Supply Chain Management

Transcription

1 Supply Chai Maagemet LOA Uiversity October 9, 205 Distributio D Distributio Authorized to Departmet of Defese ad U.S. DoD Cotractors Oly Aim High Fly - Fight - Wi

2 Who am I? Dr. William A Cuigham PhD Ecoomics Uiversity of Arkasas MS Ecoomics Oklahoma State Uiversity BSBA (Ecoomics Major), Missouri Souther State Uiversity Cotact: ext 4283 Aim High Fly - Fight - Wi

3 What is a supply chai? Network of orgaizatios: Raw materials providers Maufacturers Wholesalers ad distributors ad Retailers Service Providers Coected by forward ad reverse flows of goods, iformatio, ad eablig resources All iterested i creatig value for the ultimate customer Aim High Fly - Fight - Wi

4 What Supply Chai Maagemet Is Not It is ot aother ame for logistics. It is ot aother ame for purchasig. It is ot aother ame for operatios. It is ot a combiatio of logistics, purchasig ad operatios. Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace.

5 Supply Chai Maagemet is the maagemet of relatioships i the etwork of orgaizatios, from ed customer through origial suppliers, usig key crossfuctioal busiess processes to create value for customers ad other stakeholders. [The Iteratioal Ceter for Competitive Excellece, 994] [The Global Supply Chai Forum, 998] Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace, p. 2.

6 The Supply Chai Maagemet Processes Iformatio Flow Supply Chai Maagemet Processes Tier 2 Supplier PRODUCT FLOW Tier Supplier Maufacturer Logistics Purchasig Marketig & Sales Productio Fiace R&D CUSTOMER RELATIONSHIP MANAGEMENT SUPPLIER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FULFILLMENT MANUFACTURING FLOW MANAGEMENT PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS MANAGEMENT Cosumer/ Ed user Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace, p. 3.

7 Types of Iter-compay Busiess Process Liks Tier 3 to Iitial suppliers Tier 2 Suppliers Tier Suppliers Tier s Tier 2 s Tier 3 to Cosumers/ Ed-users 2 2 Iitial Suppliers Tier 3 to suppliers Tier 3 to customers Cosumers/Ed-users Maaged Process Liks Moitored Process Liks Not-Maaged Process Liks No-Member Process Liks Focal Compay Members of the Focal Compay s Supply Chai No-members of the Focal Compay s Supply Chai Aim High Fly - Fight - Wi

8 The SCM Processes - Briefly The Relatioship Maagemet process provides the structure for how the relatioship with customers will be developed ad maitaied. The Supplier Relatioship Maagemet process provides the structure for how the relatioships with suppliers will be developed ad maitaied. Service Maagemet is the process that deals with the admiistratio of the PSAs developed by customer teams as part of the CRM process. Demad Maagemet is the process that balaces the customers requiremets with the capabilities of the supply chai. Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace.

9 The SCM Processes - Briefly The Order Fulfillmet process icludes all activities ecessary to desig a etwork ad eable a firm to meet customer requests while miimizig the total delivered cost. The Maufacturig Flow Maagemet process icludes all activities ecessary to obtai, implemet ad maage maufacturig flexibility i the supply chai ad to move products through plats. The Product Developmet ad Commercializatio process provides the structure for developig ad brigig to market products joitly with customers ad suppliers. Returs Maagemet is the process by which activities associated with returs, reverse logistics, gatekeepig ad avoidace are maaged withi the firm ad across key members of the supply chai. Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace.

10 Processes Need to Be Stadardized to Avoid Discoects Iformatio Flow Tier 2 Supplier Tier Supplier Purchasig Maufacturer Logistics Marketig & Sales Cosumer/ Ed user PRODUCT FLOW Productio R&D Fiace CUSTOMER RELATIONSHIP MANAGEMENT SUPPLIER RELATIONSHIP MANAGEMENT CUSTOMER SERVICE MANAGEMENT DEMAND MANAGEMENT ORDER FULFILLMENT MANUFACTURING FLOW MANAGEMENT PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS MANAGEMENT Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace, p. 4.

