Supply Topic 1 (Intro to Supply Chain Management) Flashcards
Who is involved in a supply chain
- all parties = stakeholders
- directly or indirectly
- fulfil customer request
What functions are involved in supply chains?
- receiving and fulfilling a customer request (customer service)
- new product development,
- marketing,
- operations,
- distribution,
- finance,
product flow
physical product in form of raw materials not only tangible, can be service
info and data flow
customers need product info (ALWAYS 2 WAY)
Need to build infrastructures in order to generate and receive these information and make them work seamlessly = does generate costs
reverse logistics
returns
automotive supply chain
accurate supply chain network
* Each stakeholder on each level can have multiple parts
* Multiple participants under each of the stakeholders
goal/objective of supply chain
structure the product, financial, and info flows in a way that meets customer needs in cost effective manner -> maximising net value generated
how is supply chain success measured
measured by total supply chain surplus
supply chain surplus
value of final product to customer - supply chain cost
consumer surplus
value - revenue
supply chain profitability
revenue - cost
value
max willing to pay
* Depends on functionality and feature and service offered
Only customer says whether they received the value or not
revenue
price paid
Customer = only source that provides positive cash flow
costs
overall cost to supply chain
All info flows generate costs
effective supply chain management
managing assets and flows to grow the total supply chain surplus
Increase value and decrease costs
3 decision phases in supply chain
- Each decision should be made to raise supply chain surplus
- Results efficient/effective?
1. Supply chain strategy or decision (structure chain over years)
2. Supply chain planning (tactical decisions over next quarter/yr)
3. Supply chain operation (Daily/weekly operational decisions)
supply chain strategy or design
- configuration of supply chain
- allocation of resources
- what processes each stage will perform
- Decisions are LT & expensive to reverse - account for uncertainty
Processes performed in supply chain strategy or design of the supply chain?
○ Outsourcing
○ Locations/capacities
○ Products storage
○ Transportation
○ Info systems
supply chain planning
- Tactical decisions over the next quarter or year
- configuration determined in strategic phase is fixed and establishes constraints within which planning must be done
- planning: markets and locations, subcontracting/manufacturing, Inventory policies, Timing and size of marketing or price promotions
4 things to consider when planning
- Demand uncertainty
- Competition
- Flexibility over time horizon
- Output is set of operating policies that govern ST operations
supply chain operation
- Less uncertainty about demand in the short term
- Handle incoming customer orders as effectively as possible given constraints in previous 2 phases
- Allocate inventory or production to individual order
- Set order due dates
- Picklist in warehouses
- Allocating order shipping mode & shipment
- Set delivery schedules of trucks
- Place replenishment order
supply chain operations reference digital standard
SCOR DS
1. Plan
2. Order
3. Source
4. Transform
5. Fulfil
Return
supply chain challenges
- Costs
- Complexity
- Continuity
- Consequences
The big 8 supply chains are responsible for >50% of global emissions
Costs
dominate challenge
value/performance, right price/product
complexity
understanding the system
complex network
info flow
continuity
given design
volatility
system breaks/congests
consequences
especially carbon
reducing our footprint
carbon influence
how to address supply chain challenges
- responsiveness
- reliability
- resilience
- relationships
responsiveness
- shorter lead time, flexibility, customised solutions
- More demand driven - close to customer
- Rather than forecast driver - agility across the chain
- Mapping network, supply chain of future
reliability
- Improvements can only be achieved through re-engineering processes that impact performance
Quality control, sourcing
resilience
- Resilient supply not lowest cost but most capable of coping with uncertainty and disruptions
- Sustainability, quality control, supply chain of future
relationships
- Managing complex networks of companies, legally independent - reality interdependent
- Success = constant search for win-win solutions - trust/mutuality
- Negotiation, contract, mapping network
