CHAPTER 1 – THE GROWING DEMAND FOR SUPPLY CHAIN MANAGEMENT Flashcards
– The basic principle of the supply chain began to shape.
1980
planning and coordination of all of the people, processes and technology involved in creating value for a company.
Supply Chain Management
Managing a supply chain effectively involves coordinating all of the work inside your company with the happenings outside of your company.
Supply Chain Management
means “money”
– If a customer is willing to pay for something then it has ?
value
– impact the value equation for a company
– critical to a supply chain
– they are so interdependent, it’s a bad idea to manage them separately, in silos
Negotiating prices, scheduling manufacturing, and managing logistics
– difference between the amount of money your company brings in (revenue) and the amount of money that you spend (costs)
Profit
– the amount of value that you have captured from your supply chain.
Profit
To prepare for the unknown and the unknowable, there are 3 important things to note:
Which scenarios are most important to you?
What do you do - and how - in each scenario?
How you can tell when the scenario is becoming reality
– a legal concept that is used in contracts to justify why someone is unable to meet their obligations.
Force Majeure
Supply chain management professionals
generalists & specialists
who look at the big picture
Generalists
focus on particular step in the supply chain
Specialists
way of describing the essence of supply chain management
Supply Chain Management Principles
10 Supply Chain Management Principles
- Customer Focus
- Systems Thinking
- Bimodal Innovation
- Collaboration
- Flexibility
- Technology
- Global Perspective
- Risk Management
- Visibility
- Value Creation
– understanding who your customers are and why they’re buying your product and services
Customer focus
– SCM requires an understanding of the end-to-end system - the combination of people, processes, and technologies— that must work together so that you can provide your product or service.
System thinking
– involves an appreciation for the series of cause-and-effect relationships that occur within the supply chain
System thinking
– Supply chains need continuous process improvement, or sustaining innovation, to keep pace with competitors.
Bimodal innovation
Process improvement methods
Lean, Six Sigma, and the Theory of Constraints
– new technologies can disrupt industries.
Disruptive innovation
– People need to work across silos inside an organization
– SCM need to work with suppliers and customers outside organizations.
Collaboration
– measurement of how quickly your supply chain can respond to changes such as increase or decrease in sales or disruption in suppliers.
Flexibility
– for moving physical products and for processing information
– has transformed the way that supply chains work.
Technology
– The ability to share information instantly and to move products around the world cheaply means that every company today operates in a global marketplace
– business depends on global factors to supply inputs and drive demand for outputs
– think globally about the competition
Global perspective
is the key to avoiding or minimizing the costs of dealing with surprises
Risk Management
the key to making supply chain work smoothly
Stability
– Knowing what’s happening in real time (or close to real time) lets you make better decisions faster.
– lets you make decisions based on facts rather than on intuition or uncertainty.
Visibility
value is the heart of supply chain management
Value Creation
– job description for supply chain manager
Five Supply Chain Tasks
supply chain expert who said that SCM should concentrate on five tasks:
James B. Ayers
Five Supply Chain Tasks
- Designing supply chain for strategic advantages
- Implementing collaborative relationships
- Forging supply chain partnership
- Managing supply chain information
- Making money from supply chain
strategy for helping a company to plan and implement effective supply chain management practices
Implementing the New Supply Chain Agenda (5)
Implementing the New Supply Chain Agenda (5)
- Placing the right people in the right jobs.
- Putting the right technology in place
- Focusing on internal collaboration
- Directing external collaboration
- Applying project management
