Supply Chain Management

Chapter 11pp. 338-370

June 28, 2012

The Transformation Process – Systems Theory

Inputs•Land•Labor•Capital•Information

Outputs•Goods•Services

Transformation/Conversion

Process

Control

Feedback

Feedback Feedback

Value-Added

Feedback = measurements taken at various points in the transformation process

Control = The comparison of feedback against previously established standards to determine if corrective action is needed.

Supply Chains

• Definition (again)• More succinct

– Source– Make – Deliver

Supply Chain Processes

Production(make)

Distribution(deliver)

Procurement(source)

Supply Chain for ServiceProviders

• More difficult than manufacturing• Does not focus on the flow of physical goods• Focuses on human resources and support

services• More compact and less extended

7

Supply Chains, Uncertainty, Inventory

Profile of Inventory Level Over Time

Quantityon hand

Q

Receive order

Placeorder

Receive order

Placeorder

Receive order

Lead time

Reorderpoint

Demand rate

Time

Constant Demand

Bullwhip effect

Supply ChainManagement (SCM)

• Definition• Keys

– information– communication– cooperation– trust

• Benefits

Information Technology and SCM

• E-business• EDI• Bar coding/POS• RFID

Radio Frequency Identification

Radio Frequency Identification

Information Technology and SCM

• E-business• EDI• Bar coding/POS• Internet

– IBM (example only)• http://www.youtube.com/watch?v=xAe1dxIf_Kk

– Reverse auctions • http://www.freightquote.com/tour/

Lean Supply Chains and SCM

• Lean suppliers• Lean procurement• Lean manufacturing• Lean warehousing• Lean transportation• Lean customers

Lean Supply Chains and SCM

• Benefits– Speed and responsiveness– Reduced inventories– Reduced costs– Improved customer satisfaction– Competitive weapon

Global Supply Chains

• iPhone • See earlier discussion

– Natural disasters• Duties and tariffs