11 All Fuctios Need to Be Ivolved Busiess Fuctios Busiess Processes Marketig Sales Research & Developmet Logistics Productio Purchasig Fiace Relatioship Maagemet Marketig Pla & Resources Accout Maagemet Techological Logistics Maufacturig Sourcig Profitability Supplier Relatioship Maagemet Required for Competitive Positioig Sales Growth Opportuities Material Specificatios Iboud Material Flow Itegrated Plaig Supplier Total Delivered Cost SUPPLIERS Service Maagemet Demad Maagemet Order Fulfillmet Maufacturig Flow Maagemet Prioritizatio of s Competitors Iitiatives Role of Logistics Service i Marketig Mix Differetiatio Opportuities from Maufacturig Kowledge of Operatios Competig Programs i Space Kowledge of Requiremets Kowledge of Requiremets Techical Service Process Requiremets Evirometal Requiremets Desig for Maufacturability Aligmet of Logistics Activities Forecastig Network Desig Prioritizatio Criteria Coordiated Executio Maufacturig Made-to- Order Productio Plaig Priority Assessmet Sourcig Material Costraits Itegrated Supply Cost-to- Serve Tradeoff Aalysis Distributio Cost Maufacturig Cost CUSTOMERS Product Developmet & Commercializatio Product/Service Gaps i Market Opportuities Product Desig Logistics Requiremets Process Specificatios Material Specificatios R & D Cost Returs Maagemet Kowledge of Marketig Programs Kowledge Product Desig Reverse Logistics Remaufacturig Material Specificatios Reveue Costs & Iformatio Architecture, Data Base Strategy, Iformatio Visibility Note: Process sposorship ad owership must be established to drive the attaimet of the supply chai visio ad elimiate the fuctioal barriers that artificially separate the process flows. Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - Wi Processes, Parterships, Performace, p. 5.

12 The Critical Supply Chai Maagemet Likages Supplier D CRM SRM Maufacturer C CRM SRM Wholesaler/ Distributor B CRM SRM Retailer/ Ed User A P&L for C as customer Total Cost Report for D as supplier P&L for B as customer P&L for C as supplier P&L for A as customer P&L for B as supplier Reveue - Cost Profit Cost = Profit Reveue - Cost Profit Reveue - Cost Profit Reveue - Cost Profit Reveue - Cost Profit Supply Chai Performace = Icrease i Profit for A, B, C, ad D Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace, p. 6.

13 It Is Critical to Measure the Fiacial Impact The developmet of customer profitability reports eables the CRM process teams to track performace over time. More profitable customers will be allocated more resources. Similarly, wholesalers ad retailers should use profitability reports to evaluate suppliers, but maufacturers should use total cost reports to evaluate suppliers. The performace of each process should be measured Air Uiversity: i terms The Itellectual of ad its Leadership impact Ceter of the Air o ForceEVA. Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace.

14 How CRM Affects EVA ECONOMIC VALUE ADDED = NET PROFIT MARGIN COST OF CAPITAL NET PROFIT NET SALES CAPITAL CHARGE % TOTAL ASSETS GROSS MARGIN TOTAL EXPENSES CURRENT ASSETS + FIXED ASSETS SALES CGS INVENTORY + OTHER CURRENT ASSETS Stregthe relatioships with profitable customers Sell higher margi products Improve share of customer Improve mix ( e.g. alig services ad costs to serve) Improve plat productivity Targeted marketig Improve trade spedig Elimiate or reduce services provided to low-profit customers Optimize physical etwork/facilities Leverage ew or alterative distributio chaels Reduce customer service & order maagemet costs Reduce HR costs / improve effectiveess Reduce overhead / maagemet / admi. costs Improve demad plaig Reduce safety stock Make to order, mass customizatio of ivetories Reduce accouts receivable Improve asset utilizatio ad ratioalizatio Improve product developmet ad asset ivestmet Improve ivestmet plaig ad deploymet Supply Chai Maagemet Istitute. Aim Source: High Fly Supply Chai - Fight Maagemet: - Wi Processes, Parterships, Performace, p. 8.

15 Buildig High-Performace Supply Chai Relatioships Supply chai maagemet is all about relatioship maagemet. Parterships require sigificat ivestmet, so the goal is to fit the type of relatioship to the busiess situatio. Maagemet Tools: The partership model assists with determiig the right level of partership betwee two orgaizatios. The collaboratio framework assists with structurig of relatioships whe symmetry ad/or workig history are lackig betwee orgaizatios. Aim High Fly - Fight - Wi

16 Supply Chai Maagemet: Elemets ad Key Decisios Supply Chai Maagemet Processes 2) What processes should be liked with each of these key supply chai members? Supply Chai Maagemet Compoets Supply Chai Network Structure 3) What level of itegratio ad maagemet should be applied for each process lik? ) Who are the key supply chai members with whom to lik processes? Supply Chai Maagemet Istitute. Source: Aim Supply High Fly Chai Maagemet: - Fight - WiProcesses, Parterships, Performace, p. 2.

17 Coclusios Supply chai maagemet is ot just aother ame for logistics, or a combiatio of logistics, purchasig ad operatios. It is a way of doig busiess that is: Process-orieted Cross-fuctioal Cross-firm The partership model helps firms maage the most importat busiess relatioships with customers ad suppliers. Aim High Fly - Fight - Wi