SCM StudentNotes 810S06

8/7/2019 SCM StudentNotes 810S06

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SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT AN OVERVIEWAN OVERVIEW

Chwen SheuChwen SheuPaul Edgerly Chair Professor Paul Edgerly Chair Professor

Kansas State UniversityKansas State University(CSCMP Kansas City Roundtable(CSCMP Kansas City Roundtable ))


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PRESENTATION OUTLINEPRESENTATION OUTLINE

I.I. SUPPLY CHAINSUPPLY CHAINMANAGEMENT (SCM):MANAGEMENT (SCM):

INTRODUCTIONINTRODUCTIONII.II. WHY IS SCM IMPORTANT?WHY IS SCM IMPORTANT?

III.III. GREEN SUPPLY CHAINGREEN SUPPLY CHAINMANAGEMENTMANAGEMENT


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1 . SUPPLY CHAIN1 . SUPPLY CHAINMANAGEMENT (SCM)MANAGEMENT (SCM)


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SEARCHING SEARCHING

SUPPLY CHAIN MANAGEMENT SUPPLY CHAIN MANAGEMENT Yahoo?

Google


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WHAT IS SCM?WHAT IS SCM?

Supply ChainSupply ChainA network of of suppliers, manufacturers,A network of of suppliers, manufacturers,warehouses, 3PL, retail outlets,warehouses, 3PL, retail outlets,

customers.customers.Supply chain management (SCM)Supply chain management (SCM)

T he management of flows between andT he management of flows between and

among supply chain stages to maximizeamong supply chain stages to maximizetotal supply chain profitabilitytotal supply chain profitability


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T raditional Supply Chain SystemsT raditional Supply Chain SystemsSupplier Manufacturer Manufacture Wholesale Retail Customer(1st,2nd,) Plant Distribution Distribution

Center Center

Material Flow

Information Flow

3 rd Party LogisticsProviders ( 3 PL)


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BEEF SUPPLY CHAINBEEF SUPPLY CHAIN


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IC SUPPLY CHAIN

IC IC

OEM

IBM


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SCM Survey:

2004 IT Industry(236 firms)


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H ow IMPORTANT is the SC function to your organization's business strategy ?


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W ho is directly RESPONSIBLE for determining your SC operations?

Up from 14.2%in 2003


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Compared to 2003, how is your SPENDING on SC likely to change in 2004?


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II. SCM: WHY IS IT

IMPORTANT?


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SCM: ITS A NEW BALL GAMESCM: ITS A NEW BALL GAME

Improves CompetitivenessImproves CompetitivenessEff iciency Eff iciency

Cost: Lean manufacturingCost: Lean manufacturing LeanLeansupply chainsupply chain (e.g., Boeing) (e.g., Boeing)

ResponsivenessResponsivenessCustomizationCustomization (e.g., Dell)(e.g., Dell)


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Efficiency: Boeing Example

TotalTotalDollars Spent in 2002Dollars Spent in 2002

$ 22.6$ 22.6BB6,1936,193

TotalTotalSupplier BaseSupplier Base

~70%~70% of Product Costof Product Cost


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Responsiveness: DellResponsiveness: Dell

W hy SCM?W hy SCM?

A winA win--win p ar tner shipwin p ar tner ship

ValueValue --addedadded

We focus on how we can coordinate our We focus on how we can coordinate our activities to create the most value for customers. activities to create the most value for customers.

- - M. Dell M. Dell


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(3 PL )Supplier Assembly Plants

Retailer

Supplier Assembly Plants(3 PL )

Responsive


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CREATING VALUESCREATING VALUES

Producers Shipping EastmanWarehouse

EastmanIT Dept

Wait

Open the boxes& Load

EastmanEmployees

Tradition: Time Consuming & Costly


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Implementing SCM requires a fundamental change in the way firms operate

Gee, we've never Gee, we've never done that before,done that before,but why not? Let'sbut why not? Let'sgive it a trygive it a try ..


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PARTNERSHIP &PARTNERSHIP &

Bullwhip EffectBullwhip EffectP&G found that

D ema nd v ar iab ility ( P ampers ) inc rea ses f or SC member s located f ar ther upstream (1:10)

Retailer W holesaler P&G 3M


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L ee , H, P. P admanabha n and S. W ang (1997), S loan Manageme nt R eview

What You See Is No t What T h ey F ac eWhat You See Is No t What T h ey F ac e


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III. GREEN SUPPLYIII. GREEN SUPPLYCHAIN MANAGEMENTCHAIN MANAGEMENT(GSCM)(GSCM)


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GSCM = SCM + EMGSCM = SCM + EM


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I think God's going to come down and pull civilization over for speeding.

