MANAGING SUPPLY. Competitive Strategy for A Sustainable Future. Ling Li Old Dominion University, USA

Transcription

1 MANAGING SUPPLY CHAIN AND LOGISTICS Competitive Strategy for A Sustainable Future Ling Li Old Dominion University, USA World Scientific NEW JERSEY LONDON SINGAPORE BEIJING SHANGHAI HONG KONG TAIPEI CHENNAI

2 Contents Dedication Preface Acknowledgements Table of Contents List of Tables List of Figures v vii xi xiii xxv xxvii PART 1: STRATEGIC ISSUES AND SUPPLY CHAIN DESIGN Chapter 1 Supply Chain Management and Strategy Understanding the Supply Chain and Supply Chain Management Virtual Integration in the Supply Chain The Container Box From Material Management to Supply Chain Management The Changing Paradigm of Supply Chain Management Supply Chain Management Models Competitive priorities and manufacturing strategy Efficient supply chain and responsive supply chain Clock-speed of product, process, and Organization life cycles Pull and push manufacturing processes Extending the Enterprise: Collaborative Flanning, Porecasting, and Replenishment (CPFR) The basics ofcpfr Major activities of CPFR CPFR in practice 24 xiii

3 xiv Managing Supply Chain and Logistics 1.8 Impact of Globalization in Supply Chain Management Supply chain Management issues in the US Supply chain management issues in Europe Supply chain management issues in Asia Supply chain management issues in Latin America Supply Chain Management Issues in the BRIC Countries Summary Supply chain management challenges Road map for supply chain management 33 References 34 Chapter 2 The Right Design of a Supply Chain Design the Right Supply Chain Responsive Supply Chain in the Manufacturing Industry Responsive supply chain and a fast clock-speed product: The personal Computer Dell is cloning a push model Responsive supply chain and medium clock-speed product: The automobile industry Responsive supply chain and slow clock-speed product: Commercial aircraft Boeing 787 moves to batch production and reduces cycle time Efficient Supply Chain in the Manufacturing Industry Efficient supply chain and fast clock-speed product: The apparel industry ZARA does everything by itself, from procurement to delivery Efficient supply chain and medium clock-speed product: Anheuser-Busch, Inc Efficient supply chain and slow clock-speed product: The steel industry Service Industry The book industry: Amazon.com The retail industry: Walmart Synchronizing the Supply Chain 57

4 Contents xv Linking manufacturer to retailer: HP and Walmart Linking suppliers to manufacturers: Covisint Lessons to Learn Retail industry: Kmart The PC industry: IBM Summary 63 Questions for Pondering 64 References 65 PART 2: PURCHASING, PROCUREMENT, AND SUPPLY RELATIONSHIPS Chapter 3 Purchasing and Procurement The Role of Purchasing Introduction to purchasing Commercial purchasing and industry purchasing Purchasing and procurement Evolution of purchasing and supply chain management Commodity types and procurement strategy Centralized purchasing vs. decentralized purchasing Procurement Procedure Supplier market analysis Types of request Purchase plan Implementation Procurement in a Digital World Electronic Integration in purchasing Vertical and horizontal partnerships One or many relationships e-marketplace Supplier-oriented marketplace Buyer-oriented marketplace Intermediary-oriented marketplace Disintermediation and reintermediation Green Purchasing and Supply Chain Management Total Cost of Ownership Analysis in Procurement 89

5 xvi Managing Supply Chain and Logistics 3.6 Enhancing Value through Purchasing and Procurement Purchasing Performance Metrics Metrics for measuring purchasing efficiency Metrics for measuring purchasing effectiveness Summary 94 Questions for Pondering 95 Problems 96 References 97 Chapter 4 Choosing the Right Supply Chain Partner The Basics of Supply Relationships Types of supply relationships Strategie sourcing Supplier base development Supplier Selection Value analysis Decision model for choosing the right supplier Preference matrix for vender rating Make-or-buy decision for making outsourcing decision Decision tree for sourcing strategy Supplier certificate ISO 9000 family of Standards Trust and commitment of supply chain partners Outsourcing Creating outsourcing vision Model for implementing outsourcing Outsourcing benefits and risks Offshoring and Reshoring Offshoring Reshoring Third Party Logistics Current State of third party logistics market Factors that lead to a successful relationship between third party logistics providers and shippers Select a 3PL partner in an emerging market Dissolving Supply Relationships in the Supply Chain 128 I

