Supply Chain Management

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1 Supply Chain Management อาจารย ดร.อ ศว ณ ปส ธรรม

2 Supply Chain the sequence of organizations (their facilities, functions, and activities) that are involved in producing and delivering a product or service 11-2

3 Facilities Warehouses Factories Processing centers Distribution centers Retail outlets Offices 11-3

4 Functions and Activities Forecasting Purchasing Inventory management Information management 11-4

5 Functions and Activities Quality assurance Scheduling Production and delivery Customer service 11-5

6 Typical Supply Chains Purchasing Production Distribution Receiving Storage Operations Storage 11-6

7 Typical Manufacturing Supply Chain } Supplier Supplier Storage Mfg. Supplier Storage Dist. Retailer Customer 11-7

8 Typical Service Supply Chain } Supplier Storage Service Supplier Customer 11-8

9 Value Chains SC are sometimes referred to as value chains. The concept that value is added as goods and services progress through the chain. Comprise of separate business organizations rather than just a single organization Two components for each organization: supply component and demand component 11-9

10 Value Chains 11-10

11 Need for Supply Chain Management 1. Improve operations 2. Increasing levels of outsourcing 3. Increasing transportation costs 4. Competitive pressures 5. Increasing globalization 11-11

12 Need for Supply Chain Management 6. Increasing importance of e-business 7. Complexity of supply chains 8. Manage inventories 9. Green supply chains 11-12

13 Bullwhip Effect Demand Initial Supplier Final Customer 11-13

14 Benefits of Supply Chain Management Lower inventories Higher productivity Greater agility Shorter lead times Higher profits Greater customer loyalty 11-14

15 Elements of Supply Chain Management Element Customers Forecasting Design Processing Inventory Purchasing Suppliers Location Logistics Typical Issues Determining what customers want Predicting quantity and timing of demand Incorporating customer wants, manufacturing, and time Controlling quality, scheduling work Meeting demand while managing inventory costs Evaluating suppliers and supporting operations Monitoring supplier quality, delivery, and relations Determining location of facilities Deciding how to best move and store materials 11-15

16 Logistics The movement of materials, service, cash, and information in a supply chain Include movement within a facility, incoming and outgoing shipments, and information flow throughout the supply chain 11-16

17 Movement within a Facility 11-17

18 Distribution Requirements Planning A system for inventory management and distribution planning Extends the concepts of MRP Uses DRP to plan and coordinate transportation, warehousing, workers, equipment, and financial flows 11-18

19 Reverse Logistics The backward flow of goods returned to the supply chain Processing returned goods includes sorting, examining/testing, restocking, repairing, reconditioning, recycling, and disposing

20 Key Elements of Managing Returns Gatekeeping - Screening goods to prevent incorrect acceptance of goods Avoidance - Finding ways to minimize the number of items that are returned 11-20

21 e-business The use of electronic technology to facilitate business transactions Applications include - Internet buying and selling - - Order and shipment tracking - Electronic data interchange 11-21

22 Advantages of e-business Have a global presence Improve competitiveness and quality Analyze customer interests Collect detailed information 11-22

23 Advantages of e-business Shorten supply chain response times Realize substantial cost savings Create virtual companies Level the playing field for small companies 11-23

24 Disadvantages of e-business Customer expectations - Order quickly expects fast delivery Order fulfillment - Order rate often exceeds ability to fulfill it Inventory holding - Outsourcing loss of control - Internal holding costs 11-24

25 Effective Supply Chain Requires linking the market, distribution channels, processing, and suppliers Should enable members to: - Share forecasts - Determine the status of orders in real time - Access inventory data of partners 11-25

26 Requirements for Successful Supply Chain Trust among trading partners Effective communications Supply chain visibility Event-management capability Performance metrics 11-26

27 RFID Technology Used to track goods in supply chain RFID tag attached to object Similar to bar codes but uses radio frequency to transmit product information to receiver RFID eliminates need for manual counting and bar code scanning 11-27

28 Creating an Effective Supply Chain 1. Develop strategic objectives and tactics 2. Integrate and coordinate activities in the internal supply chain 3. Coordinate activities with suppliers and customers 4. Coordinate planning and execution across the supply chain 5. Form strategic partnerships 11-28

29 Supply Chain Performance Drivers 1. Quality 2. Cost 3. Flexibility 4. Velocity 5. Customer service 11-29

30 Velocity Inventory velocity - The rate at which inventory (material) goes through the supply chain Information velocity - The rate at which information is communicated in a supply chain 11-30

31 Challenges Barriers to integration of organizations Getting top management on board Dealing with trade-offs Small businesses Variability and uncertainty Long lead times 11-31

32 Purchasing Responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service Purchasing cycle begins with a request for purchase and ends with notification of shipment received in satisfactory condition

33 Duties of Purchasing Identifying sources of supply Negotiating contracts Maintaining a database of suppliers Obtaining goods and services Managing supplies 11-33

34 Purchasing Interfaces Operations Legal Purchasing Accounting Data processing Suppliers Receiving Design 11-34

35 Centralized vs. Decentralized Purchasing Centralized purchasing - Purchasing is handled by one department Decentralized purchasing - Individual departments or separate locations handle their own purchasing requirements 11-35

36 Suppliers Management Choosing suppliers Evaluating sources of supply Supplier audits Supplier certification Supplier relationships Supplier partnerships 11-36

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