Slide 1CM4120 Chemical Plant Operations Lab Introduction to Supply Chain ManagementSlide 3Slide 4Slide 5Slide 6CM4120 Chemical Plant Operations Lab Introduction to Supply Chain ManagementSlide 8Slide 9Slide 10Slide 11Slide 121-Quality Manufacturing-Supply Chain ManagementCM4120Chemical Plant OperationsD. Caspary2CM4120Chemical Plant Operations LabIntroduction to Supply Chain ManagementHistorically the manufacturing operation was treated/protected as an islandisolated to protect manufacturing from business fluctuationsisolated to maintain secrecy from competitorsisolated to protect turf3CM4120Chemical Plant Operations LabIntroduction to Supply Chain ManagementA quote from:The Germ Theory of Management Myron TribusDirector of the American Quality and Productivity InstituteCopyright 1995-2000 by Deming Electronic Network – all rights reserved4CM4120Chemical Plant Operations LabIntroduction to Supply Chain ManagementSome newer concepts for (Chemical) Manufacturing:Quality ManufacturingBuild-to-orderJust-in-time deliveryEstablish “trust” relationships with suppliers and customersISO CertificationPSMSupply Chain Management5CM4120Chemical Plant Operations LabIntroduction to Supply Chain ManagementWhat do we mean by the Supply Chain?Concerns the flow of material from procurement to delivery of finished productspurchasingreceivingwarehousingprocessingpackagingshipping6CM4120Chemical Plant Operations LabIntroduction to Supply Chain ManagementWhat do we mean by the Supply Chain?Concerns the flow of information through business processessourcingplanningtechnology solutionsinventory managementsales, marketing, and advertisingorder fulfillmentcustomer service7CM4120Chemical Plant Operations Lab Introduction to Supply Chain ManagementWhy manage the supply chain?U.S. Chemical Industry is $400 billion/yr. in salesBetter management of supply chain yields 7.5% of sales in savings for typical chemical manufacturer$30 billion/yr. potential savings8CM4120Chemical Plant Operations Lab Introduction to Supply Chain ManagementWhere do gains come from?It is estimated that U.S. CPI has 80 days inventoryReduce inventory by 50% and save 30% of the value of inventoryEstimated savings are $20 billion/yr.9Where do gains come from?Typical cash-to-cash cycle time is 6 monthsBest-in-class implementations will reduce cash-to-cash cycle time to 30 daysCM4120Chemical Plant Operations Lab Introduction to Supply Chain Management10CM4120Chemical Plant Operations Lab Introduction to Supply Chain ManagementWhere do gains come from?Automation of business processesOpen communications w/ suppliersOpen communications w/ customers11CM4120Chemical Plant Operations Lab Introduction to Supply Chain ManagementAdvancements in computing technology enable improvements in business efficiency and Supply Chain Managementcomputing hardware and software technologiesnetworked computer systems and WWWdatabase systems12CM4120Chemical Plant Operations Lab Introduction to Supply Chain ManagementSoftware management tools availableSAP, i2, iBaan, othersmanages everything from order entry to invoiceprovides links to suppliers and customersRequire that all relevant data at all levels of the business be available in real