6 Contents xvii 4.7 Enhancing Value through Supply Relationships and Strategie Sourcing Sourcing Performance Metrics Summary 130 Questions for Pondering 131 Problems 131 References 134 Supplement 4.1: Discount Cash Flow Analysis 135 PART 3: DEMAND AND SUPPLY INTEGRATION IN SUPPLY CHAIN Chapter 5 Demand Management and Customer Order Forecast Demand Management through Collaborative Forecasting Forecast characteristics Forecast in efficient supply chain vs. responsive supply chain A better method: Collaborative forecasting in supply chain Components of Demand Forecasting Patterns of demand Spatial demand versus temporal demand Regulär versus lumpy demand Independent versus dependent demand Managing the forecasting process Quantitative Forecasting Methods Moving average Weighted moving average Exponential smoothing Double exponential smoothing for trended data Holt-Winter's method for additive seasonal data Qualitative Forecasting Methods Reduce Forecast Variability Sources of variability Measure variability Measure bias and accuracy Tracking signal 167

7 xviii Managing Supply Chain and Logistics Understand the product life cycle Forecasting for new products Managing end-of-life-cycle products Reduce demand variability and increase production flexibility Forecasting for Demand Management Enhance value through synchronizing demand forecast Delayed differentiation and postponement Demand Management Performance Metrics Summary 174 Questions for Pondering 175 Problems 175 References 178 Supplement 5.1: Synchronizing Production and Inventory Management in the Supply Chain: Introduction to Beer Game 179 Chapter 6 Transforming Demand: Flanning on Supply Flow Transforming Demand through Production Flanning Aggregate Production Flanning Dimensions of production planning Production planning alternatives Production planning strategies Master Production Schedule The basics of master production schedule Available to promise Available to seil Digital Solution: Global available-to-promise Collaborative Planning Overview of collaborative planning Pull and push boundary in production planning Manufacturing flexibility Synchronization supply flow HP example Demand Transformation Enhancing value through demand and supply flow management Demand transformation Performance metrics 202

8 Contents xix 6.6 Summary 203 Questions for Pondering 203 Problems 204 References 206 Chapter 7 Managing Material Flow and Inventory in the Supply Chain The Importance of Managing Material Flow and Inventory Inventory Concepts Definition of inventory Purpose of holding inventory in supply chain Inventory for independent demand and dependent demand The cost of holding inventory The cost of inaccurate inventory Information Inventory measures Managing Inventory Cost EOQ-based Inventory Models Economic order quantity Inventory replenishment Reorder point system Inventory replenishment Periodic review system Improving Customer Service Level Managing Safety Stock Safety stock Cycle Service level Fili rate Innovative Approaches to Managing Inventory Countermeasures to bullwhip effects Push-pull strategy in inventory management Vendor managed inventory Inventory reduction: Lean inventory system Issues related to Information technology Enhancing Value through Inventory Management in Supply Chain Inventory Management Performance Metrics Summary 234 Questions for Pondering 235 Problems 235 References 240 Supplement 7.1: Quantity Discount 241

