16-1 Supply Chain Management

Supply Chain Management

16-2 Supply Chain Management

Basic Supply Chain

(for Manufacturing Industry)

The Basic Supply Chain (Chopra and Meindl,

2001)
16-3 Supply Chain Management

Basic Supply Chain

(for Service Industry)

Supplier Service Provider Customer Consumer

Raw Finished
Materials Products
16-4 Supply Chain Management

Supply Chain Management

Supply Chain: The sequence of organizations -
their facilities, functions, and activities - that are
involved in producing and delivering a product or
service.
16-5 Supply Chain Management

Facilities
 Warehouses
 Factories

 Processing centers

 Distribution centers

 Retail outlets

 Offices
16-6 Supply Chain Management

Functions and Activities

 Forecasting
 Purchasing

 Inventory management

 Information management

 Quality assurance

 Scheduling

 Production and delivery

 Customer service
16-7 Supply Chain Management

Evolutionary Timeline of SCM

(Habib and Jungthirapanich, 2009)

O’Brien and Kenneth (1996) : Education, but there was no model.

Lau (2007): Education, but case study on City University of Hong Kong
Habib (2009): Integrated Tertiary Educational Supply Chain Management (ITESCM)
16-8 Supply Chain Management

Decision Phases of a Supply Chain

 Strategy or Design
 Planning

 Operation

Level-One
Strategy

Level-Two Planning
Level-Three Operation
16-9 Supply Chain Management
Level One
Supply Chain Strategy or Design
 Structure of the supply chain

 Strategic supply chain decisions

 Locations and capacities of facilities
 Products to be made or stored at various locations

 Modes of transportation

 Information systems

 Supply chain design must support strategic objectives

 SC design decisions are long-term and expensive to
reverse
 Level Two
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Supply Chain Planning

 A set of policies that govern short-term operations
 Fixed by the SC design (strategy)

 Starts with a forecast of demand for the coming year

 Level Two
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Supply Chain Planning

 Planning decisions:
 Which markets will be supplied from which locations
 Planned buildup of inventories
 Subcontracting, backup locations
 Inventory policies
 Timing and size of market promotions
 Must consider demand uncertainty, exchange rates,
competition over the time horizon
16-12 Supply Chain Management
Level Three
Supply Chain Operation
 Time horizon is weekly or daily
 Decisions about individual customer orders
 Configuration is fixed and operating policies are
determined
 Goal is to implement the operating policies as
effectively as possible
 Allocate orders to inventory or production, set order due
dates, generate pick lists at a warehouse, allocate an
order to a particular shipment, set delivery schedules,
place replenishment orders
 Much less uncertainty (short time horizon)
16-13 Supply Chain Management

A Framework for Structuring Drivers

Competitive Strategy

Supply Chain
Strategy
Efficiency Responsiveness
Supply chain structure

Logistical Drivers

Facilities Inventory Transportation

Information Sourcing Pricing

Cross Functional Drivers

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16-14 Supply Chain Management

Drivers of Supply Chain Performance

 Facilities
 places where inventory is stored, assembled, or fabricated
 production sites and storage sites
 Inventory
 raw materials, WIP, finished goods within a supply chain
 inventory policies
 Transportation
 moving inventory from point to point in a supply chain
 combinations of transportation modes and routes
 Information
 data and analysis regarding inventory, transportation, facilities throughout the supply chain
 potentially the biggest driver of supply chain performance
 Sourcing
 functions a firm performs and functions that are outsourced
 Pricing
 Price associated with goods and services provided by a firm to the supply chain

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