(Finansile)

&
Produksiebestuur 444

Week 9
SC Improvements

Matchingdemandandsupply
Supply chain ??

Wine

Exhibit 9.1
Typical GoodsProducing
Supply Chain
Structure

TheSimpleModel
Upstream
First tier
suppliers

Services

Supply chain

Our company
Distributors Retailers

End-Users

Sub-tier
suppliers

Downstream

Services

Demand chain

WhatdoesGLOBALmean?

Similar ??

McDonalds think globally act locally

TheSimpleModelisitreallytrue????
Upstream
First tier
suppliers

Services

Supply chain

Our company
Distributors Retailers

End-Users

Sub-tier
suppliers

Downstream

Services

Demand chain

TheLikelyReality

First tier suppliers

Distributors

Sub-tier suppliers
Worthy competitor

Retailers

End-User Segments

Our company

The supply chain

Competitiveadvantage
Better/faster/cheaper
KPIs

Cost(cheaper)
5
4
3
Sustainability(strategic)

Quality(better)

1
0

Speed(faster)

Flexibility(faster/responsive)

SCORisfoundedonfive??distinct
managementprocesses
Plan

Deliver
Return

Suppliers
Supplier

Source

Make

Return

Deliver
Return

Source

Make

Return

Deliver
Return

Source
Return

Your Company

Supplier
Internal or External

Make

Deliver

Source

Return

Return

Customer

Customers
Customer

Internal or External

SCOR Model
Building Block Approach

SCOR = Supply Chain Operations Reference-model

SCOR
ModelandINFORMATION

Exhibit 9.4 Common Metrics Used to Measure Supply Chain Performance

ACloserLookattheBullwhipEffectandFactorsthat
ContributetotheVariability

DemandForecasting
LeadTime
BatchOrdering
PriceFluctuations
InflatedOrders

RECIPEforimprovement???

Uncertainty
Activities
Time

MethodsforCopingwiththeBullwhip
Reducinguncertainty
Centralizing information
Reducingvariability
Reducingvariabilityinherentinthecustomer
demandprocess.
Everydaylowpricing(EDLP)strategy.

MethodsforCopingwiththeBullwhip
Leadtimesmagnifytheincreaseinvariabilityduetodemand
forecasting.
Twocomponentsofleadtimes:
Orderleadtimescanbereducedthroughtheuseofcrossdocking
Informationleadtimescanbereducedthroughtheuseofelectronicdata
interchange(EDI)

MethodsforCopingwiththeBullwhip
Changingthewayinformationissharedandinventoryismanaged
Vendormanagedinventory(VMI)
Manufacturermanagestheinventoryofitsproductattheretaileroutlet
VMIthemanufacturerdoesnotrelyontheordersplacedbyaretailer,thus
avoidingthebullwhipeffectentirely.

Push,Pull,andPostponement:seeexhibit9.2

CODP
CustomerOrderDecouplingPoint
sometimesalsoreferredtoasdecisionpoint
raw materials
eng

s
u
p
Demand / p
Capacity l
i
e
r

components

semi finished

prod

prod

finished goods
prod

make-to-stock

MRP

assemble-to-order

Postpone
make-to-order
engineer-to-order

Product-type

c
u
s
t
o
m
e
r
Time

generic
customer specific

10

TakingapartGoogle'smodularsmartphone

http://www.engadget.com/2014/11/07/google-modular-smartphone-project-ara/

ReducingService
TypesofVariabilityinducedbycustomersinservice
delivery:

arrival when theyarrivetoconsumeaservice

request what theyaskforinthebundle
capability abilityofcustomerstoparticipate
effort willingness ofcustomerstoparticipate
subjectivepreference preferences ofcustomersinhow
serviceiscarriedout

11

FromclienttoOMmeasures
Organisation Valuechain

Integration
Offshoring
Outsourcing
SCM
Operations
performance measures

Time
Cost
Quality
Flexibility
Sustainability

Customers
Benefit
Package

Information technologyandsystems

SupplyChainissues
Returns Traceability Sustainability

12

Exhibit 9.3 Example of a Manufactured Good Recovery (Reverse Logistics)

Supply Chain

Remember recycling at Mondi

SCandRETURNS

13

Traceability
Sysco'shightech
fooddistribution

Traceability

14

TraceabilityofaNamibiansteak

TraceabilityofaNamibiansteak

15

Sustainability

Operations Strategy & Sustainability at McDonalds

McDonald's vision is to be the world's

best quick service restaurant
experience. Being the best means

providing outstanding quality, service,

cleanliness, and value, so that we make
every customer in every restaurant
smile. To achieve our vision, we focus
on three worldwide strategies:
(1) Be the Best Employer
(2) Deliver Operational Excellence
(3) Achieve Enduring Profitable Growth

16

Exhibit 4.5 McDonalds Customer Benefit Package

Operations Strategy at McDonalds

Four sustainability initiatives

Build a sustainable McDonalds that involves all facets of our business.

Commit to a three-pronged approach:

reduce, reuse, and recycle.

Strive to provide eco-friendly workplaces and restaurants.

Work with suppliers and outside experts to continuously
improve purchasing decisions and evaluation of supplier
performance regarding animal welfare.

17

Work with suppliers and outside experts to continuously

improve purchasing decisions and evaluation of supplier
performance regarding animal welfare.

Competingprioritiesand
Efficiency
Jacobs and Chase 2006

2007

18

OMStrategy
IN WAR, THEN, LET YOUR
GREAT OBJECT BE VICTORY,
NOT LENGHTY CAMPAIGNS.
SUN TZO

The beginning of The Art of War,

in a "classical" bamboo book
(600 BC)

OperationalStrategy

We have a
strategic plan.
Its called doing
things.
BUT

Herb Kelleher former chairman and CEO of Southwest Airlines

19