GIMS - Logistics and SCM - Personal Master File

GIMS Logistics and Supply Chain Management Personal Master File
Logistics and Supply Chain Management

GIMS
Personal Master File from ..
Summer Term 2012
Prof. Dr. Willi Darr Hof, Summer Term 2012
Content:
A - Introduction B - Fundamentals C - Top Agenda D - Methods E F G H I J K L
Content A: Introduction
Topics 1 Supply Chain 2 Importance of SCM 3 Attention: Risks in the Supply Chain 5 Lernziele und Lernplan
Explanation 1.Supply Chain: This chain involves the Supplier, Industry, Logistic service provider, Whole saler, Retailer Consumer and Recycling. 2. Importance of Supply Chain: Helps to improve to improve the GNP, Export/Import and also helps to provide jobs.
Impact to India
Companies in a developing country like India are slowly realizing the importance of SCM so in turn it helps in developing the economy of the country.
3.Risks in the the supply chain: Supply chain can be affected by natural disasters, accidents, piracy and also the share market.
In India the current infrastructure cant handle burgeoening traffic and is prone to accidents. Natural disasters like floods and the tsunami in 2004 affect SCM in the country.The indian ocean is also prone to pirate attacks.
Lernziele zu SCM: Learning targets through SCM are Knowledge, Analytical Skills, Social skills and Personal skills
As a developing nation India must look to improve the 4 skills in order to improve SCM capabilities
Click to edit the outline text format
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Outline Level Fifth Outline Level
My Learnings 1 SCM plays an important role in distribution of products to consumers. 2 SCM boosts customer service, reduce operational cost and improve financial position (company and Country). 3 Natural disasters can affect SCM. 4 Leaning targets helps a company improve in SCM
Content
Practical Experience 1 Tomato distribution 2 Maufacturing of Adidas ball and the manufacturing of Apple products in China 3 Tornados in the U.S. and tsunami in Japan. . 4 Many companies in India like L&T are developing in SCM through these learning targets.
Content B: Fundamentals
Topics Basics to Supply Chain Management (SCM) a. Object of Supply Chains and of SCM b. The seven lines of vision of Supply Chains c. Interdependences of Supply Chains i. Serials interdependences ii. Bundled/ Pooled interdependences iii. Reciprocal interdependences
Content B: Fundamentals
Explanation 1Definition of Logistics:Logistic as a system of transfer, contains the coordination,
implementation and control, of all resources and activities, determining the flow of transaction objects between the point of origin (source) and a defined destination (valley). 2 Definition of SCM: design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand,and measuring performance globally.
Explanation
Impact to India
Management approaches of SCM: 1 Value orientation: Accounting the relevant factors essential for increasing the turnover, reducing their process cost and minimizing the asset base. 2 Customer orientation: All activities within the scope of the business processes are guided by costumers and market conditions. 3 Flow orientation: Striving for continuous, justintime handling of all processes activities without standby time.
1 Companies in a developing country like India who are following this strategy tend to minimize their costs and asset base.
Second Outline Level 2 Companies in India who have followed this

strategy in the face of heavy competition from competitors have outpaced their competitors.
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3 Automobile companies in India like TATA and M & M who follow this strategy tend to see more profits
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Holistic orientation: Functional and organizational overlapping development from customers demand to the payment created through the integration of business aims and strategies.
Many automobile companies in India who follow this approach tend to be more efficient and successful.
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First line of view-Logistics as space/ time transfer/ bridging: Logistics comprises the physical time and space bridging (TUL process). Infrastructure and processes. Transport and Warehouse. Second line of view- Order Cycles Consists of both logistics and purchase organization or process. Purchase process releases flow of goods Purchase processes are fixed items in material logistics Endpoint is the surrender to the customer. Third line of view-OPP The Order Penetration Point separates the forecast which is oriented from value added activities The OPP separates the supply chain from raw material to consumer in several parts
Learning's
a.T= Transport, U= separation, L= Warehouse. This involves space and time transfer between the first raw material producer to the end consumer
Second Outline b. Order cycles are present between every Level supplier and customer in every tier. The
objective is to have bigger order cycles in order to reduce time and cost for the customer
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c. Analyzing the OPP we get information about the company and also the supplier and customer By reducing OPP 1.One can reduce OPP 2.Reduce stocks 3. 11 Forecasting department
Sixth line of view- Supply Chain structure Vertical range of manufacture of a company and. Scale of specialization in complete supply chain.
Learning Click to edit the Ford text the first example outline model isformat
Second Outline Japanese started with the Level policy or Just in Time KANBAN
Just in Time policy offers the following advantages 1.No stock in the warehouse for a long time. It can be used for other purposes. 2.Enough stock only when it is needed by the customer 3.In the end it saves money and space for the company
for vertical range of manufacturing.
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Seventh Line of view
Learning:
Strategies are given by the boss Tactics are handled by the middle men Logistics and transport are handled by the operational sector
Second Outline Reasons for hierarchy Level Relevance for the whole company
(success, risk). Planning horizons. Planning dates and aggregation. Decision maker and management levels
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Interdependencies Serial Interdependencies The output of the delivery step is the input of the customer step Pooled interdependencies Use of mutual resources. Use of central warehouse, the same purchase organization, the same delivery tour etc. Cost effective and competitive. Reciprocal interdependencies The respective output of an decision is the input of the respective others in the supply chain.
Learning In serial production the outcome of one company in Tier 1(product) is the input for the OEM
Second Outline Warehouses are perfect examples for this. They use 90-95% of the Level
warehouse at any given time must be utilized. is only possible through It pooled interdependencies
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Transport and warehousing .Each is dependent on the other.
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Content C: Top Agenda

