Define SCM Why is it important See text and class notes o Scm is the active management of supply chain activities and relationships in order to maximize customer value and achieve a sustainable competitive advantage A transformation process that produces outputs that have value added to the end user o It is important because it addresses issues like efficiency responsiveness to consumers globalization sustainability and the green supply chain and information technology What will you learn in this course o How to specify how SC managers utilize sourcing manufacturing and customer fulfillment processes to satisfy customers wall st and stakeholders o How to evaluate finance impacts on supply chain decisions o Analyze the impact of effective managerial cost accounting approaches o How to compare marketing operational strategies that impact SC decisions o How to summarize the impact of HR decisions on SCM o Assess the impact of risk and dealing with it o Specify how MIS underpins the supply chain boundary spanning approach What are business processes o products and services who s success is measured by the marketplace o Ex New customer recruitment customer order cycle replenishment cycle manufacturing and assembly cycle procurement cycle in outbound logistics production planning and control customer service after sale support Functional vs process approach Advantages disadvantages o Functional translate business strategy into specific actions for the functional areas such as marketing finance and HR o Process What happens in a transformation process o An organized grouping of activities that together convert inputs into outputs that have value to the end user Flow of transformation of goods from raw materials to the end user o Outputs are defined first o Inputs include energy labor material capital and info Why study Supply Chain Management o 1 Why do organizations exists Make a product deliver a service valued by the customer o 2 Most organizations function as part of a larger supply chain o 3 Goals of a business Prosper and or make a profit Survive perpetuate the business Activities of a supply chain manager o Design products services that customers desire o Determine manufacturing process choices o Manage the sourcing procurement of raw materials vertical make outsource o Integrate planning and scheduling of the production sourcing customer fulfillment processes o Manage warehousing receiving inventory levels and shipments to customers o Provide transportation logistical support across the supply chain o Utilize info technology to enable all of the above processes What are the major supply chain flows o Information technology o Product or service o Cash What are the components of a supply chain o Nodes a special point where goods stop to be either stored or processed Raw material producer manufacturing plant distributor wholesaler retailer customer o Links various modes of transportation o Information systems underpin the integration of nodes and links o sources make deliver return How does the Hershey example illustrate them Procure and schedule raw materials receive verify transfer and pay for it Describe each process in the SCOR Model o Plan Processes establish communicate plans with entire supply chain align SC with financial plan balance supply and demand balance supply resources with demand requirements Manage SC performance data collection inventory capital assets transportation o Source or Procure Processes Identify select supply sources Assess supplier performance Manager supplier networks agreements Vertical virtual integration Make buy decisions o Make Processes select manufacturing process schedule production activities manufacture and test products package and stage product release product deliver mange WIP inventories Manage performance Equipment facilities and production network manage regulatory requirements o Deliver or Customer Fulfillment Processes All order management steps from customer inquiries and quotes to shipments and transportation selection Warehouse management receive and pick product to load and ship Receive and verify product at customer site install if necessary Manage deliver business performance FG inventories capital assets Invoicing transportation etc customer fulfillment o Return Processes All return of defective product steps from authorization to disposition replacement or credit Ditto MRO s and excess products Reverse supply chains Manage return business performance returned inventory transportation network configuration capital assets Sustainable green supply chains CLOSED LOOP o IT Span the whole length of the SC What do we mean when we say a supply chain may look more like a network and not a chain Tradeoffs between performance measures o one of the major components of SCM is learning how to manage tradeoffs Order winners and order qualifiers o Order winners are performance dimensions that differentiate a company products and services from those of its components o Order qualifiers are performance dimensions on which customers expect a minimum level of performance Superior performance on an order qualifier will not by itself give a company a competitive advantage Measures dimensions used to define supply chain success o Within the supply chain process and in products themselves cost quality innovation o Delivery speed time o Flexibility o After sales support o Predictability Explain efficient supply chains o relates to costs Explain responsive supply chains o Safety and environment external and internal o Ability of SC to respond to wide ranges of quantities demanded meet short lead times handle wide variety of products respond to demand supply uncertainty Explain efficient responsive frontier o Maximum value a company can deliver at a given cost Compare efficient vs responsive supply chains o The higher the efficiency of the supply chain the lower the cost o High efficient low cost o low efficient high cost What decisions do managers need to make concerning them List 5 supply chain drivers o Drives activities that are required but incur major costs o quality and customer value metrics price availability on time delivery metrics quality cost fill rate have trade offs o inventory have trade offs o Facilities Nodes Have trade offs o Transportation links Metrics Capacity efficiency cycle time cost Metrics cost size time o Information systems Metrics Forecasts forecast errors reduces costs and increases responsiveness What is forecasting o