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Grading: Relative
Assignments: Quiz/Case discussion/Tutorial 15%
Test 1 15%
Test 2 20%
End Exam 50%
Session for the Week I
Text Books
Upstream
Downstream
The right
Product
+ The right
Price
+ +
The right
Store
The right
Quantity
+ The right
Customer
+ The right
Time
= Higher
Profits
Example of a Supply Chain?
Customer wants
P&G or other Third detergent
Supermarket
manufacturer party DC and goes
to Supermarket
Chemical
Plastic Tenneco
manufacturer
Producer Packaging
(e.g. Oil Company)
1-17
The Supply Chain
18
Suppliers Manufacturers Warehouses & Customers
Distribution Centers
Transportation Transportation
Costs Costs
Material Costs Transportation
Manufacturing Costs Inventory Costs Costs
The Supply Chain Another View
19
Transportation Transportation
Material Costs Costs Costs Transportation
Manufacturing Costs Inventory Costs Costs
Ancient Times The first supply chain was the barter system
1-30
The Objective of a Supply Chain
STRATEGIC
TACTICAL
OPERATIONAL
Planning decisions:
Which markets will be supplied from which locations
Inventory policies
8,9 Competitive and supply chain strategies customer service and cost
trade offs,Achieving strategic fit,
10 Supply chain performance measures enhancing supply chain
performance
11 Supply chain drivers framework for structuring drivers,
Session for the Week III
Outline
Transformation
Process
Manufacturing operations
Inputs Outputs
Materials Tangible goods
People Fulfilled requests
Equipment Service operations Information
Intangible needs Satisfied Customers
Information
A round watermelon needs lot of room in a refrigerator and the usually round
fruit often sits awkwardly on refrigerator shelves. Smart Japanese Farmers have
forced their watermelons to grow into a square-shape by inserting the melons
into square, tempered glass cases while the fruit is still growing on the vine.
Cuboid Watermelon
Cross-Functional Linkages
Finance MIS
Budgeting.
What IT solutions Human
to make it all work
Analysis.
together? Resources
Funds. Skills? Training?
# of Employees?
Design Operations and
Sustainability. Supply Chain
Quality.
Manufacturability.
Marketing
What products?
Accounting What volumes?
Performance measurement systems. Costs? Quality?
Planning and control. Delivery?
Supply chain flows
Material flow
Information flow
Fund flow
Chocolate Supply Chain
Printed
Wheat Flour Aluminium Fiberboard
materials
Multiple
Praline Wafers retailers
Confectionery End
Chocolate Packing Wholesalers
manufacturer customers
Others
(hospital etc.)
1-52
Customer could be an internal
customer or an external customer
Customer
Customer Order Cycle
Retailer
Replenishment Cycle
Distributer
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier
Cycle I
Supplier
Manufacturer
Customer
Retailer Distributor
Cycle III
Customer
Order Arrives
Push View of SCM
A push-based SCM takes longer to react to the
changing market place
In a push-based supply chain, production decisions
are usually based on long-term forecasts
62
Supply Chain Integration Pull Strategies
63
Supply Chain Integration Push/Pull Strategies
Automobile?
Industries where: Industries where:
Aircraft?
Uncertainty is low Demand is stable Fashion?
Low economies of scale Scale economies are High Petroleum refining?
Push-pull supply chain
Pharmaceuticals?
Biotechnology?
Books, CDs Grocery, Medical Devices?
Beverages
Push Low
Low Economies of Scale High
Pull Push
Source: Simchi-Levi
66
Characteristics of Push, Pull and Push/Pull Strategies
PUSH PULL
Objective Maximize
Minimize Cost
service level
Complexity
High Low
Focus Resource Responsiveness
Allocation
Lead Time
Long Short
Processes
Supply Chain Order
Planning Fulfillment
Source: Simchi-Levi
67
Supply Chain Macro Processes in a Firm
Production Schedule
Scheduling on Finished Goods
Vehicle Routing
Machines Inventory
Workload Balancing