Bài giảng Business Driven Technology - Business plug-in B8 - Supply Chain Management

BUSINESS PLUG-IN B8Supply Chain ManagementLEARNING OUTCOMESList and describe the four drivers of supply chain managementExplain supply chain management strategies focused on efficiencyExplain supply chain management strategies focused on effectivenessSummarize the future of supply chain managementINTRODUCTIONSupply chain – consists of all parties involved, directly or indirectly, in the procurement of a product or raw materialSupply chain management (SCM) – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitabilitySUPPLY CHAIN DRIVERSThe four primary drivers of supply chain managementFacilitiesInventoryTransportationInformationOrganizations use these four drivers to support either a supply chain strategy focusing on efficiency or a supply chain strategy focusing on effectivenessSUPPLY CHAIN DRIVERSFACILITIES DRIVERFacility – processes or transforms inventory into another product, or it stores the inventory before shipping it to the next facilityThree primary facilities componentsLocationCapacityOperational designFACILITIES 1: LocationLocation efficiency – centralize the location to gain economies of scale, which increases efficiency Location effectiveness – decentralize the locations to be closer to the customers, which increases effectivenessFACILITIES 2: CapacityCapacity efficiency – minimal excess capacity with the ability to produce only what is requiredCapacity effectiveness – large amounts of excess capacity which can handle wide swings in demandFACILITIES 3: Operational DesignOperational design efficiency – product focus design allows the facility to become highly efficient at producing one single product, increasing efficiencyOperational design effectiveness – functional focus design allows the facility to perform a specific function on many different types of products, increasing effectivenessFACILITIES DRIVERINVENTORY DRIVERInventory – offsets discrepancies between supply and demandInventory management and control software – provides control and visibility to the status of individual items maintained in inventoryTwo primary inventory componentsCycle inventorySafety inventoryINVENTORY 1: Cycle InventoryCycle inventory – the average amount of inventory held to satisfy customer demands between inventory deliveriesCycle inventory efficiency – holding small amounts of inventory and receiving orders weekly or even dailyCycle inventory effectiveness – holding large amounts of inventory and receiving inventory deliveries only once a monthINVENTORY 2: Safety InventorySafety inventory – extra inventory held in the event demand exceeds supplySafety inventory efficiency – holding small amounts of safety inventory Safety inventory effectiveness – holding large amounts of safety inventoryINVENTORY DRIVERTRANSPORTATION DRIVERTransportation – moves inventories between the different stages in the supply chainTwo primary inventory componentsMethod of transportationTransportation routeTRANSPORTATION 1: Method of TransportationGlobal inventory management system – provides the ability to locate, track, and predict the movement of every component or material anywhere upstream or downstream in the supply chainMethod of transportation efficiencyMethod of transportation effectivenessTRANSPORTATION 2: Transportation RouteTransportation planning software – tracks and analyzes the movement of materials and products to ensure the delivery of materials and finished goods at the right time, the right place, and the lowest costDistribution management software – coordinates the process of transporting materials from a manufacturer to distribution centers to the final customerTransportation route efficiencyTransportation route effectiveness TRANSPORTATION DRIVERINFORMATION DRIVERInformation – an organization must decide how and what information it wants to share with its supply chain partnersTwo primary information componentsInformation sharingPush verses pull strategyINFORMATION 1: Information SharingInformation sharing efficiency – freely share lots of information to increase the speed and decrease the costs of supply chain processingInformation sharing effectiveness – share only selected information with certain individuals, which will decrease the speed and increase the costs of supply chain processingINFORMATION 2: Push vs. Pull Information StrategyPull information strategy (efficiency) – supply chain partners are responsible for pulling all relevant informationPull technology – pulls informationPush information strategy effectiveness – organization takes on the responsibility to push information out to its supply chain partnersPush technology – sends informationINFORMATION DRIVERAPPLYING A SUPPLY CHAIN DESIGNWal-Mart’s supply chain management strategy emphasizes efficiency, but also maintains adequate levels of effectivenessFacilities focus – EfficiencyInventory focus – EfficiencyTransportation focus – EffectivenessInformation focus - EfficiencyAPPLYING A SUPPLY CHAIN DESIGNFuture TrendsFastest growing SCM componentsSupply chain event management (SCEM)Selling chain management Collaborative engineeringCollaborative demand planningRadio Frequency Identification (RFID)Radio frequency identification (RFID) - use active or passive tags in the form of chips or smart labels that can store unique identifiers and relay this information to electronic readersRFID tag - contains a microchip and an antenna, and typically work by transmitting a serial number via radio waves to an electronic reader, which confirms the identity of a person or object bearing the tagRadio Frequency Identification (RFID)RFIDCLOSING CASE ONEListerine’s JourneyWhen you use Listerine antiseptic mouthwash, you are experiencing the last step in a complex supply chain spanning several continents and requiring months of coordination by countless businesses and individualsAs raw material is transformed to finished product, what will be Listerine travels around the globe and through multiple supply chains and information systemsCLOSING CASE ONE QUESTIONSSummarize SCM and describe Warner-Lambert’s supply chain strategyDetail Warner-Lambert’s facilities strategyDetail Warner-Lambert’s inventory strategyCLOSING CASE ONE QUESTIONSDetail Warner-Lambert’s transportation strategyDetail Warner-Lambert’s information strategyWhat would happen to Warner-Lambert’s business if a natural disaster in Saudi Arabia depletes its natural gas resources?CLOSING CASE TWOKatrina Shakes Supply ChainsHow do corporations cope with the realities of risk, uncertainty, and crisis? Many businesses prepared well for Hurricane Katrina, responded quickly, and did so because Katrina was exactly the kind of event for which well-run corporations ready themselvesCorporations donated more than $500 million for relief for the hurricane that hit New Orleans in 2005 and were the first to provide help to Katrina victimsCLOSING CASE TWO QUESTIONSHow did Home Depot manage its supply chain to be one of the first stores to reopen after Katrina?How could Wal-Mart have revamped its transportation driver to handle Katrina more efficiently? Why is it critical to FedEx’s success to be able to handle all types of global disasters? Highlight FedEx’s use of the information driverCLOSING CASE TWO QUESTIONSHow can the government learn from big business in dealing with disasters such as Katrina?What can companies do in terms of facilities, inventory, transportation, and information to prepare themselves for disasters such as Katrina?