W5 Flashcards
Supply chain management (SCM)
- defined as getting the right product to the right place at the right time
benefits:
- satisfied customers
- lower costs
- better quality and fast delivery
minimum requirements …
basic concept of supply chain
- linear
- lots of products and services ending in landfill
- Flow of info
- flow of goods
strategic view
- supply chain is strategic (look at whole supply chain)
- puts operations in a competitive context
- identify players in supply chain and get to know the type of relationship needed between players to run effectively
supply strategy model (FISHER)
- Avoid having a mismatch between products and supply chain
(look at diagram x2)
lean - make use of a efficient supply chain - low cost
- get rid of waste by taking away things that don’t add value to the supply chain
agile - want a responsive supply chain not an efficient one
- don’t care about cost but how quick you can respond to change
lean approach (STANDARDISATION)
- main methods is JIT
- aims to meet demands instantaneously whilst reducing waste
- reduce inventory to produce goods exactly when needed
- meeting demand instantaneously with perfect quality and no waste
- standardisation - standardise everything (maccies sauce example)
- push system - produce products and push for customers to buy them
- pull systems - wait for customers to come to you
lean and the 7 wastes
- over production - pushing product forward regardless of need
- waiting - idle assembly work stations
- transport
- process - anything that is continuous should be automated
- inventory - reduce no. days in inventory (JIT)
- motion - any movement that doesn’t add value
- defective goods - product recalls
Agile supply strategy
- responding quickly to customer requirements
- need flexible manufacturing systems and info tech
- agile supply chain = market sensitive
- able to change production through mass customisation
Zara Example
- design and manufacture in house
- centralised system - have own distribution centres (easy to introduce new Strat and distribute) (if anything goes wrong effects whole supply chain)
- backwards vertical integration
- low inventory - use devices in stores to meet stock levels in HQ (standardisation) they control production so easy to monitor stock
- ZARA USES LEAGILE
- Assembly and stock is lean
- market is agile
supply chain structure
LOOK AT PHOTO
integration vs outsourcing
- integration = interlinking activities with players across the supply chain
- integrate up stream or downstream
- decision is either to integrate into the supply chain or outsource
- vertical integration - controlling everything upstream of the supply chain
DELL EXAMPLE:
- outsource upstream
- integrate downtstream (controlled by Dell)
supply chain risk
- supplying on a global basis and moving out of territory increases risk
- moving from low cost to best cost countries = increase risk
2 types of risk
1. matching up demand and supply = the amount customers want vs the amount suppliers can produce
2. external environment
mitigate risk:
- increase supply chain responsiveness
- matching supply with demand (use back up supply) - alternate suppliers to chose from if something goes wrong
inventory and the bullwhip effect
- using the same supply chain there is distortion of info form downstream which increases as you do through the supply chain
- the info keeps distorting as you move across the supply chain - C19 toilet roll
- retailer needs 200 - supplier makes 600 - next one makes 900
- info keeps distorting and increases
- increases market uncertainty and costs
supply chain dynamics
- hard dynamics - numerical
- soft dynamics - qualitative - building trust and relationships between stakeholders
- ideally need both to mange supply chain
inventory profile
- inventory normally spikes at the beginning of supply chain
- push system - lots of inventory waiting for customers to buy them
- settles in the middle (lean approach)
- spikes at the end as inventory reduces from purchases
problems with inventory
- want to avoid the profile mentioned
- if you have lots of inventory it covers the issues in the supply chain
- less inventory more likely to see the issues and alone them