Topics 1 Value added per vehicle replaces volume growth 2 OEM concentration results in 8 global purchasing hubs and triggers suppliers globalization 3 Increasing platforms and model varieties require advanced deal and project management capabilities 4 Tier-1 supplier stake an increasing share of risk from the OEMs 5 Suppliers take over the system integration responsibility and management of the supply chain 6 Electronics B2B commerce revolutinizes the supply chain and triggers industry shakeout 7 The electronics revolution changes the rules of the game 8 Suppliers establishes closer links to consumers 9 30-50 mega suppliers will lead the supplier pyramid and set the performance standards
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Content C: Top Agenda

Explanation Value added per vehicle replaces volume growth a. Growth in production of light vehicles in markets like USA,Western Europe and Japan is expected to stagnate. b. Markets like India and China are showing a strong growth rate in vehicle production. c. Suppliers can also grow by innovating,diversifying, outsourcing of system and modules and by expanding in existing markets but they have to overcome the challenges. a. More car per car Impact to India a. Automobile sales in India is increasing every year and to cater to this demand automobile companies are setting up their factories in India. Global automobile majors are setting up factories in India and so must suppliers of these automobile companies Since these suppliers need to maintain a good customer relationship they will also want to be close to their customers and it will also be cost effective
b.
c.
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OEM concentration results in 8 global purchasing hubs and triggers suppliers globalization
By 2010 there will be only 8 major independent OEMs The minimum number of cars needed to be sold should be 2.8 million in order to survive Each OEM will source an average volume of US $100 bn per year. Global players will more and more dominate the supplier industry OEMs believe this trend to happen faster than the suppliers do
Click to India the to edit Impact outline text format Suppliers in India who are
looking to get a slice of US $100 bn must go to were the OEMs are located but ,since the OEMs themselves are coming to India, suppliers in India have a great chance to improve their business opportunities If Indian suppliers become global players they can dominate the supplier industry
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3.Increasing platforms and model varieties require advanced deal and project management capabilities
Click to edit the Suppliers in India must outline text formatchange
Impact on India
The share of platform-based cars is expected to grow as well as the variety of models It is expected to rise from 65% in 1999 to 82 % in 2010 Model related projects are expected to rise.This will cause the increase of complexity and number of projects Small number of large platform deals.Sharp reduction in number of deals and increases scale and global delivery requirement. Top-suppliers need to fine-tune their processes, structures and strategies to achieve profitable system business growth
Their process, structure and strategies in order to attract the OEMs
Suppliers in India must be able to handle the complexity of the project.
Third Outline Level
Suppliers in India must be able to deliver their products on time for they cannot afford to lose their customers
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4.Tier-1 supplier stake an increasing share of risk from the OEMs Cost pressure on tier-1 suppliers will increasingly be complemented by risk sharing Sharing of risk with the OEM tends to increase profits for the supplier.
Impact on India
Click to edit the Suppliers in India who do a bit of R & D outline their customers with new and text format and help
innovative products tend to see more profits.
Second Outline Suppliers in India must be willing to take Level

