CHAPTER 5 The Supply Chain Management ConceptLearning ObjectivesThe Supply Chain ConceptSlide 4Evolution of Supply Chain ManagementAbout Supply Chains…Different Supply Chain Configurations: Direct Supply ChainDifferent Supply Chain Configurations: Extended Supply ChainDifferent Supply Chain Configurations: Ultimate Supply ChainSupply ChainSupply Chain ManagementLogisticsSuccessful Supply Chains have…SCM ModelsThe Supply-Chain Operations Reference (SCOR) ModelSlide 16Slide 17The Global Supply Chain Forum (GSCF) ModelProcess Classification Framework (PCF)Slide 20Attributes Affecting SCM ImplementationSlide 22Supply Chain FacilitatorsBarriers to Supply Chain ManagementGlobalization of Supply ChainsSupply Chain IntegrationCase 5-1 Johnson Toy CompanyPowerPoint PresentationSlide 29Slide 30Slide 31Slide 32Slide 33Slide 34CHAPTER 5The Supply Chain Management ConceptLearning Objectives•To learn about supply chains and their management•To appreciate the attributes affecting supply chain management implementation•To consider potential barriers to supply chain management implementation•To examine supply chain integration© 2008 Prentice Hall 2-2The Supply Chain Concept•Key Terms–Agile supply chain–Bullwhip effect–Fast supply chain–Fourth-party logistics (lead logistics provider)–Global Supply Chain Forum (GSCF) model–Leagility–Lean supply chain•Key Terms–Partnerships–Perfect order–Process Classification Framework (PCF)–Supply chain–Supply chain analytics–Supply chain collaboration–Supply chain management (SCM)© 2008 Prentice Hall 2-3The Supply Chain Concept•Key Terms–Supply Chain Operations Reference (SCOR) model–Third-party logistics (logistics outsourcing; contract logistics)© 2008 Prentice Hall 2-4Evolution of Supply Chain Management•Relatively new concept – rarely mentioned prior to 1990•Recognition grew when value could be found in coordinating various business functions•SCM philosophy:•Coordinate not only within organizations, but across organizations2-5About Supply Chains…•A supply chain “encompasses all activities associated with the flow and transformation of goods from the raw material stage (extraction), through to the end user, as well as the associated information flows.”2-6Source: Robert B. Handfield and Ernest L. Nichols, Jr., Introduction to Supply Chain ManagementDifferent Supply Chain Configurations:Direct Supply Chain2-7Supplier Organization CustomerDifferent Supply Chain Configurations:Extended Supply Chain2-8SupplierOrganizationCustomerSupplier’ssuppliersCustomer’scustomersDifferent Supply Chain Configurations:Ultimate Supply Chain2-9SupplierOrganizationCustomerUltimatesupplierUltimatecustomerFinancial ProviderMarket Research3rd Party Logistic SupplierSupply Chain2-10Supply Chain ManagementSupply chain management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies. CSCMPLogistics•CSCMP (Council of Supply Chain Management Professionals) definition:“Logistics is that part of the Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers’ requirements.”© 2008 Prentice Hall 1-12Source: clm1.orgSuccessful Supply Chains have…•Enterprise-to-enterprise point of view•Systems approach across all organizations in the supply chain–Companies recognize interdependencies–Goals and objectives are compatible© 2008 Prentice Hall 2-13•Models identify business processes that help organizations implement and evaluate processes.–Supply Chain Operations Reference (SCOR) - Supply Chain Council–Global Supply Chain Forum (GSCF) - Supply Chain Management Institute–Process Classification Framework (PCF) - APQCSCM Models•Process reference models integrate the well-known concepts of business process reengineering, benchmarking, and process measurement into a cross-functional framework.•A Process Reference Model Contains:–Standard descriptions of management processes–A framework of relationships among the standard processes–Standard metrics to measure process performance–Management practices that produce best-in-class performance–Standard alignment to features and functionalityThe Supply-Chain Operations Reference (SCOR) Modelhttp://archive.supply-chain.org/galleries/default-file/SCOR%2080%20Overview%20Booklet2.pdfhttp://supply-chain.org/f/SCOR%2090%20Overview%20Booklet.pdfThe Supply-Chain Operations Reference (SCOR) ModelSCOR ProcessDefinitionsPlan Processes that balance aggregate demand and supply to develop a course of action which best meets sourcing, production, and delivery requirementsSource Processes that procure goods and services to meet planned or actual demand Make Processes that transform product to a finished state to meet planned or actual demandDeliver Processes that provide finished goods and services to meet planned or actual demand, typically including order management, transportation management, and distribution managementReturn Processes associated with returning or receiving returned productsfor any reason. These processes extend into post-delivery customer supportThe Supply-Chain Operations Reference (SCOR) Model© 2008 Prentice Hall 2-17http://archive.supply-chain.org/galleries/default-file/SCOR%2080%20Overview%20Booklet2.pdf•Customer Relationship Management (CRM)•Customer Service Management•Demand Management •Order Fulfillment•Manufacturing Flow Management•Supplier Relationship Management•Product Development and Commercialization•Return ManagementThe Global Supply Chain Forum (GSCF) Modelhttp://findarticles.com/p/articles/mi_qa3705/is_200501/ai_n13632938/?tag=content;col1Process Classification Framework (PCF)http://meilleradvisoryservices.com/yahoo_site_admin1/assets/images/APQC-PCF_w-logo.260172250_std.jpgProcess Classification Framework
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