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Chapter 11 Supply Chain Management

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Definition, issues, logistics, EDI, E-commerce, purchasing, make ... CompUSA. You or me. Rev. 10/28/01. SJSU Bus 140 - David Bentley. 4. Factors Leading to SCM ... – PowerPoint PPT presentation

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Title: Chapter 11 Supply Chain Management


1
Chapter 11 Supply Chain Management
  • Definition, issues, logistics, EDI, E-commerce,
    purchasing, make or buy, DRP

2
Definition of SCM
  • Definition chain consisting of multiple
    organizations and organization units operating as
    customer/supplier links
  • Includes external suppliers and subcontractors
  • Involves internal manufacturing plants,
    warehouses, and distribution centers
  • Extends to final (external) customers

3
Supply Chain Example
  • Contract manufacturer
  • Hewlett-Packard
  • Ingram Micro
  • CompUSA
  • You or me

4
Factors Leading to SCM
  • Globalization
  • Competitive pressure
  • Move to e-commerce
  • Cost reduction opportunities
  • Ability to share information
  • Greater use of contract manufacturers
  • Desire to manage vertical markets

5
Key Elements of SCM
  • Determine customer needs
  • Forecast demand
  • Design products to meet customer needs and
    minimize costs
  • Control operations processes
  • Minimize inventory
  • Strengthen supplier relationships
  • Optimize facility location
  • Improve handling and storage of material

6
SCM Issues
  • Strategic
  • Building the chain (suppliers, manufacturing
    facilities, distribution centers, customers)
  • Establishing partnerships
  • Tactical
  • Inventory, procurement, logistics, quality
    policies
  • Operational
  • Production and inventory planning and control
  • Outsourcing
  • Quality control

7
Integration
  • Horizontal Integration
  • Acquisition of complementary product lines
  • Example HP and Compaq
  • Vertical Integration
  • Backward integration (upstream)
  • Control of supply
  • Example Ford
  • Forward integration (downstream)
  • Control of customers
  • Example Apple

8
Focused Factories
  • Focused factories
  • Emphasis on niche, distinctive competency
  • Limited products and functions
  • Example HP casting plant
  • HP Carly Fiorina comments (SJMN 10/24/02)
  • in contrast to IBM, HP is not going to be a
    vertically integrated company
  • Focus less and less on component-level innovation
  • Work with key partners (e.g., Intel and Canon)
  • Position itself as broad-based technology company

9
Logistics
  • Managing movement of materials within the supply
    chain
  • Traffic management
  • Scheduling, carrier selection, rate and tariff
    management
  • Electronic Data Interchange (EDI)
  • Internet (B2B, exchanges)
  • Distribution Requirements Planning (DRP)
  • JIT deliveries

10
Communications
  • Traditional
  • Mail, Phone, Fax
  • EDI
  • Transmission of forecasts, orders, etc.
  • Individual supplier/customer agreements
  • Internet (E-Commerce)
  • Buying and selling using the Internet
  • Business-to-business, business-to-consumer
  • Exchanges

11
Creating an Effective Supply Chain
  • Key is external and internal partnerships
  • Steps
  • Strategic objectives and tactics
  • Integrate internal part first
  • Extend to suppliers and customers
  • Optimize data management across chain
  • Develop strategic partnerships

12
SCM Software Vendors
  • Supply Chain Management (SCM)
  • SAP
  • Oracle
  • I2 Technologies
  • Manugistics

13
Internet Applications (B2B)
  • Ariba (Sunnyvale)
  • BEA (San Jose)
  • Siebel (San Mateo)
  • (acquired by Oracle 06/01/06) (Redwood Shores)
  • BroadVision (Redwood City)
  • Many others

14
Internet Applications (B2C)
  • Oracle (Redwood Shores)
  • Including Siebel (San Mateo)
  • Acquired by Oracle 06/01/06)
  • BroadVision (Redwood City)
  • Many others

15
Purchasing - 1
  • Purchasing activities and interfaces
  • Purchasing cycle
  • Requisition from user or inventory control
  • Supplier selection
  • Order placement
  • Order monitoring and follow-up
  • Order receipt
  • Outsourcing
  • Contract manufacturers

16
Purchasing - 2
  • JIT purchasing
  • Fewer suppliers
  • More contracts
  • Traditional vs. partnership relationships
  • Supplier selection
  • Supplier audits and certification

17
Supplier Relationships 1Source Schonberger
Knod, Operations Management, Fourth Edition, 1991
18
Supplier Relationships 2Source Schonberger
Knod, Operations Management, Fourth Edition, 1991
19
Purchasing - 3
  • Supply Chain Tools
  • Bar coding
  • EDI (Electronic Data Interchange)
  • RFID (Radio Frequency Identification)
  • E-commerce

20
Purchasing - 4
  • Make or buy (breakeven analysis)
  • QBEP FC / (p v)
  • Distribution requirements planning (DRP)
  • Aggregate requirements from stores
  • Assign through warehouses to factories

21
E-Commerce Areas
  • CRM - Oracle (including Seibel), BroadVision
  • B2B - SAP, Oracle
  • B2C - BroadVision
  • SCM - SAP, i2
  • E-Procurement - SAP, Ariba
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