Supply Chain Management PDF

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Supply Chain Management Tuesday, October 22, 2019

4:14 PM

Supply Chain Management Supply chain: network of suppliers, manufacturers, distributors and retilers that manu SC Management • Managing material, information, financial flows in the entire network to meet cu • Successful SCM requires coordination and information sharing among all partne Traditional Supply Chain Flows

Upstream Flow Include: -Information flow: about demand, for example, which allows for no over-producing. -Financial Flow: retailer pays wholesaler, who pays distributor, who pays manufacture Downstream Flow Include the material flow. Supply Chain Costs and Risks Supply Chain Cost

acture and distribute products. tomer demand most economically. .

.

• Represents on avg 20% of a manufactured good. • By reducing supply chain costs, you can increase profit. Risks Supply Chain is Facing • Trade War (could increase costs of importing material, exporting final good) • Raw material shortages • Recalls and safety scares • Climate change (catastrophes naturelles) • Environmental regulations • Economic uncertainty • Industrial Unrest (Labor strikes) • Container ship fires • Battles at the borders • Drown and aviation safety Managing the Supply Chain Objective of SCM Synchronize supply and demand to make products available when and where they are Requires synchronization of 2 types of flows: • Material • Information - Order/Demand from downstream to upstream. - Availibility/Status from upstream to downstream. Supply Chain Strategy • Depends on the uncertainty framework. • Primary tradeoff : cost VS response time. • 2 SC design options: 1. Responsive 2. Efficient Demand Uncertainty Low Uncertainty - Functional Products Price will be lower. - Commodities. - Ex: toothbrush, bike, low-end phone.

emanded.

High Uncertainty - Innovative Products Responsiveness tends to be higher. - High-tech - Customized Products - Ex: Fast-fashion, folding bike, high-tech computer.

Supply Uncertainty Low Uncertainty - Stable Lots of sources of supply. High Uncertainty - Evolving Not enough suppliers, harder to find.

Suppply Chain Frameworks

(*agile supply chain combines risk-hedging and responsiveness). Drivers of Supply Chain Fit 1. Inventory • Convenience: cycle inventory - No customer buys eggs one by one • Unstable demand: seasonal inventory - Bathing suits, xmas toys, newsvendor model. • Randomness: safety inventory - Introduction of new cell phones, safety stock model. 2. Transportation Air, truck, rail, ship, pipeline, electronic. 3. Facilities • Production: Flexible vs Dedicated. • Inventory-like operations: receiving, storing, picking, packaging... - Cross docking. 4. Information • The connection between the various stages of supply chain. • Crucial in daily operation of each stage of the supply chain. • Allows suply chain to become more efficient and more responsive at the same tim • Information distortion: bullwhip effect. 5. Sourcing • Supplier selection: single vs multiple suppliers, negotiation. • Sourcing: In-house vs Out-sourcing. • Procurement process: every department buys from suppliers independently, or al

e (reduces the risk for a trade-off).

together.

6. • • •

Pricing Pricing strategies can be used to match demand and supply. Use pricing strategies to improce efficiency and responsiveness. Components of pricing decisions: - Everyday low-prices vs high-low. - Pricing and economy of scale. - Fixed price VS menu pricing.

Supply Chain Drivers and Strategy...