Steven Wright


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ENVIRONMENTALENVIRONMENTAL

MANAGEMENT? WHY?MANAGEMENT? WHY?12 12 tonstons of COof CO 22 per capita areper capita areproduced per year. Onlyproduced per year. Only 8%8% of thisof this

emission is managed by nature.emission is managed by nature.T he average temp of the Earth couldT he average temp of the Earth couldraise up toraise up to 5 C 5 C by the end of 21by the end of 21centurycentury Sea level could rise up toSea level could rise up to100 meters100 meters ..A visit to Amsterdam could be soon aA visit to Amsterdam could be soon asubmarine visit submarine visit ..


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EM? WHY?EM? WHY?

60 %60 % of managers considered environmentalof managers considered environmentalissues to be highly important, 82 % expectedissues to be highly important, 82 % expectedthe importance would further increase in thethe importance would further increase in theyears to come (2002).years to come (2002). a new indus tr i al r evo l u t ion. I t is th e mos t a new indus tr i al r evo l u t ion. I t is th e mos t forc efu l tr end in my l ife t ime ... i t wi ll r edefineforc efu l tr end in my l ife t ime ... i t wi ll r edefineth e r u l es of th e g a meth e r u l es of th e g a me . (CEO, Sony). (CEO, Sony)


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Waste Electrical and ElectronicWaste Electrical and ElectronicEquipment (WEEE)Equipment (WEEE)

Restriction of HazardousRestriction of HazardousSubstances (RoHS)Substances (RoHS)

EnergyEnergy- -using Products (EuP)using Products (EuP)


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EMEM DEVELOPMENTDEVELOPMENT

USAUSAa.a. T otal cost of compliance over the past 25 years haveT otal cost of compliance over the past 25 years have

exceeded $1 trillion (~$120 billion annually).exceeded $1 trillion (~$120 billion annually).b .b . 1970s1970s : 2000 federal, state, and local e: 2000 federal, state, and local e- -regulations;regulations;

Tod a y Tod a y : 100,000. Business in LA must answer up to: 100,000. Business in LA must answer up to72 separate authorities.72 separate authorities.c.c. Computer T akeback: Among 28 global computer Computer T akeback: Among 28 global computer

firms, U.S. computer firms rank 9firms, U.S. computer firms rank 9 thth (Apple), 11(Apple), 11 thth (HP).(HP).

d.d. 80% of consumer are willing to pay more for 80% of consumer are willing to pay more for greengreen ..e.e. Dow Jones Sustainability IndexDow Jones Sustainability Indexf.f. I t' s a diffi c u lt y fo r Eu r ope a n fi r ms, a nd i t' s a h ugeI t' s a diffi c u lt y fo r Eu r ope a n fi r ms, a nd i t' s a h uge

diffi c u lt y fo r Ame r i ca n fi r msdiffi c u lt y fo r Ame r i ca n fi r ms ..


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EMEM DEVELOPMENTDEVELOPMENT

J apanJ apan63% of Japanese consumers are willing to pay63% of Japanese consumers are willing to pay5% more, 27% pay 15% more for green5% more, 27% pay 15% more for greenproducts.products.Green ProductsGreen Products

Toyota Hybrid PriusToyota Hybrid Prius uses half the petrol &uses half the petrol &emits only half the carbon dioxide.emits only half the carbon dioxide.

Sony Green Partner Sony Green Partner EuropeEuropeNo kidding!!! No kidding!!!


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TOYOTA Eco-Friendly Prius

~$20,000


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EM & TQMEM & TQM

Total Quality EnvironmentalTotal Quality EnvironmentalManagement (TQEM)Management (TQEM)

Prevention is be tter than compliancePrevention is be tter than complianceC ontinuou s improveme nt & inn ovation:C ontinuou s improveme nt & inn ovation:technolog y, process, d esign, ma ter ialtechnolog y, process, d esign, ma ter ial

Must involve suppliersMust involve suppliersB enefit ou tweighs costB enefit ou tweighs cost EM Is FreeEM Is Free


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EMEM BUSINESS IMPACTSBUSINESS IMPACTS

Pepsi : Saved $44 millionby switc hing f rom corruga ted to reu sable plastic s hippin g container sf or one liter & 20 oz bo ttles, conser ving 196million lb of corruga tedma ter ial.

Texas Instruments :Saved $8 million each year by reducing its t ransitpack ag ing budge t f or itssem i-conductor businessthru sour ce reduction,recyc ling & use of reu sable pack ag ing.

Commonwealth Edison :

Produced $50 million infinancial benefits f rom the impleme ntation of L if e-C ycle A nalysis approa ch.

Dow Corning : Saved

$2.3 million by using reconditi oned steel drum in 1995. I t also conser ved7.8 million lb of steel .


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GSCMGSCM LIFE CYCLELIFE CYCLEANALYSIS/ASSESSMENTANALYSIS/ASSESSMENT

D esign R aw Mat. L og istics M anuf acture R etailer/C ustomer R ecycleR euseD isposal


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CRISIS? OPPORTUNITY?CRISIS? OPPORTUNITY?


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W e are convinced that

being good to the environment isalso good for business and have every intention of keeping it

that way.

- 1997 Xerox EHS Progress Report

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SCM StudentNotes 810S06