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Supply Chain Resource Planning and Management Practices

John Wu, Ph.D.

Professor of Supply Chain and Transportation CSU San Bernardino

Gearing Up to Meet Customer Demands

Objective: Organizations exist to create value and meet customer demands. We have learned about the evolution of supply chain, the value chain concept, evolving competition patterns, the positive economic benefits and negative environmental impacts of our activities, performance measurements, different ways to make products or provide services, designs, quality assurance, lean philosophy, and inventory. Now its time to learn about a few trends and management practices in SCM

Enterprise Resources Planning (ERP)

Organizations have resources at their disposal. Effective organizations use these resources efficiently to satisfy customers. ERP is a centralized system that integrates information and activities of all departments and functions across a company to serve all of the enterprises needs Results Reduced transaction costs and faster response time within the organization Shorter lead time, higher productivity

Changing Faces of Manufacturing

From vertically integrated manufacturing to specialized manufacturing From in-sourcing to outsourcing or offshoring that exports jobs to developing countries The U.S. became a country with cheap labor Development in technologies (robots, automation, CAD/CAM, 3D printing, etc.) and new product designs are bringing manufacturing back to the U.S. (re-shoring) Demand for responsive global supply chain becomes inevitable

More Contract Manufacturing

A contract manufacturer is a firm that specializes in certain types of goods-producing activities, such as customized design, manufacturing, assembly, and packaging, and works under contract for end users. Benefits of using contract manufacturing: Access to advanced manufacturing technologies Faster product time-to-market Customization of goods in regional markets Lower total costs resulting from economies of scale

Who handles activities between the company and contract manufacturers? Yes, SCM!

Logistics Can Also Be Outsourced

Outsourcing: A practice used by companies to reduce
costs, improve quality, or enable capabilities by transferring portions of work to outside suppliers rather than completing it internally.

Logistics outsourcing: A company uses a logistic service

provider (LSP or 3PL) to provide basic and customized logistics services, which may be broad range activities characterized by a long-term and strategic relationship. Transportation services (TMS): Freight brokering and consolidation services, fleet management & tracking, inbound and outbound freight management Warehousing (WMS) and distribution: order fulfillment, consolidation, break-bulk operations, transloading, crossdocking

Multi-modal Logistics Networks

Objective: Using various transportation means to minimize costs and maximize efficiency.

Logistics Networks: Appliances

Postponement and Reverse Logistics

Postponement is the process of delaying product customization until the product is closer to the customer at the end of the supply chain. Example: T-shirt shops stock up on generic color tshirts then print custom logos when an order is in. Reverse logistics refers to managing the flow of finished goods, materials, or components that may be unusable or discarded through the supply chain from customers for reuse, resale, or disposal.

Postponement opportunities

Reverse logistics activities

Reverse Logistics Network

Vendor Managed Inventory (VMI)

VMI is where the vendor (e.g. a consumer goods manufacturer) monitors and manages the inventory for the customer (e.g. a grocery store). Chevron monitors gasoline levels then delivers fuels to gas stationsautomatically. Pepsi comes into Ralphs to restock Vendors love to do more for customers through VMI.

Common SCM Practices

Integrate and consolidate activities in all departments at all levels Outsource or use temps rather than do-it-yourself during demand peaks Buy rather than make production inputs and services Configure optimal transportation and logistics plans Create strategic partnerships with fewer suppliers Use lean and JIT to purchasing and inventory management Use IT throughout and analyze the big data to gain insights Evaluate system-wide performance vs. local (functional/departmental) optimization

Who is responsible for making sure all products face front and store is fully stocked?

Who is responsible for empty shelves?