CHAPTER 1: PowerPoint Presentation, PPT - DocSlides

CHAPTER 1: PowerPoint Presentation, PPT - DocSlides

2016-07-03 67K 67 0 0


21st-Century Supply Chains. The supply chain revolution. Why integration creates value. Generalized supply chain model. Responsiveness. Financial sophistication. Globalization . Overview of 21. st. -century supply chains. ID: 388302

Direct Link: Embed code:

Download this presentation

DownloadNote - The PPT/PDF document "CHAPTER 1:" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.

Presentations text content in CHAPTER 1:



21st-Century Supply Chains


The supply chain revolutionWhy integration creates valueGeneralized supply chain modelResponsivenessFinancial sophisticationGlobalization

Overview of 21


-century supply chains


Supply Chain ManagementConsists of firms collaborating to leverage strategic positioning and to improve operating efficiencySupply Chain StrategyIs a channel and business organizational arrangement based on acknowledge dependency and collaborationLogisticsThe work required to move and geographically position inventory

The supply chain revolution has reshaped contemporary strategic thinking


Successful supply chain strategies

Source: Supply Chain Management Review, March/ April 2000, p. 29.


The total integration of the overall business process creates value

Table 1.1 Integrative Management Value Proposition


The integrated value-creation process must be managed across firms from end to end

Figure 1.1 The Integrated Supply Chain Framework



Logistics activities and decisions at each level of functionality

Figure 1.2 Information Functionality


Transaction system functionality consists of formalized rules and procedures

Standardized communications focus on tracking and regulating day-to day logistical transactionsFor example, Order entryOrder fulfillmentInventory adjustmentInvoicing


Management control functionality focuses on performance management and reporting

Provides real time feedback on supply chain performance and resource utilizationCommon performance dimensions includeCost Customer serviceProductivityQuality


Decision analysis functionality focuses on software tools to assist managers

Software tools help to identify, evaluate and compare alternatives to improve effectivenessE.g., Excel solverTypes of analysis includeSupply chain designInventory managementResource allocationRoutingSegmental profitabilityAlso called decision support software in MIS departments


Strategic planning functionality transforms transactional data to assist in strategy evaluation

Organizes transaction and performance data into a relational database to assist in evaluating alternative business strategiesExamples includeStrategic alliance decisionsDevelopment of manufacturing capabilitiesCustomer responsiveness opportunities


Figure 1.4 SCIS Usage, Decision Characteristics, and Justification

More opportunities exist for improvements at higher levels of functionality


Supply chain information system modules

Enterprise integration and administration

Enterprise supply chain operations

Enterprise planning and monitoring

Communication technology

Consumer connectivity


Application oriented perspective of SCIS modules

Figure 1.4 Application Oriented SCIS Framework


Enterprise resource management (ERP)

The backbone of most firm’s logistical information systems

Maintains an integrated database of current and historical data

Processes most (if not all) transactions across all business functions

Example transactions include

Order entry and management

Inventory assignment



Enterprise integration and administration modules are not specific supply chain apps

Figure 1.5 Enterprise Integration and Administration Components


Enterprise operations modules support day-to-day supply chain operations

Figure 1.6 Enterprise Operations Modules

Enterprise Operations







© Donald J. Bowersox, Ph.D. 2005



Customer Relationship




Demand Management



Planning, Forecasting

and Replenishment(CPFR)Order Management(OMS)

Finished Inventory Management(FIM)Order Processing(OPS)WarehouseManagement (WMS)TransportationManagement (TMS)Yard Management(YMS)Accounts ReceivableInterface

ManufacturingResource Planning(MRP II)Capacity ManagementPlanning (CMP)Master ProductionSchedule (MPS)Production Executionand Control (Shop Floor)Quality Management (QM)

Purchase OrderAdministration(POA)Materials RequirementsPlanning (MRP)Supplier RelationshipManagement (SRM)Accounts PayableInterface

Integrated Inventory Planning

Advanced Planning and Scheduling\


Enterprise planning and monitoring modules facilitate exchange of planning information