more risks in order to earn a good profit.
5 .Suppliers take over the system integration responsibility and management of the supply chain OEMs will continue to reduce their value added by shifting system/module integration and supply to their tier-1s. OEMs follow various innovative approaches to strengthen the partnership with their suppliers. The integration of suppliers into the development process and extension of systems contents
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Suppliers in India have the opportunity now to add value to the customers product and thereby benefit from it. More contribution means more recognition by the end consumer and OEM.
Third Outline Level
6.Electronics B2B commerce revolutionizes the supply chain and triggers industry shakeout. All OEMs are currently moving towards an internet-based platform for their supplier relationships. In the mid-term, B2B has the potential to bring revolutionary changes to the industry - far beyond the simple reduction of purchasing prices The majority of suppliers today is only reacting - however, early action is key to success in automotive B2B
Click to edit the outline text software firms in India format Opportunities for
to provide safe and secure platform for the companies to interact on the internet. Easier for Indian suppliers to communicate to OEMs located abroad
Impact to India
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7.The electronics revolution changes the rules of the game: 1 The electronics revolution in the automotive industry takes place in 4 levels Surge in electronic innovations in the car. Networking and integration of electronics. Networking of vehicles with environment telematic applications. Automotive embedded mobile computing.
Impact on India
Medium sized electronic companies in India have a good chance of being suppliers to these OEMs . Companies who have good products to offer to these companies have chances of being there long term suppliers. Since importance and value of these electronic components is expected to increases the suppliers will have chance to get more profits in the future
2 90% of all future innovations will be driven by electronics.
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Fourth
3.Electronics is expected to take an increasing share of a vehicles production cost.

4. Relative importance and value of components undergo dramatic change
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Electronic subsystems will be more and more integrated the road is heading towards the ,,Auto PC Telematics is a trigger technology that will shape the direction of the industry IT, software, telecom and media companies will try to capture the market to provide solutions for the suppliers regarding telematics. The automobile will become an integrated part of information, messaging and transaction services.
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8.Suppliers establishes closer links to consumers
Suppliers are looking for more recognition among the end customers. They are looking to add their brand names to the parts of the cars so that the end consumer knows about the brand.
Click to edit the Suppliers in India have the chance to outline text formatknown. make their brands globally
Suppliers can look to enter the after market by introducing new products
Impact to India
Suppliers looks to intoduce a second brand for the aftermarket.
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9.30-50 mega suppliers will lead the supplier pyramid and set the performance standards
Impact to India
Click to edit the Better integration format outline text of the industry Second Outline Level
Number of top suppliers per module have reduced. Number of module per vehicle also have reduced. Integration of the system leaders.
Increased revenue High reliability Small scale industries will be affected
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Content D
Topics 1 Requirement of Methods 2 Material flow /Process Analysis 3 Activity Based Costing 4 Target Costing
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Explanation 1 Why we need methods? We need methods to improve the effeciency and effectiveness of the product .Hence it helps to reduce the complexity. It is also used to define and replicate the process 2 Material flow analysis Area system boundaries: Which supply network and hub are vital to consider suppliermanufacturer-trader It involves the flow of good and information. Timeline: day- week - month year Average flow of information Transport and storage
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Processing time and waiting time
Activity Based Costing: Defining the process, main process and process areas. Cost driver Plan costing for every process Calculation for plan-volume Remaining cost as surcharge cost. Target Costing:
Click to edit the Learning: Activity costing: outline in basedformat text management Helps Better
Second Outline Helps to identify inefficient departments, Level products and activities Third Outline Level Target Costing:
Helps to control costs
The main purpose of this is to control and reduce costs in order to get more profit.
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Fourth Outline Level Fifth Decisions taken at the beginning Outline Level
a cost management tool for reducing the overall cost of a product over its entire lifecycle with the help of production, engineering, research and design The basic steps involved: 1. Define the product 2. Set the price and cost targets 3. Achieve the targets 4. Maintain competitive costs Allowable costs= Target Price- Target costs
Is said to affect the final cost price 1. The number of different components 2. Whether the components are standard or not. 3. Materials used in the product.
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Value creation in Supply Chain
1.Overview over the value creation decisions 2.MakeorBuyDecision 3.Core competencies of a company 4.Describing of business models 5.Postponement/ Speculation in the Supply Chain a. Manufacturing and Logistics Postponement b. Frame conditions as basis of decisionmaking
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Explanation Value added
Learning

