Upload
efni-siregar
View
220
Download
0
Embed Size (px)
Citation preview
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
1/29
11-1
Chapter 11
Coordinated Product andSupply Chain Design
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
2/29
11-2
11.1 A General Framework
Two distinct chains in organizations:The supply chain which focuses on the flowof physical products from suppliers throughmanufacturing and distribution all the way toretail outlets and customers, andThe development chain which focuses onnew product introduction and involves productarchitecture, make/buy decisions, earlier supplier involvement, strategic partnering,supplier footprint and supply contracts.
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
3/29
11-3
Key Characteristics of Supply Chain
Demand uncertainty and variability , inparticular, the bullwhip effectEconomies of scale in production andtransportationLead time , in particular due toglobalization
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
4/29
11-4
Technology clock speedSpeed by which technology changes in a particular industry
Make/Buy decisionsDecisions on what to make internally and what to buyfrom outside suppliers
Product structureLevel of modularity or integrality in a product
Modular productassembled from a variety of moduleseach module may have several optionsBulk of manufacturing can be completed before theselection of modules and assembly into the final product
takes place
Key Characteristics of Development Chain
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
5/29
11-5
What Is the Appropriate SupplyChain Strategy and Product DesignStrategy for Each Product Type?Each requires a different supply chain
strategyDevelopment chain has to deal with thediffering level of demand uncertainty
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
6/29
11-6
Interaction between the Two Chains
Fishers concept of Innovative andFunctional Products
Functional products characterized by:
slow technology clock speed, low product variety,and typically low profit margins
Innovative products characterized by:fast technology clock speed and short product life
cycle, high product variety, and relatively highmargins.
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
7/2911-7
Framework for Matching ProductDesign and Supply Chain Strategies
FIGURE 11-3: The impact of demand uncertainty and productintroduction frequency on product design and supply chain strategy
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
8/2911-8
11.2 Design for Logistics (DFL)
Product and process design that help tocontrol logistics costs and increase servicelevels
Economic packaging and transportationConcurrent and parallel processingStandardization
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
9/2911-9
Economic Packaging andTransportation
Design products so that they can beefficiently packed and storedDesign packaging so that products can beconsolidated at cross docking pointsDesign products to efficiently utilize retailspace
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
10/2911-10
Examples
IkeaWorlds largest furniture retailer 131 stores in 21 countries
Large stores, centralized manufacturing,compactly and efficiently packed products
Rubbermaid
Clear Classic food containers - designed to fit14x14 Wal-Mart shelves
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
11/2911-11
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
12/2911-12
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
13/2911-13
Final Packaging
Delay until as late as possibleRepackaging at the cross-docking point iscommon for many products
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
14/2911-14
Concurrent/Parallel Processing
Objective is to minimize lead times Achieved by redesigning products so thatseveral manufacturing steps can take
place in parallelModularity/Decoupling is key toimplementation
Enables different inventory levels for different parts
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
15/29
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
16/2911-16
Push-Pull BoundaryPull-based systems typically lead to:
reduction in supply chain lead times, inventory levels,and system costsmaking it easier to manage system resources
Not always practical to implement a pull-based
system throughout the entire supply chainLead times may be too longMay be necessary to have economies of scale inproduction or transportation.
Standardization strategies can combine pushand pull systems
Portion of the supply chain prior to productdifferentiation is typically a push-based supply chainPortion of the supply chain starting from the time of differentiation is a pull-based supply chain.
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
17/2911-17
Long lead times, high inventory levels, imbalance of inventoryLocalization (labeling and manuals, power supply, plug)One cause of imbalance (too much inventory for printerslocalized for one market, too little inventory for another market)
Significant uncertainty on how to set safety stockToo many localization optionsUncertainty in local markets
Some options Air shipment A factory in EuropeImprove forecasting practices (how?)
Back to the HP Case
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
18/2911-18
HP management considered postponement as an option
Ship unlocalized printers to European DC and localizethem after observing the local demand At 98% service level, safety stock dropped from 3.8weeks supply to 2.6 weeks supply on the average
Annual savings around $800,000Value of inventory in transit (and hence insurancecosts) goes downSome of the localization material can be locallysourced (cheaper)European DC had to be modified to facilitatelocalization. Printer needed to be redesigned.
