Lectures 1&2: Introduction to Overview Overview Supply - - PowerPoint PPT Presentation

Ω

Lectures 1&2: Lectures 1&2: Introduction to

Introduction to Supply Chain Management Supply Chain Management

Quality Assurance in Supply Chain Management (INSE 6300/4-UU) Winter 2011

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

• Ω

Course Outline Course Outline

Instructor: Dr. J. Bentahar Office: EV7.630 Lectures: Monday, 17h45 – 20h15 Office Hours: Thursday, 10h00 – 12h00 Phone: 848-2424 ext. 5382 E-Mail: bentahar@ciise.concordia.ca

• Ω

Course Outline Course Outline

Course Web:

http://www.ciise.concordia.ca/~bentahar/inse6300.html

Lecture notes Assignment Useful links Useful information

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Software Systems Procurement

• Ω

INSE 6300/4 INSE 6300/4-

• UU

UU

Quality Assurance in Supply Chain Management:

Supply chain operations, activities, and processes Quality assurance in these processes Engineering vs. business perspective

Objectives:

To discover and learn various concepts and

techniques related to supply chain and quality assurance

To learn to apply these techniques To develop critical thinking skills

• Ω

INSE 6300/4 INSE 6300/4-

• UU

UU

Quality Assurance In Supply Chain Management Supply Chain Engineering Performance, Metrics, and Quality Attributes Quality Assurance System Designing the Supply Chain Network Inventory Management Supply Chain Coordination Information Technology in a Supply Chain Decision Support Systems Managing Uncertainty

• Ω

Textbooks Textbooks

1) Supply Chain Management: Strategy,

Planning, and Operation. (4th Edition), 2009

Supply chain management and quality assurance

principals: supply chain performance, drivers, and metrics, supply chain network design, planning demand, managing inventories, managing uncertainty, and coordination Printed with FinePrint - purchase at www.fineprint.com

• Ω

Textbooks Textbooks

2) Designing & Managing the Supply

Chain: Concepts, Strategies, and Case

• Studies. 2006

Supply chain principals and challenging issues:

inventory management, supply chain integration, Managing uncertainty, information technology and decision support systems for supply chain management

• Ω

Textbooks Textbooks

3) Research Papers

Challenging and open problems Verification and Validation New developments within information

technology:

Intelligent Agents Simulations Decision Support Systems

• Ω

Requirements and Grading Requirements and Grading

One individual/group assignment

15%

One in-class mid-term exam (closed book)

25%

One in-class final exam (closed book)

35%

One team project (2~3 members, presentation

+ report)

25%

• Ω

Important dates Important dates

April 11, 2011 Project report April 04, 2011 Final exam March 28, 2011 Project presentation February 14, 2011 Mid-term February 07, 2011 Assignment January 31, 2011 Project proposal Printed with FinePrint - purchase at www.fineprint.com

• Ω

Project Project

Project proposal

Deadline: January 31, 2011 Team members Topic and title Abstract Main references

• Ω

Question Question

Please describe briefly about yourself:

Academic background Industry experience Research domains you are interested in

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

• Ω

Definitions Definitions

A supply chain consists of all parties

involved, directly or indirectly, in fulfilling a customer request

The supply chain includes all functions

involved in receiving and filling a customer request

(Supply Chain Management)

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Definitions Definitions

Supply Chain management is a set of

approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize “systemwide” costs while satisfying service level requirements

(Designing & Managing the Supply Chain)

• Ω

Definitions Definitions

Supply chain management deals with

the control of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers

(Stanford Supply Chain Forum Website)

• Ω

The Supply Chain The Supply Chain

• Ω

The Supply Chain Network The Supply Chain Network

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Supply Chain Stages or Parts Supply Chain Stages or Parts

• Ω

Supply Chain Example: Printer Supply Chain Example: Printer

• Ω

Supply Chain Considerations Supply Chain Considerations

Supply Chain Management

Design Planning Product Development Inventory Control Transportation Marketing Customer Request Service Levels

• Ω

Supply Chain Management: A Supply Chain Management: A Systems Engineering Approach Systems Engineering Approach

Systems engineering: the art and

science of creating a product or service based on phased efforts:

Definition, design, development, production

and maintenance activities

Supply chain management and systems

engineering have the same objective:

Producing high quality products fulfilling

the customer requirements

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Supply Chain Management: A Supply Chain Management: A Systems Engineering Approach Systems Engineering Approach

Systems engineering: a management technology that

controls a total system life cycle process

Systems engineering focuses on:

