen
Unusual elements:
Transparency Masters
11-16
Theoretical Background
Transparency Masters
11-17
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Product Properties?
Transparency Masters
11-22
Transparency Masters
11-23
FARMER
(supplier)
delivering
RETAILER
consumer
flowering
harvesting
Transparency Masters
11-24
Transparency Masters
11-25
Medan
Airport
Medan
Port
Surabaya
Airport
Surabaya
Farmland
Surabaya
Port
Medan
Market
Padang
Airport
Padang
Port
Padang
Market
,
Palembang
Airport
Palembang
Market
Palembang
Port
Transparency Masters
11-27
Movie clip
11-28
Transparency Masters
11-29
Response
Suppliers
goal
Supply demand
at lowest
possible cost
Respond
quickly to
changing
requirements
and demand to
minimize
stockouts
Share market
research; jointly
develop
products and
options
Primary
Selection
Criteria
Select
primarily for
cost
Select
primarily for
capacity,
speed, and
flexibility
Select primarily
for product
development
skills
Transparency Masters
11-30
Differentiation
Response
Differentiation
Process
Characteristics
Maintain high
average
utilization
Invest in
excess
capacity and
flexible
processes
Modular
processes that
lend themselves
to mass
customization
Inventory
Characteristics
Minimize
inventory
throughout the
chain to hold
down costs
Develop
responsive
system, with
buffer stocks
positioned to
ensure supply
Minimize
inventory in the
chain to avoid
obsolescence
Transparency Masters
11-31
Response
Differentiation
Lead-time
Characteristics
Invest
aggressively to
reduce
production
lead-time
Invest
aggressively to
reduce
development
lead-time
Product-design
Characteristics
Maximize
performance
and minimize
cost
Use product
designs that
lead to low setup time and
rapid production
ramp-up
Use modular
design to
postpone
product
differentiation for
as long as
possible
Transparency Masters
11-32
Sourcing Function
Perform in-house (Making/ In-sourcing)
or
Outsourcing (Purchasing)
Transparency Masters
11-33
Make/Buy Considerations
Reasons for Making
1. Maintain core competencies
and protect personnel from
layoff
2. Lower production cost
3. Unsuitable suppliers
4. Assure adequate supply
5. Utilize surplus labor and
make a marginal
contribution
Transparency Masters
11-34
11-35
Supply-Chain Strategies
Strategic options
Many suppliers
Few suppliers
Keiretsu network
Vertical integration
Plan
Transparency Masters
11-36
Supply-Chain Strategies
Negotiate with many suppliers; play one supplier against
another
Develop long-term partnering arrangements with a few
suppliers who will work with you to satisfy the end
customer
Vertically integrate; buy the actual supplier
Keiretsu - have your suppliers become part of a company
coalition
Transparency Masters
11-37
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11-38
Transparency Masters
11-39
1995
Corel
Corp.
Setup operations
Buy supplier
Raw Material
(Suppliers)
Backward
Integration
Current
Transformation
Forward
Integration
Finished Goods
(Customers)
Transparency Masters
11-40
Silicon
Steel
Automobiles
Farming
Raw Material
(Suppliers)
Flour Milling
Backward
Integration
Current
Transformation
Integrated
Circuits
Forward
Integration
Distribution
Circuit Boards
System
Dealers
Computers
Watches
Calculators
Transparency Masters
Baked Goods
11-41
Finished Goods
(Customers)
Transparency Masters
11-42
Successful Supply-Chain
Management Requires:
A mutual agreement on goals
Trust
Compatible Inter-organizational cultures
Transparency Masters
11-43
Transparency Masters
11-44
Bullwhip Effect
Design for Logistics
(postponement)
11-45
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Printer
Europe
Asia
Board
Europe
Printer
Europe
Customers
(Europe)
Customers
(Europe)
Housing
Asia
Transparency Masters
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Re-sequencing
Modifying the order of product manufacturing
steps so that those operations that result in the
differentiation of specific items or products are
postponed as much as possible.
Ex:Benetton Corporation
Transparency Masters
11-57
Before
Acquiring yarn
Acquiring yarn
Dyeing
Manufacturing
garment parts
Manufacturing
garment parts
Sweater completely
assembled
Sweater completely
assembled
Transparency Masters
Dyeing
11-58
How It Works
Readers communicate via 802.11b to access point and onto network.
or
Tagged assets /
items read at
designated
frequency
Data sent to
business
applications
Transparency Masters
11-59
An n-tier Supply
Chain
Manufacturing
Stock
Ship
Manufacturers
DC
Wholesale DC
Retail DC
Get video
Transparency Masters
11-60
Retailer
2004 by Prentice
Hall,
Transparency Masters
11-61
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11-62
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11-63
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11-64
Transparency Masters
11-65
Thank you
Transparency Masters
11-66
11-67
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11-70