Click to the supply chain adds value Each player in edit the from the raw materail producer to the trader adds value to text format outline the product.
The customer is dependant on the trader and the trader is dependant on the OEM and the OEM on the supplier
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Explanation Added value strategies Make or Buy:
Learning
This is a major decision a company has to make,whether the outsource a service or component to another company.
Make buy decision Clickorto editthe of a company is based on whether the company is confident outlineenough ora has enoughservice the text format time and resources to make product or
If the company sees if it is cost effective Second Outline

and saves time for the company,the company will outsource the product or service.
customer.
Reasons for outsourcing
Level
Higher concentration on the own core competencies Shortage / lack of Knowhow or qualified labour Higher and better performance Optimal scaling of production Cost efficiency / cost reduction through less Total Cost of Ownership places and data
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The present trend in major OEM's is that they outsource majority of their components and services to the suppliers
Third Outline Level
Prof. Dr. Willi Darr Mobility of working Hof, Summer Term 2012
Mobility of working places and data
Fourth Outline Level eg. Automobile industry (BMW) Fifth Outline Level
Than they would do earlier.Only 20% of the work is done by the OEM's in the autombile industry
Explanation Transaction Cost Theory:
Learning
Founded by willamson and further developed by Jarillo and Ouchi. It involves the terms IC(Internal cost) and External cost (EC) Keynote of comparison of costs: 1. Intern costs (IC) 2. Extern costs (EC) = Ext. Price (EP) + TAK (TC)
Click to edit the eg.Buying a store; outlinethespatulaformat will be text from acosts to purchase spatula, The
Second Outline also the energy and effort it requires to
find out which of the various spatula products you prefer.
Transaction cost is a cost incurred in making an economic exchange
not only the price of the spatula itself, but
Level
This theory is required when the borders between companies vanishes (when transactions between companies increases)
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Fourth
Comparison: EP + TC > IC , i.e. integrate Comparison: EP + TC < IC , i.e. additional purchasing
Ouchi and Jarillo have extended the alternatives market or

Hof, Summer Term 2012 32
Prof. Dr. hierarchy :Willi Darr
Market: Market and strategic network
In a market people involved deal on the basis of spot prices. Beauraucracy involves employment contracts and internal organization. Clans involves long term relationships without concrete contracts and formal organization. Strategic network involves spcial long term privity of contracts to indepentant partners.
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Explanation
Learning

Heterarchy or Hierarchy
Heterarchy better the Click tois editthan hierarchy and because there is also a discussion feedback outline text format Transaction costs are lower
Second Outline Level Changes when required can also be
Ideas are generated faster implemented faster
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Explanation Core competencies:
Learning:
Click to edit the Every company must outlinecompetenciesbe awareto text format of its core in order
survive in the global environment..
Second Outline of Knowing the core competencies a company can help save Level resources, manpower and money
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Explanation
Learning
A company must know to value its
Click to edit the outline text format A company must protect itself from
customer
imitation by competitors eg. Zara supply chain
Second Outline A company must have products which can Level be easily differentiable.
A company must diversify into new markets when there is a huge potential eg.Apple with the iPhone
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Postponement/Speculation in the added value Postponement:
Learning:
Postponement of the customer related added value processes in of in direction Raw material/downwards in the SC Grundgedanke: avoiding of risks in the case of false costumer prognosis Seperation point between postponement and speculation is called Added value: Production (materiell) and logistics (room/temporaly)
If the product value is big eg. Porsche car then the company has to postpone its decision as late as possible on how many porsche cayenne cars needs to be produced depending on external and internal factors.
Second Outline If the value of the product is less Level
eg.candythen the company can offerd to speculate.Sine there will not be a significant loss for the company even if there is no strong demand for the product
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Explanation: Speculation: (Opposide of PostponementStrategie)
Speculation of the costumer expectations Risk of a false customer assess.
Click to edit the outline text format Second Outline Level
Fundamental question: Use of cost and time advantage Nutzen von Kosten und
Time advantage in the added value
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GIMS Logistics and Supply Chain Management Personal Master File

Logistics and Supply Chain Management

Personal Master File from ..

Summer Term 2012

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Click to edit the outline text format

Second Outline Level

Third Outline Level

Prof. Dr. Willi Darr Hof, Summer Term 2012

Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Click to edit the outline text format

Second Outline Level 2 Companies in India who have followed this

Third Outline Level

Prof. Dr. Willi Darr Hof, Summer Term 2012

Fourth Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

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Second Outline Level

Third Outline Level

Prof. Dr. Willi Darr Hof, Summer Term 2012

Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

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Third Outline Level

Fourth Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

for vertical range of manufacturing.

Third Outline Level

Prof. Dr. Willi Darr Hof, Summer Term 2012

Fourth Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

Seventh Line of view

Click to edit the outline text format

Third Outline Level

Prof. Dr. Willi Darr Hof, Summer Term 2012

Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

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Third Outline Level

Transport and warehousing .Each is dependent on the other.

Fourth Outline Level Fifth Outline Level

GIMS Logistics and Supply Chain Management Personal Master File

Content C: Top Agenda

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Content C: Top Agenda

Prof. Dr. Willi Darr Hof, Summer Term 2012

GIMS Logistics and Supply Chain Management Personal Master File

Second Outline Level