Supply Chain Management

Supply Chain Management : Supply Chain Management Def: Supply Chain What is Supply Chain Management? Strategic Importance of SCM Purchasing Operations/Materials Management Marketing and Customer Service Uncertainty In Supply Chain & Some Solutions Supply Chain Design Accounting and Finance

Supply Chain : Supply Chain Facilities, functions, activities for producing & delivering product or service from supplier to customer Planning, managing, acquiring, producing, warehousing, distribution, delivery

What is Supply Chain Management? : Purchasing- Vendors What is Supply Chain Management? Operations/ Materials Man. Marketing/ Sales/ Cust. Serv. Accounting and Finance

Strategic Importance of SCM : Strategic Importance of SCM Deals w/the complete cycle of materials flows SCM plays key role in Product customization Quality control Cost reductions Speed-to-market Effective SCM is to balance the production stream with uncertainty (customer, supplier, economic, etc.)

Purchasing : Purchasing Why Important? Substantial % of sales, both goods and services e.g., Industry % of Sales All 54% Lumber 60% Food 63% Petroleum 83% Quality of goods and services produced are directly related to those purchased/received

Purchasing : Purchasing Selecting suppliers Ordering materials Shipping & delivery of raw materials Information management Quality management - w/regard to suppliers Customer service - w/regard to suppliers and fellow workers

Operations/Materials Management : Operations/Materials Management Ordering materials - in conjunction w/purchasing Inventory control Scheduling production & capacity Shipping & delivery - in conjunction w/warehouse Information management - linked to 3 major business areas Quality management - garbage in/garbage out principal Customer service - vendors and final customer

Marketing and Customer Service : Marketing and Customer Service Forecasting demand Selecting suppliers - in conjunction w/purchasing Shipping & delivery - contract requirements Information management Quality management - first place customer complaints and/or compliments Customer service - make the sale next time?

Uncertainty In Supply Chain : Uncertainty In Supply Chain Wrong forecasts Late deliveries Poor quality Machine breakdowns Canceled orders Erroneous information

Some Solutions : Some Solutions Vertical integration Single sourcing JIT - moving suppliers closer Keiretsu - Japanese concept of partnering a small # of suppliers and vertical integration Information technology improvements- MRP, ERP Improved inventory control - goods as well as services

Supply Chain Design : Supply Chain Design Strategic issue Apply quality management principles Control inventory Work with suppliers & customers to achieve goals Major goal of distribution is speed Locate close to major markets Use IT to speed information flow - e.g., EDI, Internet, etc. Outsource international distribution

Summary : Summary Def: Supply Chain What is Supply Chain Management? Strategic Importance of SCM Purchasing Operations/Materials Management Marketing and Customer Service Uncertainty In Supply Chain & Some Solutions Supply Chain Design Accounting and Finance