Basics of Supply Chains

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Basics of Supply Chains

• Entities, Flows, Cycles and Processes
• Bird Eye View

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Outline

• Definitions
• Entity and flow
• Cycles
• Processes 1 Global Supply Chain Forum
• Processes 2 Supply Chain Operations Reference
  Model

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APICS definition of SC

• Global network used to deliver products and
  services from raw material to end customers
  through an engineered flow of information,
  physical distribution and cash.

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Wrong Definitions/ Perspectives

• 3PL company it is warehouse and transportation
  management
• ERP vendor it is advanced modules to be added to
  the companys original ERP system
• Consulting Firm it is strategy building and
  market analysis
• Financial Analyst finding ways to reduce cost

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Examples of Supply Chains

• DELL e-commerce and customization.
• Zara innovative versus functional products.
• Toyota efficient production.
• Amazon / Borders / Barnes and Noble bad
  synchronization between physical flow and
  e-commerce.
• Wal-Mart cross-docking, VMI, super Wal-Mart,
  data mining etc.

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• MISSING SLIDES

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How to View SC

• Entities Flows
• Cycles
• Processes

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Supply Chain Manufacturing Example
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• Class Exercise I

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Thinking processes

• Functional thinking limits cooperation and
  impedes creative thinking.
• Process management promotes collaboration,
  facilitating customer satisfaction at low cost.
• Thinking ERP thinking processes

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• MISSING SLIDES

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Process Management

• Process Management requires companies to
• Recognize the limiting nature of functional
  structures
• Instill process thinking throughout the company
• Process integration remains rare
• less than 10 of companies world wide have made a
  serious and successful effort
• Requires major changes to measurement, job
  design, management roles, and organizational
  structure

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Demand Management

• Duties
• Forecasting
• Scheduling plant operations
• Capacity requirements
• Managing inventory
• Fulfilling orders
• Sales tracking
• Why cross-functional, cross-company? , Who?

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Order fulfillment

• Duties
• Insuring the delivery of the right product at the
  right time and location in the right amounts.
• Why cross-functional, cross-company? , Who?

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Manufacturing Flow Management

• Duties
• Managing physical, information and funding flow
• Ensuring the balance between sales and operations
  planning
• Balancing capacity and demand
• Why cross-functional, cross-company? , Who?

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Supplier relationship management

• Duties
• Selecting, rating and scoring suppliers
• Building strategic alliances
• Automating the supply process
• Why cross-functional, cross-company? , Who?

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• Class Exercise II

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Supply Chain Operations Reference SCOR

• The Supply-Chain Council was established in 1996.
  www.supply-chain.org
• The Supply-Chain Council now has closer to 1,000
  corporate members world-wide and has established
  international chapters in North America, Europe,
  Greater China, Japan, Australia/New Zealand,
  South East Asia, Brazil and Southern Africa. 
  Development of additional chapters in India and
  South America are underway.   The Supply-Chain
  Council's membership consists primarily
  practitioners representing a broad cross section
  of industries, including manufacturers, services,
  distributors, and retailers.

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1- Situation mapping
3- Best practices analysis
2- Benchmarking

• Capture
• the as-is state and derive the to-be future
  state

• Quantify the best in class practices

• Characterize
• the
• management
• and software
• Practices that
• resulted in
• the best
• practices

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Supply-Chain Operations Reference (SCOR) Model

• Five core processes for Level 1
• Source
• Make
• Deliver
• Return
• Plan
• Three expanded processes for Level 2
• Planning
• Execution
• Enable

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Planning

• Balance resources with requirements and
  communicate the plan to the whole supply chain
• Management of business rules, performances,
  compliances and regulatory requirements
• Align the unit plan with the financial plan

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Source

• Schedule deliveries, receive and authorize
  supplier payments
• Identify and select supply sources when not
  predetermined for ETO
• Manage business rules, assess suppliers
  performance and maintain data

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• MISSING SLIDES

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Cascading in SCOR2-Category
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Cascading in SCOR3-Process elements
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P3.3 Production plan S1.1, S2.1, S3.3 Scheduled
Receipts M1.2, M1.3, M1.4, M1.5, M1.6
Information Feedback EM5 Equipment and
Facilities Schedules and Plans
Input
P3.2, S1.1, S2.1, S3.3, D1.3, D1.8, D4.2
Production Schedule
Output
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Cascading in SCOR4-decompose process elements
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Level 1 KPIs
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• MISSING SLIDES

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Limits to SCOR model

• It does not apply to the following processes
• Sales and marketing
• RD
• Product development
• Post delivery customer support
• It also assumes
• training
• Quality
• IT

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Check list

• Name the basic entities, flows and cycles
  involved in SC
• Compare between the functional and process views
  of SC management
• Name the basic processes as defined by the GSCF
  model
• Name the basic processes as defin

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Questions ?