BUILDING

A STRATEGIC
FRAMEWORK TO
SUPPLY CHAIN
WHAT YOU WILL LEARN

Decision Phases In A Supply Chain

Process Views Of A Supply Chain

Push / Pull View Of Supply Chain Processes

Case Study
 PHASE IN A
SUPPLY CHAIN
DECISION PHASES IN SUPPLY CHAIN

Supply Chain Strategy Or Design

Company decides how to structure and configuration of the supply

chain over the next several years.

Strategic decision made by companies include whether to outsource

or perform a supply chain function in house, location, and capacities

of production also warehousing facilities

The result is defining plant location, warehouse location, assets

bought, employed worker. The time span will be 5-10 years ahead
DECISION PHASES IN SUPPLY CHAIN

Supply Chain Planning

Goal of planning is to maximize the supply chain surplus that can be

generated over the planning horizon given the constraints established

during the strategic or design phase

Start with forecasting, choose which market will be supplied from

which locations, subcontracting of manufacturing, inventories policies,

including timing and size of marketing and price promotions.

Result of planning phase is defining a set of operating policies that

govern the short term operations. The time horizon is 3 month - 1 year
DECISION PHASES IN SUPPLY CHAIN

Supply Chain Operations

Goal of supply chain operations is to handle incoming customer

orders in the best possible manner.

Firms allocate inventory or production to individual orders, set a date

by which an order is to filled, generate pick lists at a warehouse,

allocate an order to particular shipping mode and shipment, set

delivery schedules of trucks and place replenishment orders.

Result of operations phase is exploiting reduction of uncertainty and

optimize performance. Time horizon will be daily and weekly

PROCESS VIEWS OF
A SUPPLY CHAIN
PROCESS VIEWS OF A SUPPLY CHAIN

CYCLE VIEW
The processes in a supply chain that are divided into a series of cycle,

each performed at the interface between two succesive stages of the

supply chain

PUSH / PULL VIEW

Pull Processes are initiated by a customer order

Push Processes are initiated and performed in anticipation of

customer orders
PROCESS VIEW - AN APPLICATION STUDY
PROCESS VIEW - AN APPLICATION STUDY
PROCESS VIEW - A MAKE TO STOCK ENVIRONMENT

customer order cycle

start after order arrives

(pull proces)

Order fulfillment takes

from producti in

inventory that built to

anticipate the demand

replenishment to

ensure product

availability (push

process)
PROCESS VIEW - A MAKE TO ORDER ENVIRONMENT

Customer order triggers

production of the product

The manufacturing cycle

is the Order fulfillment

process in customer order

cycle (pull process)

Inventory is replenished in

anticipation of customer

demand in procurement

cycle (push process)

SUPPLY CHAIN MACRO PROCESSES IN A FIRM

SUPPLIER RELATIONSHIP MANAGEMENT (SRM)

All processes at the interface between the firm and its customers

INTERNAL SUPPLY CHAIN MANAGEMENT (ISCM)

All processes that are internal to the firm

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

All processes at the interface between firm and its customers
SUPPLY CHAIN MACRO PROCESSES IN A FIRM
PRODUCT-MARKET
CHARACTERISTICS
 ASPECTS FUNCTIONAL INOVATIVE

Long Life Cycle, can be more Short Life Cycle, can be less
LIFE CYCLE
than 2 years than 1 year

Many, can be 50 to 100

VARIANT PER CATEGORY Conform, 10 - 20 Variant
Variant

FORECASTING APPROACH Relatively Accurate High Error Possibilities

STOCKOUT RATE Can be pressed under 10% Can reach between 20 - 40%

PRICE MARKDOWN Relatively Small Can reach between 10 - 30%

PRODUCT MARKET STRATEGIC FIT
Responsive
UNFIT

STRATEGIC

FIT

Efficient
UNFIT

Functional Innovative
TACTICAL DECISION EFFICIENT RESPONSIVE

FACILITY LOCATION Cost-Efficient Location Based Market Location Based

Price and Quality as the main Speed, Flexibility, and Quality

SUPPLIER
concern become the main concern

INVENTORY Minimizing Inventory Position Implementing the safety stock

Full Capacity Delivery, using Less than capacity; faster and

TRANSPORTATION
3PL if necessary more flexible transport

Focus in minimizing production Applying modularity and

PRODUCT DEVELOPMENT
cost postponement
A CASE STUDY
ASSIGNMENT 1