Production Management II. Supply Chain Management I
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1 Production Management II - Lecture 6 - Supply Chain Management I Assistent: M.Tech. Amit Garg ga@fir.rwth-aachen.de FIR Raum 209 Tel.:
2 Cooperation Portfolio Capacity- Management Multiple Capacity In-/Outsourcing Multiple In-/Outsourcing U i Multiple Sourcing U i U i U 1 U 1 U 1 U i P 1 P 2 P 3 P 4 P 5 Selective Capacity In-/Outsourcing U i P 1 P 2 P 3 P 4 P 5 Selective In-/Outsourcing U i P 1 P 2 P 3 P 4 P 5 Selective Sourcing U 1 P 1 P 2 P 3 P 4 P 5 P 1 P 2 P 3 P 4 P 5 U 1 U 1 P 1 P 2 P 3 P 4 P 5 Non-Sourcing Single-Outsourcing Single-Sourcing U i U i U i U 1 U 1 U 1 P 1 P 2 P 3 P 4 P 5 P 1 P 2 P 3 P 4 P 5 P 1 P 2 P 3 P 4 P 5 Competece- Management
3 SCOR (Supply Chain Operational Reference Model) Companyborders Companyborders Distributor of the Distributor Internal und external Distributors Own Company Internal und external s of the Deliveriing Purchasing Producing Delivering Purchasing Producing Delivering Purchasing Producing Delivering Purchasing Take back Take back Take back Take back Take back Take back Take back Take back Collective planning of all Processes Quelle: Supply Chain Council
4 Forms of the Supply Chain Management Central coordinated Supply Chain Production-, Shippingorders Stock, Arrival of Goods Installationcompany Product development, Logisticcoordinator Production-, Shippingorders Stock, Arrival of Goods Shippingorders -Orders Packer Distributor Dominated Supply Chain General Agreement, Deliver- Plans, Calls General Agreement, Deliverplans, Kanbancalls General Agreement, Deliver Plans, Calls Remodel Surfacefinish Final Installation OEM Stocks Productionorders Stocks Productionorders Stocks Productionorders For exsample: Car Manufacturers
5 Planing level of the Supply Chain Management Level Discription IT-Systemfunctions Supply Chain Configuration Supply Chain Planning Construction of Production- and Logistic structures Planning of Stocks, Planning of Assets and Capacities Product-Chain-Elements Masterplanning Productplanning Transportplanning Problemmanagementplanning Controlling Supply Chain Execution Inducement and Confirmation of Orders Contract Processing Transport Contract Processing
6 Designing, Planning, Controlling and Integration Tasks at the Overlapping Planning Level Supply Chain Management-Tasks: Configuration and Optimization of the Supply Chain Planning Informationmanagement for fast Reaction on Problems Planning of a Manufacturer Sales Planning, Production-Programm-Planning Planning of a Distributor Sales Planning, Stock Planning Requirements Planning -Order- Processing Requirement Planning -Order- Processing Purchasing Detailed Planning Detailed Planning Shipping Planning Purchasing Stock Planning Stockreceipt Installation Package Stockreceipt Storage Transport Storage Transport
7 Network orientated Supply Chain Management Planned and Coordinated Connectionand Powerrelationship balanced one-sided E-Community E-Market- Place Classical network OEM Market SC Network B Zulieferer Zulieferer Zulieferer Zulieferer Zulieferer Zulieferer Zulieferer Zulieferer Zulieferer Supply Chain Network SC Network A Network OEM Market Market Market Tier-2 Tier-1 instable Time of Company-Communication stable Cell Consulting AG
8 Problems with the SC Whipshaw - Effect Market Volutality ± 10 % Local Stocks Regional Stock Central Stock Safety Lags (Transfer) Installation Factories Effeciency- Differences ± % Quelle: Boutellier
9 Problems within the SC Bull Whip - Effect Material flow ± 70% ± 3% Stocks/ Order size Stocks/ Order size Stocks/ Order size t t t Stocks/ Order size t Producer 1 2 Information flow Stocks Order size
10 Potentials of Supply Chain Management Classical Material Organization and PPS Targets of each area involved: throw it over the wall - Mentality Assets are planned with a high security option right from the beginning Organization of interfaces Asset changes are running through the complete supply chain and influence all partners involved Local planning for singel processes without regarding influences on other partners Supply Chain Management Takes all partners from the first supplier to the customer into account Delivery to the customer is the main target for all partners involved Assets are only the last chance to react on order changes Active integration of different functions and systems within the supply chain Planning for the complied supply chain taking influences on different partner and their resources into account Targets of SCM Reduction of assets Reduction of supply time Reduction of costs through an increased resource planning and higher planning efficiency
11 Potentials of Supply Chain Management Financial flow Physical Physical Process Producer Process Commerce Physical Process Potentials Available to promise Finding bottle necks Information flow Planning SCM Potentials Planning security Higher flexibility Order tracking Higher cost transparency Reduction of delivery time Active asset management Faster business processes Baumgarten, TU Berlin 2001
12 Logistics Chain Product A Product B Linear information flow Linear flow of goods Separation of product and service Separate handling of information in each process step
13 Production Network Company n - lateral goods flows Integrated information flow Reduction of company borders
14 Market Place as Connection between Seller and Real Market Place Virtual Market Place A B A B F C F Virtual Marketplace C E D E D Combination of traditional market places Integration of electronic market places
15 Problems with Electronic Market Places Reaching critical mass Income mainly based on number of transactions Variable costs Costs Fixed costs Critical mass Number of transactions Fixed costs: Rent Personal costs Marketing costs Organization Variable costs: care Administration of database Transaction specific costs
16 Purchase Processes Internet based purchase platform Internet based B2B Market Internet based selling platform Offerer Offerer Offerer Offerer Offerer Offerer Market place Offerer Offerer Offerer n:1-relation n:1:m-relation 1:m-Relation Example: Example: Example:
17 E-Business Market Place bidding driven Sell Side System nutral request driven Buy Side System Bilateral Market Place Organized by: Selling company Sell Side Market Place Organized by: Buying company Buy Side Market Place Organized by: Nutral Organizer Organized by: Selling company, Consortium Seller Buyer Organized by: Buying company, Consortium
18 Integration of Virtual Market Places in SCM Vertical electronic market place, additional to SCM Supply Chain 1 C1 C2 C3 C4 Supply Chain 2 C1 C2 C3 C4 Supply Chain 3 C1 C2 C3 C4 Legend: C = Company horizontal electronic Marketplace, additional to SCM Vertical electronic market place, additional to SCM
19 Example for a Market Place within the Supply Chain wtransnet is internet based logistic trading platform (horizontal Marketplace) Better usage of trucks Reduction of waiting time Higher transparency requests counted in March 2003
20 Example for a Market Place within the Supply Chain PolyOne is a market place designed for the chemical industry One of the largest vertical, electronic market places.
21 Future of Virtual Market Places Customization My Marketplace Commerce Transaction specific information Transactions Integrated services Content Information archive Databases News service Analyses and comments Community Possibility for discussions Expert-Chat Career-Center Controlling systems My Products My Service Customization Integrated product development Integrated projects Connectivity Open communication with third parties in different marketplaces Standard Higher customer loyality
22 Outlook CRM System e-marketplace ERP System Supply Chain Management System E-Procurement System Cross linking becomes more important in the future. Market Places have to integrate existing systems as good as possible Company.com web site
23 Production Management II - Lecture 6 - Supply Chain Management I Assistant: Dipl.-Ing. Roland König R.koenig@wzl.rwth-aachen.de ADITEC R. 209 Tel.:
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