9 XX Managing Supply Chain and Logistics PART 4: LOGISITCS NETWORK DESIGN AND TRANSPORTATION Chapter 8 Logistics Network Design and Distribution Logistics in Supply Chain Management Facility configuration of global supply chain Reverse logistics network Reverse logistics network for used battery recycling Data for Logistics Network Planning Data sources Data checklist Techniques for Logistics Network Configuration Optimization model Computer Simulation Henristics model Expert systems and decision support systems Facility Location and Configuration Single facility location The center of gravity method The median method Preference matrix method for determining distribution center Configure multiple facilities Allocating customers to existing distribution centers considering variable costs only Developing a logistics system considering both fixed and variable costs Warehouse Nature and importance of warehouses Warehouses in the supply chain Public and private warehouses Types of warehouses New Logistic Models Cross-docking Merge-in-transit Enhancing Value through Logistics Management in the Supply Chain 283

10 Contents xxi 8.8 Summary 283 Questions for Pondering 284 Problems 284 References 286 Chapter 9 Transportation Service and Distribution Systems Transportation Transportation service provider: Carriers Customers: Shippers Overview of Carrier Operations Motor carrier Railroad carrier Water carrier Air carrier Pipeline Intermodal service Containerization The Network of Shipper and Carrier in e-distribution Carrier side e-distribution Shipper side e-distribution Shipper and carrier in e-distribution The Rise of Intermediaries in Transportation The rise of intermediaries Freight forwarder Transportation brokers Shippers association Intermodal marketing Company Third-party logistics in transportation services Last-mile delivery A last-mile delivery case: The collaboration of Talbots, DHL, and US Postal Service Managing less-than-truckload (LTL) shipments Fourth-party logistics in transportation service Trade-Off of Transportation and Inventory Costs Vehicle Routing and Scheduling Characteristics describing vehicle routing 312

11 xxii Managing Supply Chain and Logistics Solution procedure for vehicle routing and scheduling e-business tools for creating routes Railway Freight Car Scheduling Railway system Characteristics describing railway freight scheduling Enhance Value through Transportation Summary 324 Questions for Pondering 324 Problems 325 References 327 Appendix 1: World Busiest Container Ports: Top Appendix 2: World Busiest Airports by Cargo Traffic: Top PART 5: EMERGING ISSUES IN SUPPLY CHAIN Chapter 10 Emerging Issues in Supply Chain Management Green Supply Chain Green sourcing and procurement Green product design Green manufacturing Green packaging and distribution Reverse Logistics Disaster Relief Supply Chain Managing Disaster Relief Material Flow and Inventory Summary 343 Questions for Pondering 344 References 344 Chapter 11 Information Flow and Big Data Science in Supply Chain Management Data Science in Supply Chain Management Data collection and Organization Information extraction and analytic models Knowledge management Data warehousing 351

12 Contents Data mining 11.2 Big Data-based Supply Chain Management Decisions 11.3 Business Intelligence Intelligent value chain The value of business intelligence Applying business intelligence to reduce bullwhip effects Effects of Information flow on material flow 11.4 Using Social Media Text Mining to Improve Customer Service in a Supply Chain 11.5 Technology Designed to Combat Fakes in the Global Supply Chain 11.6 Enhancing Value through Managing Information Flow and Big Data in the Supply Chain 11.7 Summary Questions for Pondering References PART 6: SUPPLY CHAIN PERFORMANCE AND EVALUATION Chapter 12 Performance Measures: From Order Winning to Order Fulfillment 12.1 Introduction 12.2 Order Winning in the Supply Chain Identify and capture the right customers Create a customer-responsive supply chain 12.3 Order Fulfilling in the Supply Chain Creating a collaborative, flexible, and cost-effective order fulfillment process Choosing the right technology to support supply chain Operations Fulfilling customer orders in the supply chain 12.4 Using Financial Data to Measure Supply Chain Performance Metrics for material flow Metrics for fund flow

13 xxiv Managing Supply Chain and Logistics Metrics for supply chain Interactive activities using cash-to-cash cycle time Performance analysis Kroger and Whole Foods The Shortcomings of financial measurements The Supply Chain Operations Reference Model (SCOR) The Balanced Scorecard The Future of Supply Chain Management 390 Questions for Pondering 392 Problems 392 References 394 Subject Index 395 Company Index. 401