Defining customer needs and required functionality, Documenting requirements, Proceeding with design synthesis and system validation

Like systems engineering, Supply chain management

considers both the business and technical needs of all customers

• Ω

The Systems Engineering Life The Systems Engineering Life Cycle Cycle

Product Use, Phase-out, and Disposal Production and/or Construction Detail Design and Development Conceptual and Preliminary Design

Acquisition Phase Utilization Phase

NEED

• Ω

Flows in a Supply Chain Flows in a Supply Chain

Customer

Information Product Funds

• Ω

Flows in a Supply Chain Flows in a Supply Chain

Three flows: material, information, financial Downstream

Material

Parts and products

Information

Production capacity, delivery schedule

Financial

Invoices, credit, funds

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Complex supply chain network Ex) worldwide suppliers Complex product structure Ex) product contains many hardware and software components Decentralized control

• Ex) functional teams focused on narrow functional goals

Increasing pressure for customer service Multiple sources of uncertainty and variability Ex) demand, supply, and process variability

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Uncertainty

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Different stages in the supply chain have different

conflicting objectives:

Objective of suppliers: manufacturers purchase large

quantities with flexible delivery date

Manufacturers need to be flexible to their customers’ need

• Suppliers goals are in direct conflict with the manufacturers
• bjectives

Manufacturers objectives of making large production

conflicts with the objective of warehouses and distribution centers to reduce inventory

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Uncertainty is the most significant threats to

supply chain quality

Three main sources of uncertainty in supply

chains:

Demand variability

Ex) difficulty in forecasting sales

Process uncertainty

Ex) unexpected downtimes and yield losses

Supply uncertainty

Ex) supplier deliveries are late

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Matching Supply with Demand Matching Supply with Demand

One of the most important issues in

quality supply chain management

Matching supply with demand

Firms that are better at matching supply

with demand enjoy a significant competitive advantage

• Ω

Order Variations Order Variations

• Ω

Quality Management in Supply Quality Management in Supply Chain Chain

Supply Chain Quality Quality of Design Quality of Conformance Product Design Supply Chain Process Design Supply Chain Control Supply Chain Monitoring

Quality Planning (Quality Assurance) Quality Control Quality Improvement

• Ω

Quality Assurance: Supply Chain Quality Assurance: Supply Chain Process Design Process Design

Quality issues Quality attributes Managing uncertainty Managing inventory Designing the supply chain network

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Key Quality Issues Key Quality Issues

Supply Chain Quality Issues

Network Planning Inventory Control Distribution Strategies Product Design Outsourcing Strategies Integration & Partnering Information Technology

Decision- Support Sys.

• Ω

Key Quality Issues Key Quality Issues

Network Planning: optimization aspect Inventory Control: minimizing inventory

• rdering and holding cost

Distribution Strategies: relationships

between suppliers and manufacturers

• Ω

Key Quality Issues Key Quality Issues

Supply Chain Integration and Strategic

Partnering: global optimization, information sharing and operational planning

Outsourcing and Procurement Strategies:

what to make internally and what to buy from

• utside sources

Information Technology and Decision-

Support Systems: data transfer and analysis, efficiency in supply chain management

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

Printed with FinePrint - purchase at www.fineprint.com

• Ω

The Objective of a Supply Chain The Objective of a Supply Chain

Maximize overall value created Supply chain value: difference between what

the final product is worth to the customer and the effort the supply chain expends in filling the customer’s request

Value is correlated to supply chain profitability

(difference between revenue generated from the customer and the overall cost across the supply chain)

• Ω

The Objective of a Supply Chain The Objective of a Supply Chain

Example: Dell receives $2000 from a customer for a

computer (revenue)

Supply chain incurs costs (information, storage,

transportation, components, assembly, etc.)

Difference between $2000 and the sum of all of these

costs is the supply chain profit

Supply chain profitability is total profit to be shared

across all stages of the supply chain

Supply chain success should be measured by total

supply chain profitability, not profits at an individual stage

• Ω

The Objective of a Supply Chain The Objective of a Supply Chain

Sources of supply chain revenue: the

customer

Sources of supply chain cost: flows of

information, products, or funds between stages of the supply chain

Supply chain management is the

management of flows between and among supply chain stages to maximize total supply chain profitability

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Activity Levels Activity Levels

