HM 222-SCM

• What collaboration is.

• Who the major internal and external members of the

chain of supply are?

• What role they each play in the supply chain

• What responsibilities and activities are associated with

both internal and external supply chain members?

• What types of collaborative methods are

• Why internal and external collaboration is important

used?

• How organizations can do it

CHAPTER 2 – Supply Chain Collaboration

Supply Chain Collaboration

- Collective interaction of supply chain members toward

achieving a mutually beneficial goal.

- Collective Interactions ways in which members.

- Communicate.

- Share information.

- Engage in joint planning and decision making. Supply Chain Members

- Coordinate activities.
- Mutually Beneficial each member stands to gain
something from working together.
The Importance of Collaboration
• Efficiency and Effectiveness Critical to Global Economy
• Reduce costs and waste
• Create competitive advantage
• Relationship becomes less about price and more
about value
• Value passed through the customers for competitive
advantage
• Value passed through the customers for
competitive advantage
HM 222 Supply Chain Management
Who are members of a supply chain and what do they
do? It depends
Which supply chain is being discussed? Supply chain
strategies are often designed to meet specific customer
groups and each category could require a different
supply chain with its own membership.
Internal Supply Chain Membership
Factors:
• Size of an organization
• Industry sector
Small Manufacturing Operations-1. multi tasked several
responsibilities
Large Firms-separate responsibilities that includes
marketing, supply mgt., finance production, logistics
and information technology.

• For small scale operators

• Sharing of information about the requirements,

inventory levels, anticipated demand between the
buying firm and suppliers.

VMI – Vendor Managed Inventories.

ECR- Efficient Consumer Response Used by consumer

goods, compliance and grocery retailers are much larger
in scale and complexity.
 Supply Mgt. Strategic and Tactical Responsibilities

1. Product- tangible and intangible-whatever satisfies

the customer.

2. Price – amount of money, whatever the buyer and

seller agree upon to make the exchange for a product.

3. Place- primarily concerned with distribution -

successful marketing requires getting the right product
to the right place for customers.

4. Promotion – communication marketing must inform

and persuade. -include public relations, press

releases, advertising, direct marketing and personal

selling.

5. People- refers to all people involve in exchange of

products and services and includes the customers, the
internal employees.

6. Process- all the tasks, procedures and policies, that

assist in getting a product or service to the customer

7. Physical Evidence (Packaging and Placement)

Influences the buying decisions of customers

-Encloses and protects a product

-Retail operations-physical aspects apply to layout of

the store.

Example of Supply Chain Collaboration in Packaging

and Placement

For terms use to Identify the department

Supply Chain responsible for buying materials and services.
Finance • Information Technology
• Manages the firm's money
Refers to the electronic equipment (mainly computers),
Three Functions
the system uses to store, retrieve, and analyzed data,
1. To provide support for business and operational
planning. and the communication equipment used to transmit it.
2. To provide operational support to the company’s Assessing and making recommendations about
other functions. equipment, working with service suppliers, determining
3. To produce required internal and external reports. system capacity requirements, and maintaining all the
Financial Management Activities electronic communication and data processing assets of
1. Planning – financial strategies, budgeting, revenue the firm.
and expense projections and estimating the cost of
capital projects.
2. Compliance- monitoring expenditures activity;
assuring compliance with the federal, state,
and local regulations assess state, and local regulations
abatement methods and auditing to guarantee that
company policies are met; safeguarding against
fraudulent.
3. Guidance- Finance must provide management with
quantitative data and well supported recommendation
to help them make decisions about project, capital,
purchases and investments.
4. Risk Management- Financial risk are serious from an
organization. To prevent damage to the firm, finance
professionals work to identify and manage any risk such
as using insurance and financial measures.

Logistics and Information Technology

• Logistics

The basic function of logistics is to manage the means

by which an organization movesand stores products and
materials from the extraction of raw commodities
through the chain of supply management.
Insert
Running
Title
What information Technology Needs to know
 CHAPTER 3
CREATING AND MANAGING SUPPLIER RELATIONSHIP

S
DEVELOPING SUPPLIER RELATIONSHIP

COMMITMENT AND TOP MANAGEMENT SUPPORT

 • Examples of Supplier Metrics

1. COST/PRICE

• Competitive price

• Availability of cost breakdowns

• Productivity improvement/cost reduction programs

• Willingness to negotiate price

• Inventory cost

• Information cost

• Transportation cost

• Actual cost compared to historical(standard) cost,

target cost, cost reduction goal, benchmark cost

• Extent of cooperation leading to improved cost

2. QUALITY

• Zero defects

• Statistical process controls

• Continuous process improvement

• Fit for use

• Corrective action program

• Documented quality program such as ISO 9000

• Warranty

• Actual compared to historical quality, specification

quality, target quality

• Quality improvement compared to; historical quality,

quality improvement goal

• Extent of cooperation leading to improve quality

3. DELIVERY

• Fast

• Reliable/on time

• Defect free deliveries

• Actual delivery compared to promoted delivery

window (i.e., two days early zero days late)

CAPABILITIES
• Extent of cooperation leading to improved delivery
PERFORMANCE METRICS
4. RESPONSIVENESS AND FLEXIBILITY
PERFORMANCE METRICS
• Responsiveness to customers • Extent of cooperation leading to improved
environmental issues
• Accuracy and record keeping
6. TECHNOLOGY
• Ability to work effectively with teams
• Practice improvement using proven
• Responsiveness to changing situations
manufacturing service technology
• Participation/success of supplier certification program
• Superior product/service design
• Short cycle changes in demand/flexible capacity
• Extent of cooperation leading to improve technology
• Changes in delivery schedules

• Participation in few products development

7. BUSINESS METRICS
• Solving problems
• Reputation of supplier leadership in the field
• Willingness of supplier to seek inputs regarding
• Long term relationship
product/service changes
• Quality of information sharing
• Advance notification given by a supplier as a result of
product/service changes •Financial strength such as Dun and Bradstreet credit
rating
• Receptiveness for partnering or teaming
• Strong customer support group
5. Environment
• Total cash flow
• Environmentally responsible
• Rate of return on investment
• Environmental management system such as ISO
14000 • Extent of cooperation leading to improve business
processes and performance

8.TOTAL COST OWNERSHIP

• Purchased products shipped cost effectively

• Cost of special handling

• Additional supplier cost as the result of buyer’s

scheduling and shipment needs

• Cost defects, rework and problem solving associated

with purchases.

Weighted Criteria Evaluation System

What is ISO (International Organization for

Standardization)?
Philippines ‘ISO 9001:2008 Standards

What is ISO (International Organization for

Standardization)?