INTEGRATION TOOLS Supply Chain Management SCM 1 2 Customer Relationship Management CRM 3 Enterprise Resource Planning ERP The supply chain SCM has three main links 1 Materials flow from supplier and their upstream suppliers at all levels inbound 2 Transformation of materials into semi finished and finished products through the organizations own production process 3 Distribution of products to customers and their downstream customers at all levels outbound need for cross functional management work gets done horizontally this is internal SCM Example Supply Chain Management SCM the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability Key words LINKAGE COLLABORATION o Linking with our partners or suppliers and collaborating with our customers which makes things more transparent DELL MODEL One of the largest PC manufacturer s Largest DIRECT PC manufacturer o Sells directly to customers bypassing retailers and passes on the savings Less inventory and faster deliveries than its competitors Pure play business company one of the very few internet companies who were doing this What rules did Dell break You can t customize every order for every customer so offer pre configured models that cant be changed Retailers recommend specific models to customers so the channel cannot be bypassed Dell looked a this brick and mortar and looked to change this and go directly to the customer pure play o SWOT analysis Strengths Sell directly to customer and do it at lower cost and pass on savings Weaknesses No brand recognition associated with Dell no one knew of them when they were launched No relationships with retail outlets Opportunities Threats Where is the value Traditional PC value chain Step in value chain component suppliers manufacturer retailer customer Example company Products and price Value Added Intel Microsoft Chips 500 Software 500 R D New features IBM Compaq Hewlett Packard Computer city future shop Individuals corporations PC 1500 PC 1750 Assembly Selection Advice Dell is not in manufacturing mix and has no relationship with retailer or brand recognition Direct PC Value Chain Step in value chain component suppliers manufacturer retailer customer Example company Intel Microsoft DELL Individuals corporations Products and price Chips 500 Software 500 Value added R D New features Business Models PC 1600 Assembly Selection advice A conceptual framework that expresses the underlying economic logic and system that prove how a business can deliver value to customers at an appropriate cost and make money Specifies what value to offer customers and which customers to provide this value to using which products and services at what prices Specifies how the business will organize and operate Focuses attention on how all the essential components fit into a complete system Key questions 1 Who are my customers 2 What do customers value 3 How much will it cost to deliver value to customers 4 How do we make money in this business Business models have a lifecycle that lasts forever Article in businessweek new business strategy PC business is struggling global shipments are down Asia Pacific shipments are higher 2 out of 3 dell business clients start as PC buyers and use PC as a launch pad Dell had a great business model all business models run out of gas opt to reinvent themselves Five basic supply chain activities Create network in case of customer service issues Better get it right the first time second if it does occur then give them free shipping and make it easy for the return Have to do it because brick and mortar you just walk in so its simple and easy so need to match this convenience Financial Flow Material Flow Returns Information Flow 11 companies each box and the manufacturer is us therefore need to get the supply chain right because many players The Benefits of SCM 1 Improved Visibility Bullwhip effect the ability to view all areas up and down the supply chain in real uses advanced mathematical algorithms to improve the Supply chain visibility time Supply chain planning system flow and efficiency of the supply chain while reducing inventory Supply chain execution system occurs when distorted product demand information ripples from one partner to the next through the supply chain Small ripple at the retailer then all of a sudden amplifies itself big idea is visibility can eliminate the bullwhip effect and eliminates extra inventory Supply chain planning and execution automates the different activities of the supply chain 2 Improved profitability Companies can respond faster and more efficiently through supply chain enhances Demand planning system generates demand forecasts using statistical tools and forecasting techniques so companies can respond faster and more effectively to consumer demands through supply chain enhancements Common supply chain metrics include Back order Inventory cycle time Customer order cycle time Inventory turnover turned over into a sale unfilled customer orders for products that are out of stock time to manufacture all the way through delivery time from the purchase agreement to delivery inventory replacement how many times inventory is being The challenges of SCM Primary challenges include COST an SCM system can cost millions of dollars for the software and millions more for help implementing the system Better have good ROI for this investment to offset costs COMPLEXITY the move towards globalization is increasing complexity in the supply chain Cross functional and cross company The complexity to be concurred allows these benefits to be received The future of SCM Collaborative demand planning Collaborative engineering Selling chain management Supply chain management Supply chain event management SCEM Supply chain management business analytics Act quickly predict to prevent anything from happening Linkage Collaboration Customer Relationships CRM What happens if our customers are not satisfied and relationships are poor What happens if our customers are delights and relationships are great What ideas do you have to establish superior relationships with customers extended hours for customer service option to have company call back vs being on hold Personalized to e mails online chat with customer service Answering machine having to call back Not being able to understand customer service too many options to press on phone too long not knowledgeable online help not a real person follow