Strategic Level

Decisions about the number, locations, and capacity of warehouses, plants

Tactical Level

Purchasing and production decisions, Inventory and transportation policies

Operational Level

Day-to-day decisions: scheduling, truck loading, …

Supply Chain Integration

Global Plan Detail Sub-Plans Operational Plans

• Ω

Decision Phases of a Supply Decision Phases of a Supply Chain Chain

Supply chain strategy or design Supply chain planning Supply chain operation

• Ω

Supply Chain Strategy or Design Supply Chain Strategy or Design

Decisions about the structure of the supply chain and

what processes each stage will perform

Strategic supply chain decisions

Locations and capacities of facilities Products to be made or stored at various locations Modes of transportation Information systems

Supply chain design must support strategic

• bjectives

Supply chain design decisions are long-term and

expensive to reverse – must take into account market uncertainty

• Ω

Supply Chain Planning Supply Chain Planning

Definition of a set of policies that govern

short-term operations

Fixed by the supply configuration from

previous phase

Starts with a forecast of demand in the

coming year

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Supply Chain Planning Supply Chain Planning

Planning decisions:

Which markets will be supplied from which

locations

Planned buildup of inventories Subcontracting, backup locations Inventory policies Timing and size of market promotions

Must consider in planning decisions demand

uncertainty, exchange rates, competition over the time horizon

• Ω

Supply Chain Operation Supply Chain Operation

Time horizon is weekly or daily Decisions regarding individual customer orders Supply chain configuration is fixed and operating

policies are determined

Goal is to implement the operating policies as

effectively as possible

Allocate orders to inventory or production, set order

due dates, generate pick lists at a warehouse, allocate an order to a particular shipment, set delivery schedules, place replenishment orders

Much less uncertainty (short time horizon)

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

• Ω

Process Views of a Supply Chain Process Views of a Supply Chain

Cycle view: processes in a supply chain are

divided into a series of cycles, each performed at the interfaces between two successive supply chain stages

Push/Pull (Speculate/React) view: processes

in a supply chain are divided into two categories depending on whether they are executed in response to a customer order (pull) or in anticipation of a customer order (push)

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Process Views of a Supply Chain: Process Views of a Supply Chain: Cycle View Cycle View

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

• Ω

Process Views of a Supply Chain: Process Views of a Supply Chain: Cycle View Cycle View

Each cycle occurs at the interface between two

successive stages

Customer order cycle (customer-retailer) Replenishment cycle (retailer-distributor) Manufacturing cycle (distributor-manufacturer) Procurement cycle (manufacturer-supplier) Cycle view clearly defines processes involved

and the owners of each process. Specifies the roles and responsibilities of each member and the desired outcome of each process

• Ω

Push/Pull View of Supply Chains Push/Pull View of Supply Chains

Procurement, Manufacturing and Replenishment cycles Customer Order Cycle Customer Order Arrives PUSH PROCESSES PULL PROCESSES

• Ω

Push/Pull View of Push/Pull View of Supply Chain Processes Supply Chain Processes

Supply chain processes fall into one of two

categories depending on the timing of their execution relative to customer demand

Pull: execution is initiated in response to a

customer order (reactive)

Push: execution is initiated in anticipation of

customer orders (speculative)

Push/pull boundary separates push

processes from pull processes

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Push/Pull View of Push/Pull View of Supply Chain Processes Supply Chain Processes

Useful in considering strategic decisions

relating to supply chain design – more global view of how supply chain processes relate to customer orders

Can combine the push/pull and cycle views

Dell (build-to-order strategy)

The relative proportion of push and pull

processes can have an impact on supply chain performance

• Ω

Dell Supply Chain Dell Supply Chain

• Ω

Supply Chain Macro Processes Supply Chain Macro Processes

Customer Relationship Management (CRM):

Interface between the firm and its customers

Internal Supply Chain Management (ISCM): Internal

processes to the firm

Supplier Relationship Management (SRM): Interface

between the firm and its suppliers

• Ω

Supply Chain Macro Processes Supply Chain Macro Processes

CRM: Market analysis; pricing strategies;

selling strategies; order management; …

ISCM: Strategic planning; Demand planning

(forecasting); Supply planning; strategic fit;…

SRM: Negotiation strategies; design

collaboration; supply collaboration

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Readings Readings

Lectures 1&2:

Chapter 1 of Supply Chain Management Chapter 1 of Designing & Managing the

Supply Chain

Lecture 3:

