Supply Chain Management

Transcription

1 UKZN: Management Development Program September 14 th 2018 Llewellyn R. Roberts President, L. Roberts & Associates Inc. Management Development & Consulting Lecturer and Consultant The Supply Chain and Logistics Institute Georgia Institute of Technology 1

2 Learning Objectives Understand the development of supply chain management in leading corporations. Appreciate the importance and role of supply chain management among private and public organizations. Understand the contributions of a supply chain approach to organizational efficiency and effectiveness. Analyze the benefits that can accrue from implementing effective supply chain practices. Understand the major challenges and issues facing organizations developing and implementing supply chain strategies. Discuss the major change drivers in our economy and in the global marketplace. 2

3 What is Supply Chain Management? All those processes from end user through original suppliers that provide products and services and information that add value for customers. 3

4 What is Supply Chain Management? Aimed at adding value in the eyes of the customer. Encompasses more than logistics, product supply or even integrating operations-should be viewed as an integrating process used to create and sustain competitive advantage based on the delivery to customers of basic and unexpected services. Ultimate aim is to improve a company s competitive position in the global marketplace and to sustain that position. 4

5 : Introduction Supply chain management now part of the business vocabulary. Impact of global marketplace drastically changed the landscape of business. Change is rapid and continuous. Doing business in the comfort zone was no longer synonymous with success. 5

6 The Changing Business Landscape: Five Driving Forces The Empowered Consumer Power Shift in the Supply Chain Deregulation Globalization Technology 6

7 The Changing Business Landscape: Five Driving Forces The Empowered Consumer Impact on logistics is more direct Informed consumers have low tolerance for poor quality in products and services Changing demographics commands 24/7 service Increased customer service increases the importance of logistics and supply chains 7

8 The Changing Business Landscape: Five Driving Forces Power Shift in the Supply Chain Large retailers more demanding and commanding Focus upon distribution costs and their impact on everyday low prices Changing logistics and supply chain strategies resulted from shifts in the balance of economic power 8

9 The Changing Business Landscape: Five Driving Forces Deregulation Changing economic controls empowered creativity and competition Changes in transportation fewer or no economic controls over rates and services Change in financial institutions blurred traditional differences and increased competition Change in the communications industry also resulted in more competition Changes in the utility industry allows more competition 9

10 The Changing Business Landscape: Five Driving Forces Globalization Global marketplace concept Global network sourcing, manufacturing, marketing and distribution Global alternatives have blossomed No geography --- access available to the world New supply sources New manufacturing sources 10

11 The Changing Business Landscape: Five Driving Forces Technology Information Age provides new and unrestricted access My time, my place Warehouse technology has changed dramatically with computer devices in use from the office space to forklifts 11

12 The Changing Business Landscape: The Supply Chain Concept Development of the Concept Characteristics of Business Case for 12

13 The Changing Business Landscape: The Supply Chain Concept Development of the Concept Total systems cost - remains an important element of logistics analysis Outbound logistics - was the initial focus with higher value finished goods Inbound logistics deregulation allowed new focus on coordination of inbound and outbound movements Value chain analysis integrated logistics activities Terminology growing as supply chain concept matures 13

14 Figure 1-1 A View of Business Logistics in a Firm 14

15 Figure 1-2 Integrated Logistics Management 2000 s 15

16 Figure 1-3 Generic Value Chain 16

17 What is Supply Chain Management? An Integrating philosophy to manage the total flow of a distribution channel from supplier to ultimate customer. A strategic concept that involves understanding and managing the sequence of activities from supplier to customer that add value to the product supply pipeline. Integrative management of the sequential flow of logistical, conversion and service activities from vendors to ultimate consumers necessary to produce a product or service efficiently and effectively. 17

18 The Changing Business Landscape: The Supply Chain Concept Characteristics of Real-time two way information flows Integration and management of product flows Integration and management of money flow Customer service Levels must be tailored to each customer Not all customers require the same service Supply chain relationships Collaborative planning Share risks and rewards 18

19 The Changing Business Landscape: The Supply Chain Concept Characteristics of Inventory Visibility Pull systems Landed Cost Companies must realize that their strategies may affect the landed cost. Coordination of supply chain activities may lower the landed cost. 19

20 Supply Chain Objectives Recognizing the final customers service level requirements. Deciding where to position inventories along the supply chain and how much to stock at each point. Developing appropriate policies and procedures for managing the supply chain as a single entity. 20

21 Figure 1-4: Traditional Supply Chain/Pipeline Inventory Flow 1970s and 1980s 21

22 The Changing Business Landscape: The Supply Chain Concept Business Case for : Why so much attention on supply chain management? ECR and Best-in-class studies (see next two slides) Complexity of the supply chain Extended enterprise concept Two-way flow of Products Information Cash Inventory visibility 22

23 Figure 1-5 Supply Chain Pipeline 23

24 Figure 1-5: Comparison of Average Throughput Time of Dry Grocery Chain before and after ECR Implementation 24

25 Figure 1-6: Integrated Supply Chain 25

26 Figure 1-7: Running Lean Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Compaq Dell Number of times Dell and Compaq turn inventory over in each quarter, calculated at an annual rate. 26

27 Questions? 27

28 Case Study In your table teams read and discuss the case study and answer the questions posed. You will have 60 minutes for this case. 28