Integrating the Supply Chain -RKS | Supply Chain | Logistics

Integration in the supply chain
THE CONCERN IS
How can we integrate supply chain : internally, externally and if possible electronically?

and inter-organization processes to achieve the effective and efficient flows of • • • • Product and services Information Money Feed Back • With the objective of providing the maximum value to the customer at low cost and high speed .Integration in the supply chain • Supply Chain Integration means The degree to which the firm can strategically collaborate with their supply chain partners and collaboratively manage the intra.

Integration in the supply chain  Measures of integration  Access to planning system  Sharing production plans  Joint EDI access / networks  Knowledge of inventory mix / levels  Packaging customization  Delivery frequencies  Common logistical equipment / containers  Common use of third-party logistics .

Integration in the supply chain  Internal integration: function to function Purchasing Low price Production High productivity of machine and labor Distribution Keep warehousing operation smooth Unreliable delivery and low quality High batch size Post-manufacturing operation being resisted Additional complexity of customizing products Poor available distribution .

Inter.Intra Company collaboration Strategic Collaboration Information & Decision Flow Products & Services Flow Enterprise A Financial Flow END CUSTOMERS RAW MATERIALS Information & Knowledge Flow Enterprise B Products & Services Flow Information & Knowledge Flow Financial Flow Material and Money Flow .

Integration in the supply chain  Electronic collaboration Transactional The electronic execution of transaction Information sharing The electronic sharing or exchange of information Collaboration planning Strategic. tactical and operational exchange Electronic collaboration .

Integration in the supply chain Information flow in apparel supply chain .

Efficient consumer response  Key issue How can collaboration be extended across the supply chain to focus on meeting consumer demand? 1 .

Efficient consumer response  Category management Category Establish management infrastructure Optimize introductions Optimize assortments Optimize promotions Product replenishment Integrated suppliers Synchronized production Continuous replenishment Automated store ordering Reliable operations Crossdocking Item coding and database maintenance Enabling technologies EDI EFT ABC .

Efficient consumer response  Enabling technologies  Scanning data  Data warehousing  Data mining  The data include  Demand / consumption / sales information  Cash flow  Stocks of finished goods / work in progress  Delivery and output status .

Efficient consumer response Category management Continuous replenishment Joint Enabling technologies Effective management Demand management Required Multifunctional selling teams capability Price list restructuring Effective and customized promotions Account inventory management Cross-dock operations Continuous replenishment Effective logistics and product flows Quick response information sharing Automated order generation Bar-coding and the use of other scanning technology .

Collaborative planning. forecasting and replenishment  Key issue How can collaboration be extended to strategic as to well as operational levels? 1 .

7. CPFR Model Develop front-end agreement Create joint business plans Create individual sales forecasts Identify exceptions to sales forecasts Resolve / collaborate on exception items Create order forecast Identify exceptions to order forecast Resolve / collaborate on exception items Generate orders 4. forecasting and replenishment  Planning 1. Forecasting 6. 3. 2.Collaborative planning. 8. 9. replenishment . 5.

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Wal-mart’s CPFR Process FRONT END AGREEMENT JOINT BUSINESS PLAN Seller Collaborative Planning CREATE SALES FORECAST Collaborative IDENTIFY Link buyer and Seller Goal : EXCEPTIONS Forecasting Electronically RESOLVE EXCEPTIONS CREATE ORDER FORECAST IDENTIFY EXCEPTIONS RESOLVE EXCEPTIONS Collaborative Replenishment Buyer GENERATE ORDER .

because Wal-Mart’s Systems provide increased profits for WalMart and their suppliers  Wal-Mart “teaches” their suppliers how to minimize shipping. inventory and other costs by showing them their own model. . but more importantly.Wal-Mart’s CPFR Program  CPFR has “blurred the lines between supplier and customer”  Suppliers buy into their program because they have to to work with Wal-Mart.

Managing supply chain relationships  Key issue How can broader-based relationships be formed between trading partners in the supply chain? 1 .

Managing supply chain relationships  Creating closer relationships Arm’s length transaction R&D Marketing R&D Partnership Marketing Logistics Information system Operations Information system Logistics Operations InformationInformation system system supplier customer supplier customer Bow tie Diamond .

Managing supply chain relationships  Factors in forming supply chain relationships  The order winner  The method making sourcing decisions  The nature of electronic collaboration  The attitude to capacity planning  Call-off requirements  Price negotiations  Managing product quality  Managing research and development  The level of pressure .

A framework for managing the supply chain  Key issue 1 What are the management implications of integrating the supply chain? .

A framework for managing the supply chain Develop measurement system for supply chain performance Pilot new supply chain solutions 6 4 Organize for supply chain performance 5 Develop a supply chain strategy 1 Gather supply chain information 2 Develop effective partnerships and alliances 3 .

A framework for managing the supply chain  Develop a supply chain strategy  Customer service requirements  Plant and distribution center network design  Inventory management  Outsourcing and third-party logistics relationships  Business processes  Organizational design and training requirements  Performance metrics and goals .

A framework for managing the supply chain  Pilot new supply chain solutions  Successful supply chain improvement including    Involvement of key stakeholders. suppliers. customers and employees Selection of scope and environment. focusing on avoiding risk Identification of the key questions that the pilot must answer .

A framework for managing the supply chain  Develop measurement systems for supply chain performance  On time in full. outbound  On time in full. inbound  Internal defect rates  New product introduction rate  Cost reduction  Stock turns  Order to delivery lead time  Fiscal flexibility .

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