SUPPLY CHAIN MANAGEMENT

What it Supply Chain?

A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request.  It includes Manufacturer and suppliers, transporters, warehouses, retailers and customers.  Within each company, the supply chain includes all functions involved in fulfilling a customer request (product development, marketing, operations, distribution, finance, customer service)


What it Supply Chain?

Customer is an integral part of the supply chain  Includes movement of products from suppliers to manufacturers to distributors, but also includes movement of information, funds, and products in both directions  Probably more accurate to use the term supply network or supply web  Typical supply chain stages: customers, retailers, distributors, manufacturers, suppliers


Supplier

Manufacturer

Distributor

Retailer

Customer

Supplier

Manufacturer

Distributor

Retailer

Customer

Supplier

Manufacturer

Distributor

Retailer

Customer

Supply Chain Stages

Supply Chain Stages

Each stages in a supply chain is connected through the flow of products, information and funds.  These flows often occur in both directions  Depends upon customer needs


Objectives of Supply Chain

Maximise the overall value of the product  Maximise Supply Chain Profitability/supply chain surplus  Flow of information and funds  Effective Supply Chain Management Management of supply chain assets, product, information and fund flow


Importance of Supply Chain Decisions

Supply Chain Flow product, information and funds  Supply Chain design, planning and operation decisions play a significant role in the success or failure of a firm.


Decision Phases in a Supply chain



Supply Chain Strategy or Design

Marketing and pricing plans for a product Structuring the supply chain for several years In-House or Outsource Decides the SC Configuration

Supply Chain Planning

Planning for quarter year to a year Forecasting

Supply Chain Operation

Weekly or daily operation Individual customer orders

Process Views of Supply Chain



Cycle View
The processes in a supply chain are divided into a series of cycles, each performed at the interface between two successive stages of a supply chain

Push/Pull View
Pull processes are initiated by a customer order Push processes are initiated and performed in anticipation of customer orders.

Cycle View of Supply Chain Processes

Customer order cycle  Replenishment Cycle  Manufacturing Cycle  Procurement Cycle


Cycle View of Supply Chain Processes Customer

Customer Order Cycle Retailer Replenishment Cycle Distributor Manufacturing Cycle Manufacturer Procurement Cycle Supplier

Sub Process
Supplier Stage Market Product

Buyer returns reverse flows to supplier or third party

Buyer Stage Places Order

Buyer Stage receives supply

Supplier Stage receives order

Supplier Stage supplies order

Push /Pull view of supply chain processes



Pull Process
With Pull Process, execution is initiated in response to a customer order Also referred to as Reactive Processes This process operate in an environment in which customer demand is known

Push /Pull view of supply chain processes



Push Process
Execution is initiated in anticipation of customer orders Demand is not known and must be forecast Also known as Speculative Processes

Push /Pull view of supply chain processes

Push/pull Boundary

Push Processes
Process 1 Process 2 Process 3 Process 4

Pull Processes
Process 5 Process 6 Process 7

Customer Order Arrives

Supply Chain Macro Processes in a Firm



Customer Relationship Management (CRM)

All processes that focus on the interface between the firm and its customers

Internal supply chain management (ISCM)

All processes that are internal to the firm

Supplier Relationship Management (SRM)

All processes that focus on the interface between the firm and its suppliers

Supply Chain Macro Processes in a Firm

Supplier Firm Customer

SRM
Source Negotiate Buy Design Collaboration Supply Collaboration

ISCM
Strategic Planning Demand Planning Supply Planning Fulfillment Field Service

CRM
Market Price Sell Call Center Order Management