Chapter 2 of Supply Chain Management

Ω

Lectures 1&2: Lectures 1&2: Introduction to

Introduction to Supply Chain Management Supply Chain Management

Quality Assurance in Supply Chain Management (INSE 6300/4-UU) Winter 2011

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

• Ω

Course Outline Course Outline

Instructor: Dr. J. Bentahar Office: EV7.630 Lectures: Monday, 17h45 – 20h15 Office Hours: Thursday, 10h00 – 12h00 Phone: 848-2424 ext. 5382 E-Mail: bentahar@ciise.concordia.ca

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Course Outline Course Outline

Course Web:

http://www.ciise.concordia.ca/~bentahar/inse6300.html

Lecture notes Assignment Useful links Useful information

• Ω

Software Systems Procurement

• Ω

INSE 6300/4 INSE 6300/4-

• UU

UU

Quality Assurance in Supply Chain Management:

Supply chain operations, activities, and processes Quality assurance in these processes Engineering vs. business perspective

Objectives:

To discover and learn various concepts and

techniques related to supply chain and quality assurance

To learn to apply these techniques To develop critical thinking skills

• Ω

INSE 6300/4 INSE 6300/4-

• UU

UU

Quality Assurance In Supply Chain Management Supply Chain Engineering Performance, Metrics, and Quality Attributes Quality Assurance System Designing the Supply Chain Network Inventory Management Supply Chain Coordination Information Technology in a Supply Chain Decision Support Systems Managing Uncertainty

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Textbooks Textbooks

1) Supply Chain Management: Strategy,

Planning, and Operation. (4th Edition), 2009

Supply chain management and quality assurance

principals: supply chain performance, drivers, and metrics, supply chain network design, planning demand, managing inventories, managing uncertainty, and coordination

• Ω

Textbooks Textbooks

2) Designing & Managing the Supply

Chain: Concepts, Strategies, and Case

• Studies. 2006

Supply chain principals and challenging issues:

inventory management, supply chain integration, Managing uncertainty, information technology and decision support systems for supply chain management

• Ω

Textbooks Textbooks

3) Research Papers

Challenging and open problems Verification and Validation New developments within information

technology:

Intelligent Agents Simulations Decision Support Systems

• Ω

Requirements and Grading Requirements and Grading

One individual/group assignment

15%

One in-class mid-term exam (closed book)

25%

One in-class final exam (closed book)

35%

One team project (2~3 members, presentation

+ report)

25%

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Important dates Important dates

April 11, 2011 Project report April 04, 2011 Final exam March 28, 2011 Project presentation February 14, 2011 Mid-term February 07, 2011 Assignment January 31, 2011 Project proposal

• Ω

Project Project

Project proposal

Deadline: January 31, 2011 Team members Topic and title Abstract Main references

• Ω

Question Question

Please describe briefly about yourself:

Academic background Industry experience Research domains you are interested in

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Definitions Definitions

A supply chain consists of all parties

involved, directly or indirectly, in fulfilling a customer request

The supply chain includes all functions

involved in receiving and filling a customer request

(Supply Chain Management)

• Ω

Definitions Definitions

Supply Chain management is a set of

approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize “systemwide” costs while satisfying service level requirements

(Designing & Managing the Supply Chain)

• Ω

Definitions Definitions

Supply chain management deals with

the control of materials, information, and financial flows in a network consisting of suppliers, manufacturers, distributors, and customers

(Stanford Supply Chain Forum Website)

• Ω

The Supply Chain The Supply Chain

Printed with FinePrint - purchase at www.fineprint.com

• Ω

The Supply Chain Network The Supply Chain Network

• Ω

Supply Chain Stages or Parts Supply Chain Stages or Parts

• Ω

Supply Chain Example: Printer Supply Chain Example: Printer

• Ω

Supply Chain Considerations Supply Chain Considerations

Supply Chain Management

Design Planning Product Development Inventory Control Transportation Marketing Customer Request Service Levels

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Supply Chain Management: A Supply Chain Management: A Systems Engineering Approach Systems Engineering Approach

Systems engineering: the art and

science of creating a product or service based on phased efforts:

Definition, design, development, production

and maintenance activities

Supply chain management and systems

engineering have the same objective:

Producing high quality products fulfilling

the customer requirements

• Ω

Supply Chain Management: A Supply Chain Management: A Systems Engineering Approach Systems Engineering Approach

Systems engineering: a management technology that

controls a total system life cycle process

Systems engineering focuses on:

Defining customer needs and required functionality, Documenting requirements, Proceeding with design synthesis and system validation

Like systems engineering, Supply chain management

considers both the business and technical needs of all customers

• Ω

The Systems Engineering Life The Systems Engineering Life Cycle Cycle

Product Use, Phase-out, and Disposal Production and/or Construction Detail Design and Development Conceptual and Preliminary Design

