426 W1: Case Discussion
Tie3D
Ch01PPT10e.pptxCHAPTER 1
Supply Chain Management:
An Overview
Supply Chain Management: A Logistics Perspective (10e)
Coyle, Langley, Novack, and Gibson
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May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Discussion Outline
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Five major external forces
Development of supply chain management concept
Integrated supply chain characteristics
Supply chain flows
Major supply chain issues
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Leading Retailers (Sales Year)
| 2000 | 2010 | 2014 |
| 1. Wal-Mart | 1. Wal-Mart | 1. Wal-Mart |
| 2. Kroger | 2. Kroger | 2. Kroger |
| 3. The Home Depot | 3. Target | 3. Costco |
| 4. Sears, Roebuck & Company | 4. Walgreen | 4. The Home Depot |
| 5. Kmart | 5. The Home Depot | 5. Walgreen |
| 6. Albertson’s | 6. Costco | 6. Target |
| 7. Target | 7. CVS Caremark | 7. CVS Caremark |
| 8. JC Penny | 8. Lowe’s | 8. Lowe’s |
| 9. Costco | 9. Best Buy | 9. Amazon.com |
| 10. Safeway | 10. Sears Holdings | 10. Safeway |
Source: Table 1.1
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Five Major External Forces
1
2
3
4
5
Government
Policy &
regulation
Organizational
consolidation
Globalization
Technology
Empowered
consumer
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Five Major External Forces - Globalization
Inventory management challenges
Faster duplicability of products & services
Faster reduction in demand
Requirement of new pricing policies
Higher risk of obsolescence
Longer and more complex supply chain challenges
Growth and increased scope of outsourcing
Images courtesy of Daily Lending News
Globalization creates more economic and political risk, shorter product life cycle, and the blurring of traditional organizational boundaries.
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Five Major External Forces - Technology
The Internet. “Connected” 24/7
Images courtesy of National Conference of State Legislatures
Social networks. Impact on customer demand and the speed of information transfers
The world’s “knowledge pool” connection. Opportunities for collaboration in supply chains
Technology is a facilitator of internal process and supply chain transformation. It is also a major force in changing the dynamics of the marketplace.
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Five Major External Forces – Organization Consolidation and Power Shifts
During the 1980s and especially the 1990s, economic power and the driving force in supply chains shift from product manufacturers to the retail end of the supply chain.
More collaboration among organizations in supply chains
Win-win, improved services such as:
Scheduled deliveries
“Rainbow” pallets
Advance shipments notices (ASNs) shrink-wrapped pallets
Sharing of point-of-sale data to mitigate “bullwhip effect”
Images courtesy of Community Services and Health Industry Skills Council (Australia)
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Five Major External Forces – Empowered Consumers
Consumers are empowered by exponentially expanded access to product sources and related information and increased buying power due to high income levels.
Increased pressures on supply chain due to increased demands at the retail level in terms of:
Competitive prices
High quality in products and services
Tailored or customized products
Convenience and responsiveness – 24/7 availability with a minimum of wait time
Flexibility – Omnichannel distribution strategies
Images courtesy of Forrester Research
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Five Major External Forces – Government Policy and Regulation
More competitive environment is a result of the deregulation of several important sectors in the United States occurred in the 1980s and 1990s.
The transportation industry. Expanded services beyond transportation, with service providers’ role evolving to outsourcing partners
Images courtesy of Liberty Unyielding
The financial sector. More flexible and responsive to customer needs, making businesses more cognizant of supply chain management impact on efficiency and cash flow
The communications industry. A component of the information revolution, leading to dramatic improvements and opportunities in logistics and supply chains
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Evolution of Supply Chain Management Concept
Demand forecasting
Purchasing
Requirements planning
Production planning
Manufacturing inventory
Warehousing
Material handling
Packaging
Finished goods inventory
Distribution planning
Order processing
Transportation
Customer services
Strategic planning
Information services
Marketing/Sales
Finance
Activity fragmentation to 1960s
Activity integration 1980s
1990s +
Purchasing/
Materials Management
Physical Distribution
Integrated Logistics
Supply Chain Management
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Integrated Supply Chain – Basics
SCM is the art and science of integrating the flows of products, information and financials through the entire supply pipeline from the supplier’s supplier to the customer’s customer.
Suppliers
Contracted Manufacturers
Manufacturers
Wholesalers/ Distributors
Retailers/ Customers
Product/Services Flow
Information Flow
Finance /Cash Flow
Demand Flow
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Integrated Supply Chain – Network
Retail Store
Retailer Warehouse
Manufacturing Warehouse
Manufacturing Plant
Wholesaler Warehouse
Raw Material Supplier
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Supply Chain Flows
PRODUCT FLOW
Physical movement of goods and materials
INFORMATION FLOW
Enabling physical flow of products
Decision making
Supply chain collaborations
CASH FLOW
Management of working capital
DEMAND FLOW
Detect and understand demand signals
Synchronize demand vs. supply
Source: Figure 1.8
Major Supply Chain Issues
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Cost and
value
Information
Organizational relationships
Inventory deployment
Complexity
Technology
Performance measurement
Supply chain security
Transportation management
Talent management
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5
7
8
10
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4
6
9
Supply chain network
1
2
Major Supply Chain Issues (continued)
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Images courtesy of (left to right) Elemica, The Mudd Partnership, Qstrock Inventory
The challenges
Network system (facilities and supporting transportation services) must be capable and flexible to respond and change with market dynamics.
Supply Chain Network
The challenges
Increased requirements in simplifying and continually evaluating areas of complexity in the various aspects of supply chains
Complexity
The challenges
Increased requirements for coordination or integration to reduce inventory levels on horizontal (single-firm) and vertical (multiple-firms) levels in the supply chain.
Inventory Deployment
Major Supply Chain Issues (continued)
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Images courtesy of (left to right) TTGT Media, in-sourcing, The Billing Project.
The challenges
The sharing of information along the supply chain
The discipline to ensure the integrity of the vast amount of data collected and stored
Information
The challenges
The prevention of sub-optimization.
Cost and Value
The challenges
Internal collaboration (marketing, sales, operations, finance, etc.)
External collaboration (vendors, customers, transportation companies, 3PLs)
Organizational Relationships
Major Supply Chain Issues (continued)
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Images courtesy of (left to right) FCW, Pixabay, The FSL Group
The challenges
Connecting lower-level metrics in an organization directly to the high-level performance measures of the organization and the supply chain
Performance Measurement
The challenges
Evaluate, strategically plan, and successfully implement the technology to make the improvements desired
Technology
The challenges
Transport “perfect storm.” Transport market changes; driver shortages; fuel costs; infrastructure constraints; and regulatory changes
Transportation Management
Major Supply Chain Issues (continued)
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Images courtesy of (left to right) One Source Technology, MediaTec Publishing
The challenges
Risk of disruptions, vulnerability, and exposure to terroristic threats exacerbated by distance and complexity in global supply chain
Supply chain security
The challenges
Attract, develop, and maintain the appropriate pool of talent from entry level to executive level
Talent management
Summary
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The rate of change has been driven by a set of external forces including globalization, technology, organizational consolidation and shifts in power in supply chains, empowered consumers, and government policy and regulations.
Supply chains are extended enterprises which require managing four flows—products, information, financials (cash), and demand on a collaborative basis.
The global supply chains of the best companies must be adaptive, resilient, and responsive to meet the challenges of the global economy and develop mitigating strategies for disruptive forces.