Figure 1.7 Enterprise Planning and Monitoring Modules


Integrative management requires simultaneous achievement of 8 processes

Table 1.2 Eight Supply Chain Processes


Concepts necessary for achieving integrated management

Lowest total process cost

is the focus of integrated management

Differs from lowest cost of each function in the process


of operating information, technology and risk has been encouraged by national legislation to keep US-based firms competitive

Enterprise extension

includes expanded managerial influence and control beyond traditional ownership boundaries of a single enterprise

Integrated service providers (ISP)

provide a range of logistics services to accommodate customers, ranging from order entry to product delivery

Commonly known as third (or fourth) party service providers


Enterprise extension

Information sharing paradigm – supply chain participants sharing operating information can achieve a high degree of collaboration and enhanced strategic planning.

Process specialization paradigm – the commitment to focus collaborative arrangements on planning joint operations with a goal of eliminating nonproductive or non-value adding redundancy by firms in a supply chain.


Integrated service providers (ISPs)


Transportation modes

Public warehouses

Value-added services

Third- and fourth-party service providers

Asset- or nonasset-based service providers


Forces driving supply chain strategies

Information technologyIntegrative managementResponsivenessFinancial sophisticationGlobalization


Responsiveness emerges as a competitive advantage

Figure 1.8 Anticipatory Business Model

Figure 1.9 Responsive Business Model


Postponement strategies keep supply chains responsive

Types of Postponement

Manufacturing (or Form)

Geographic (or Logistics)


Manufacturing and geographic types are exact opposites in practice but have the same goal

Meeting customer demand quickly while minimizing inventories


Manufacturing (or form) postponement

Manufacturing one order at a time

Base modular construction of product

No customization until the exact customer specs and financial commitment is received

Objective is to maintain products in an uncommitted status as long as possible

Balances economy of scale with responsiveness

Can build a sufficient quantity of “ready to customize” basic units

Requires a lot of forethought during product design


Example of manufacturing postponement

Keeping all the car panels a base color (white or gray) until the order is received, then painting to the color ordered


Geographic (or logistics) postponement

Build or stock a full-line inventory at one or a few strategic locations

Forward deployment of inventory is postponed until customer orders are received

Once orders received, specific item is expedited to the local distributor

Advantages are manufacturing economies of scale along with responsiveness to customer

Often used for critical, high cost parts and assemblies (e.g. engines)


Example of geographic postponement

Keeping full inventory in a central warehouse and releasing customer orders to local distributors or direct shipping to customer


Combined postponement

Keeping the basic products centralized and performing the customization at the destination distributor

Historical example - Autos

Installing dealer options like sound systems, GPS, sun roofs on new cars purchased

Contemporary example - Computers

Dell Computers, doing final assembly or packaging additional system options like printers, digital cameras at a distribution center


Barriers to implementing responsive systems

Need for publicly held corporations to maintain planned quarterly profitsExpectations of continued financial results often drive promotional and pricing strategies to “load the channel” with inventory Need to establish collaborative relationshipsMost business managers do not have training or experience in development of collaborative arrangements


Financial sophistication enables measurement of time-based supply chain

Cash-to-Cash Conversion—the time required to convert raw material or inventory purchases into sales revenueDwell Time Minimization—dwell time is the ratio of time that an assets sits idle to the time required to satisfy its supply chain missionCash Spin—reducing assets in the supply chain can “spin” cash for reinvestment in other projects


Globalization offers firms several attractive opportunities

Demand exceeds local supply90% of global demand is not fully satisfied by local supplyStrategic sourcingIdentifying and matching the sources of raw materials and components to manufacturers and distributorsOffshoringMoving manufacturing and distribution operations to countries with favorable labor costs and tax laws


Significant differences for global logistics


of typical order-to-delivery operations is significantly longer compared to domestic business


requirements for business transactions is significantly more complex

Operations must be deal with significant


in work practices and local operating environments

How consumers


products and services must accommodate cultural variations



About DocSlides
DocSlides allows users to easily upload and share presentations, PDF documents, and images.Share your documents with the world , watch,share and upload any time you want. How can you benefit from using DocSlides? DocSlides consists documents from individuals and organizations on topics ranging from technology and business to travel, health, and education. Find and search for what interests you, and learn from people and more. You can also download DocSlides to read or reference later.