Supply Chain Management

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1 Supply Chai Maagemet Douglas M. Lambert, Ph.D. The Raymod E. Maso Chaired Professor ad Director, The Global Supply Chai Forum

2 Supply Chai Maagemet is NOT a New Name for Logistics

3 The Begiig of Wisdom Is To Call Thigs By Their Right Names -Cofucius

4 The 990s ad 2000s: A Era of Termiology Explosio & Cofusio Supply Chai is ot the oly term We have edured: Demad Chai Supply-Demad Chai Value Chai Value-added Networks Each istace claimed to be breakthrough thikig The Culprits (most well meaig but some self servig) Cosultats who try to differetiate their offerig based o what they call it istead of how well they help cliets do it Academics who wat to appear curret by usig ew termiology Software Vedors

5 Supply Chai Maagemet (Name Acceptace) Professioals have adopted the ame Procuremet specialists Maufacturig specialists Distributio specialists Now, they all claim to be supply chai professioals Uiversities have adopted the ame May reame logistics programs to supply chai Others combie purchasig, operatios maagemet, ad logistics faculties Cosultats & Software firms have adopted the ame extesively. This is what they sell.

6 Supply Chai Maagemet Is As Good As Ay Name: WHY?? A supply chai is a etwork of compaies. Every compay i the etwork gais its reveue based o demad from the ed customer. Thus, every orgaizatio i the etwork gais it s reveue from ad is a supplier to the ed customers, ad for this reaso, supply chai maagemet is as good a ame as ay other. The etwork ca focus o demad without chagig the ame to demad chai. The etwork ca focus o value co-creatio without chagig the ame to value chai or value-addig etwork. It is time to pick a ame a get o with implemetatio.

7 Supply Chai Maagemet Network of compaies Eight macro-busiess processes Cross-fuctioal itegratio Cross-firm itegratio Value co-creatio

8 Supply Chai Maagemet Itegratig ad Maagig Busiess Processes Across the Supply Chai Source: Douglas M. Lambert, Editor, Supply Chai Maagemet: Processes, Parterships, Performace, Third Editio, Sarasota, FL: Supply Chai Maagemet Istitute, 2008, p. 3.

9 Iitial Suppliers Cosumers/Ed-users Types of Iter-compay Busiess Process Liks Tier 3 to Iitial suppliers Tier 2 Suppliers Tier Suppliers Tier Customers Tier 2 Customers Tier 3 to 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 Source: Douglas M. Lambert, Editor, Supply Chai Maagemet: Processes, Parterships, Performace, Third Editio, Sarasota, FL: Supply Chai Maagemet Istitute, 2008, p. 4.

10 SUPPLIERS CUSTOMERS Fuctioal Ivolvemet i the Supply Chai Maagemet Processes Busiess Fuctios Busiess Processes Customer Relatioship Maagemet Marketig Marketig Pla & Resources Sales Accout Maagemet Research & Developmet Techological Logistics Logistics Capabilitie s Productio Maufacturig Purchasig Sourcig Fiace Customer Profitability Supplier Relatioship Maagemet Required for Competitive Positioig Sales Growth Opportuities Material Specificatios Iboud Material Flow Itegrated Plaig Supplier Total Delivered Cost Customer Service Maagemet Prioritizatio of Customers Kowledge of Customer Operatios Techical Service Aligmet of Logistics Activities Coordiated Executio Priority Assessmet Cost-to- Serve Demad Maagemet Competitors Iitiatives Competig Programs i Customer Space Process Requiremets Forecastig Maufacturig Sourcig Tradeoff Aalysis Order Fulfillmet Role of Logistics Service i Marketig Mix Kowledge of Customer Requiremets Evirometal Requiremets Network Desig Made-to- Order Material Costraits Distributio Cost Maufacturig Flow Maagemet Differetiatio Opportuities from Maufacturig Kowledge of Customer Requiremets Desig for Maufacturability Prioritizatio Criteria Productio Plaig Itegrated Supply Maufacturig Cost Product Developmet ad Commercializatio Product/Service Gaps i Market Customer Opportuities Product Desig Logistics Requiremets Process Specificatios Material Specificatios R & D Cost Returs Maagemet Kowledge of Marketig Programs Customer Product Reverse Re- Material Logistics Iformatio Kowledge Architecture, Desig Data Base Strategy, Iformatio maufacturig Visibility 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. Source: Douglas M. Lambert, Editor, Supply Chai Maagemet: Processes, Parterships, Performace, Third Editio, Sarasota, FL: Supply Chai Maagemet Istitute, 2008, p. 8.

11 CRM ad SRM Form the Liks i the Supply Chai CRM Supplier Customer Service Maagemet Demad Maagemet Order Fulfillmet Maufacturig Flow Maagemet Product Developmet ad Commercializatio Returs Maagemet Customer SRM Copyright, 200, Douglas M. Lambert

12 Customer Relatioship Maagemet (CRM) & Supplier Relatioship Maagemet (SRM): 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 Source: Douglas M. Lambert, Editor, Supply Chai Maagemet: Processes, Parterships, Performace, Third Editio, Sarasota, FL: Supply Chai Maagemet Istitute, 2008, p. 0.

13 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? Source: Douglas M. Lambert, Editor, Supply Chai Maagemet: Processes, Parterships, Performace, Third Editio, Sarasota, FL: Supply Chai Maagemet Istitute, 2008, p. 4.

14 For more iformatio see:

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