Acquisition Phase Utilization Phase

NEED

• Ω

Flows in a Supply Chain Flows in a Supply Chain

Customer

Information Product Funds Printed with FinePrint - purchase at www.fineprint.com

• Ω

Flows in a Supply Chain Flows in a Supply Chain

Three flows: material, information, financial Downstream

Material

Parts and products

Information

Production capacity, delivery schedule

Financial

Invoices, credit, funds

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Complex supply chain network Ex) worldwide suppliers Complex product structure Ex) product contains many hardware and software components Decentralized control

• Ex) functional teams focused on narrow functional goals

Increasing pressure for customer service Multiple sources of uncertainty and variability Ex) demand, supply, and process variability

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Uncertainty

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Different stages in the supply chain have different

conflicting objectives:

Objective of suppliers: manufacturers purchase large

quantities with flexible delivery date

Manufacturers need to be flexible to their customers’ need

• Suppliers goals are in direct conflict with the manufacturers
• bjectives

Manufacturers objectives of making large production

conflicts with the objective of warehouses and distribution centers to reduce inventory

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Challenges in Supply Chain Challenges in Supply Chain Management Management

Uncertainty is the most significant threats to

supply chain quality

Three main sources of uncertainty in supply

chains:

Demand variability

Ex) difficulty in forecasting sales

Process uncertainty

Ex) unexpected downtimes and yield losses

Supply uncertainty

Ex) supplier deliveries are late

• Ω

Matching Supply with Demand Matching Supply with Demand

One of the most important issues in

quality supply chain management

Matching supply with demand

Firms that are better at matching supply

with demand enjoy a significant competitive advantage

• Ω

Order Variations Order Variations

• Ω

Quality Management in Supply Quality Management in Supply Chain Chain

Supply Chain Quality Quality of Design Quality of Conformance Product Design Supply Chain Process Design Supply Chain Control Supply Chain Monitoring

Quality Planning (Quality Assurance) Quality Control Quality Improvement

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Quality Assurance: Supply Chain Quality Assurance: Supply Chain Process Design Process Design

Quality issues Quality attributes Managing uncertainty Managing inventory Designing the supply chain network

• Ω

Key Quality Issues Key Quality Issues

Supply Chain Quality Issues

Network Planning Inventory Control Distribution Strategies Product Design Outsourcing Strategies Integration & Partnering Information Technology

Decision- Support Sys.

• Ω

Key Quality Issues Key Quality Issues

Network Planning: optimization aspect Inventory Control: minimizing inventory

• rdering and holding cost

Distribution Strategies: relationships

between suppliers and manufacturers

• Ω

Key Quality Issues Key Quality Issues

Supply Chain Integration and Strategic

Partnering: global optimization, information sharing and operational planning

Outsourcing and Procurement Strategies:

what to make internally and what to buy from

• utside sources

Information Technology and Decision-

Support Systems: data transfer and analysis, efficiency in supply chain management

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

• Ω

The Objective of a Supply Chain The Objective of a Supply Chain

Maximize overall value created Supply chain value: difference between what

the final product is worth to the customer and the effort the supply chain expends in filling the customer’s request

Value is correlated to supply chain profitability

(difference between revenue generated from the customer and the overall cost across the supply chain)

• Ω

The Objective of a Supply Chain The Objective of a Supply Chain

Example: Dell receives $2000 from a customer for a

computer (revenue)

Supply chain incurs costs (information, storage,

transportation, components, assembly, etc.)

Difference between $2000 and the sum of all of these

costs is the supply chain profit

Supply chain profitability is total profit to be shared

across all stages of the supply chain

Supply chain success should be measured by total

supply chain profitability, not profits at an individual stage

• Ω

The Objective of a Supply Chain The Objective of a Supply Chain

Sources of supply chain revenue: the

customer

Sources of supply chain cost: flows of

information, products, or funds between stages of the supply chain

Supply chain management is the

management of flows between and among supply chain stages to maximize total supply chain profitability

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

• Ω

Activity Levels Activity Levels

Strategic Level

Decisions about the number, locations, and capacity of warehouses, plants

Tactical Level

Purchasing and production decisions, Inventory and transportation policies

Operational Level

Day-to-day decisions: scheduling, truck loading, …

Supply Chain Integration

Global Plan Detail Sub-Plans Operational Plans

• Ω

Decision Phases of a Supply Decision Phases of a Supply Chain Chain

Supply chain strategy or design Supply chain planning Supply chain operation

• Ω

Supply Chain Strategy or Design Supply Chain Strategy or Design

Decisions about the structure of the supply chain and

what processes each stage will perform

Strategic supply chain decisions

Locations and capacities of facilities Products to be made or stored at various locations Modes of transportation Information systems

