Supply Chain Management

Definition of Supply Chain

All the activities associated with the flow

of goods and information from the raw

materials stage to the end users.

Materials and information flow both up

and down the supply chain.

A Supply Chain for A Product

Suppliers Manufacturers - Distributors - Retailers

- Consumer

Who Are Members of An Education Supply Chain?

Members of An Education Supply Chain

End Users: Employers and Society Supply Chain Members: Colleges and Universities High Schools Middle Schools Elementary Schools and Pre-Schools Families

Development of SCM

Pressure to increase productivity, reduce costs, and improve customer service Increased use of outsourcing Globalization Increased transportation costs Advancement in information technology Emergence of new forms of interorganizational relationships

Key Elements of SCM

Strategic Issues
Tactical Issues Operating Issues

Strategic Issues

Design of Supply Chain Selection of supply chain members, locations, outsourcing decisions, etc Strategic Alliance Alliance conceptualization Alliance pursuance Alliance confirmation Alliance implementation

Tactical Issues

Strategies and policies on inventories, purchasing, transportation, quality, etc.

Design of supply chain information systems

Inter-organizational information systems Intra-organizational information system

What Are the Inter-Organizational Information Systems?

What Are the Inter-Organizational Information Systems?

Internet
Extranet

Electronic Data Interchange (EDI)

Satellite systems

SCM software systems

What Are the Intra-Organizational Information Systems?

What Are the Intra-Organizational Information Systems?

Intranet
Bar coding and scanners RFID Cable and wireless systems ERP systems Database and data warehouse systems

Operating Issues

External supply chain process mapping and improvement Business Process Reengineering Benchmarking Integrated logistics Third-party logistics Disintermediation Reverse logistics

External Process Improvement

(Michael Hammer, HBR, Sept. 2001)

Scoping

Identify the appropriate business process

Select a partner

to redesign

Organizing

Establish an executive steering committee Convene a design team

External Process Improvement

(Michael Hammer, HBR, Sept. 2001)

Redesigning

Design the new, integrated process in

a way that fulfills performance goals

Implementing

Roll out the new process Communicate

Optimization of A Supply Chain

Inventory levels
Lot size Lead time Product variety Customer service Information

Performance Measures for SCM SCOR (www.supply-chain.org)

Reliability

On-time delivery, order fulfillment lead

time, fill rate, perfect order fulfillment

Flexibility

Supply chain response time, upside

production flexibility

Performance Measures for SCM SCOR (www.supply-chain.org)

Expenses

Supply chain management cost,

warranty cost as a percentage of revenue, value added per employee

Asset Utilization

Total inventory days of supply, cash-tocash cycle time, net asset turns

(Hau Lee, HBR, Oct. 2004)

Trip-A Supply Chain

Agility respond to short-term changes in demand or supply quickly; handle external disruptions smoothly

Promote flow of information; dependable

Equitably share risks, cost, and gain of
improvement initiatives

logistics system; design for postponement

Alignment create incentives for better performance

(Hau Lee, HBR, Oct. 2004)

Trip-A Supply Chain

Adaptability adjust supply chains design to meet structural shifts in markets; modify supply network to strategies, products, and technologies

Spot new supply bases and markets;

create flexible product designs; develop fresh supplies and logistics infrastructure

Strategies for Improving Supply Chain Performance

Determine the cost drivers and supply chain performance Focus on the needs of the end users Understand trade partners priorities Develop a clear and focused strategy Assemble a high-performance project team Commit to long-term improvement

Software Systems for SCM

Collaborative Planning, Forecasting, and Replenishment (CPFR) - information sharing among supply chain partners

Front-end agreement Joint business plan Sales forecast collaboration Order forecast collaboration Order generation/delivery execution

What Are the Key Requirements for A Successful Supply Chain?

Requirements for A Successful Supply Chain

Share goals and interests

Trust

Information sharing
Long-term commitment

Strong individual members