All Vancouver products now DC-localizable(postponement). One of the best of such practices.
Back to the HP Case
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
19/2911-19
11.3 Supplier Integration into NewProduct Development
Traditionally suppliers have been selected after design of product or componentsHowever, firms often realize tremendous
benefits from involving suppliers in the designprocess.Benefits include:
a decline in purchased material costsan increase in purchased material qualitya decline in development time and costan increase in final product technology levels.
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
20/2911-20
The Spectrum of Supplier IntegrationNo single appropriate level of supplier integration
NoneSupplier is not involved in design.Materials/subassemblies supplied as per customer specifications/design
White box
Informal level of integrationBuyer consults with the supplier informally when designingproducts and specificationsNo formal collaboration
Grey boxFormal supplier integrationCollaborative teams between buyers and suppliers engineersJoint development
Black boxBuyer gives the supplier a set of interface requirementsSupplier independently designs and develops the requiredcomponent
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
21/2911-21
Appropriate Level Depends on theSituation
Process Steps to follow:Determine internal core competencies.Determine current and future new productdevelopments.Identify external development andmanufacturing needs.
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
22/2911-22
Black BoxIf future products have components that requireexpertise that the firm does not possess, anddevelopment of these components can be separatedfrom other phases of product development, then taking
Grey BoxIf separation is not possible
White BoxIf buyer has some design expertise but wants toensure that supplier can adequately manufacture thecomponent
Appropriate Level Depends on theSituation
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
23/29
11-23
Keys to Supplier IntegrationMaking the relationship a success:
Select suppliers and build relationships with them Align objectives with selected suppliers
Which suppliers can be integrated?
Capability to participate in the design processWillingness to participate in the design process Ability to reach agreements on intellectual property andconfidentiality issues.
Ability to commit sufficient personnel and time to theprocess.Co-locating personnel if appropriateSufficient resources to commit to the supplier
integration process.
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
24/29
11-24
11.4 Mass CustomizationEvolved from the two prevailing manufacturingparadigms of the 20th century
Craft production and mass production.Mass production
efficient production of a large quantity of a small varietyof goodsHigh priority on automating and measuring tasksMechanistic organizations with rigid controls
Craft productioninvolves highly skilled and flexible workersOften craftsmenOrganic organizations which are flexible and changing
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
25/29
11-25
Absence of Trade-OffsTwo types meant inherent trade-offs
Low-cost, low-variety strategy may be appropriate for some productsFor others, a higher-cost, higher-variety, moreadaptable strategy was more effective
Development of mass customization implies it isnot always necessary to make this trade-off Mass customization
delivery of a wide variety of customized goods or services quickly and efficiently at low cost
captures many of the advantages of both the massproduction and craft production systemsnot appropriate for all productsgives firms important competitive advantageshelps to drive new business models
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
26/29
11-26
Making Mass CustomizationWork
Highly skilled and autonomous workers,processes, and modular unitsManagers can coordinate and reconfigurethese modules to meet specific customer requests and demands
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
27/29
11-27
Key AttributesInstantaneous
Modules and processes must be linked together veryquickly Allows rapid response to various customer demands.
CostlessLinkages must add little if any cost to the processes
Allows mass customization to be a low-cost alternative.
SeamlessLinkages and individual modules should be invisible to
the customer FrictionlessNetworks or collections of modules must be formedwith little overhead.Communication must work instantly
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
28/29
11-28
Mass Customization and SCMMany of the advanced SCM approaches andtechniques essential if mass customization is tobe successfully implementedIT critical for effective SCM is also critical for
coordinating different modulesConcepts like strategic partnerships and supplier integration essential for the success of masscustomization.
Postponement can play a key role inimplementing mass customization
8/3/2019 Chapter 11A Coordinated Product and Supply Chain Download
29/29
SUMMARYDesign for logistics concepts
Efficient packaging and storageCertain manufacturing steps can becompleted in parallel
StandardizationIntegrating suppliers into the productdesign and development process
Advanced supply chain managementfacilitating mass customization