Supply chain design must support strategic

• bjectives

Supply chain design decisions are long-term and

expensive to reverse – must take into account market uncertainty Printed with FinePrint - purchase at www.fineprint.com

• Ω

Supply Chain Planning Supply Chain Planning

Definition of a set of policies that govern

short-term operations

Fixed by the supply configuration from

previous phase

Starts with a forecast of demand in the

coming year

• Ω

Supply Chain Planning Supply Chain Planning

Planning decisions:

Which markets will be supplied from which

locations

Planned buildup of inventories Subcontracting, backup locations Inventory policies Timing and size of market promotions

Must consider in planning decisions demand

uncertainty, exchange rates, competition over the time horizon

• Ω

Supply Chain Operation Supply Chain Operation

Time horizon is weekly or daily Decisions regarding individual customer orders Supply chain configuration is fixed and operating

policies are determined

Goal is to implement the operating policies as

effectively as possible

Allocate orders to inventory or production, set order

due dates, generate pick lists at a warehouse, allocate an order to a particular shipment, set delivery schedules, place replenishment orders

Much less uncertainty (short time horizon)

• Ω

Overview Overview

Course Outline Preliminary Notions Objective and Importance of Supply

Chain

Supply Chain Activity Levels Process Views

Printed with FinePrint - purchase at www.fineprint.com

• Ω

Process Views of a Supply Chain Process Views of a Supply Chain

Cycle view: processes in a supply chain are

divided into a series of cycles, each performed at the interfaces between two successive supply chain stages

Push/Pull (Speculate/React) view: processes

in a supply chain are divided into two categories depending on whether they are executed in response to a customer order (pull) or in anticipation of a customer order (push)

• Ω

Process Views of a Supply Chain: Process Views of a Supply Chain: Cycle View Cycle View

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

• Ω

Process Views of a Supply Chain: Process Views of a Supply Chain: Cycle View Cycle View

Each cycle occurs at the interface between two

successive stages

Customer order cycle (customer-retailer) Replenishment cycle (retailer-distributor) Manufacturing cycle (distributor-manufacturer) Procurement cycle (manufacturer-supplier) Cycle view clearly defines processes involved

and the owners of each process. Specifies the roles and responsibilities of each member and the desired outcome of each process

• Ω

Push/Pull View of Supply Chains Push/Pull View of Supply Chains

Procurement, Manufacturing and Replenishment cycles Customer Order Cycle Customer Order Arrives PUSH PROCESSES PULL PROCESSES Printed with FinePrint - purchase at www.fineprint.com

• Ω

Push/Pull View of Push/Pull View of Supply Chain Processes Supply Chain Processes

Supply chain processes fall into one of two

categories depending on the timing of their execution relative to customer demand

Pull: execution is initiated in response to a

customer order (reactive)

Push: execution is initiated in anticipation of

customer orders (speculative)

Push/pull boundary separates push

processes from pull processes

• Ω

Push/Pull View of Push/Pull View of Supply Chain Processes Supply Chain Processes

Useful in considering strategic decisions

relating to supply chain design – more global view of how supply chain processes relate to customer orders

Can combine the push/pull and cycle views

Dell (build-to-order strategy)

The relative proportion of push and pull

processes can have an impact on supply chain performance

• Ω

Dell Supply Chain Dell Supply Chain

• Ω

Supply Chain Macro Processes Supply Chain Macro Processes

Customer Relationship Management (CRM):

Interface between the firm and its customers

Internal Supply Chain Management (ISCM): Internal

processes to the firm

Supplier Relationship Management (SRM): Interface

between the firm and its suppliers Printed with FinePrint - purchase at www.fineprint.com

• Ω

Supply Chain Macro Processes Supply Chain Macro Processes

CRM: Market analysis; pricing strategies;

selling strategies; order management; …

ISCM: Strategic planning; Demand planning

(forecasting); Supply planning; strategic fit;…

SRM: Negotiation strategies; design

collaboration; supply collaboration

• Ω

Readings Readings

Lectures 1&2:

Chapter 1 of Supply Chain Management Chapter 1 of Designing & Managing the

Supply Chain

Lecture 3:

Chapter 2 of Supply Chain Management

Printed with FinePrint - purchase at www.fineprint.com