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AgSCM Define
AgSCM Define
Supply Chain the core business processes in an organization that create and deliver a product or service, from concept through development and manufacturing or conversion, and into a market for consumption Supply Chain Management the methods, systems and leadership that continuously improve an organizations integrated processes for product and service design, purchasing, inventory management, logistics, distribution and customer satisfaction
Management of all parties of the supply chain in conjunction with e-Business Management of the whole supply chain
1980s to 1990s
1970s to 1980s
SCM Definitions
Defined by Ellram and Cooper (1990) Sengupta and Turnbull (1996) Handfield and Nichols (1999) Definition SCM is an integrative philosophy to manage the total flow of distribution channel from supplier to ultimate user SCM is the process of effectively managing the flow of materials and finished goods from vendors to customers using manufacturing facilities and warehouses as intermediate stops SCM is the integration of these activities (activities associated with flow and transformation of goods from raw materials stage, through to the end user as well as associated information flows) through improved supply chain relationships to achieve sustainable competitive advantage SCM is the process of optimizing a companys internal practices and improving the interaction with its suppliers and customers
SCM Definitions
Defined by Definition
SCM involves seamlessly moving raw material through production and into the hands of the end user
SCM is the practice of co-coordinating the flow of goods, services, information, and finances as they move from raw material to parts supplier to manufacturer to wholesaler to retailer to consumer Supply Chain Management involves the flows between and among stages in a supply chain to maximize total profitability. SCM is more than a simple tool to evaluate and optimize a supply chain; it is a complex, structured business relationship model. It takes into consideration all aspects of the events required to produce your companys product in the most efficient and cost effective manner possible
SCM Definitions
Defined by Shapiro (2004) Definition SCM as a new business paradigm was motivated by interest in integrating procurement, manufacturing, and distribution activities integration made possible by advances in IT It starts with customer and ends with customer Through the loop flow all materials, finished goods, information, and transactions It requires looking at business as one continuous, seamless process This process absorbs distinct functions such as forecasting, purchasing, manufacturing, distribution, sales, and marketing into a continuous business transaction
Developing a chain that links producers with consumers Each component of the supply chain is connected to other parts of the supply chain by
the flow of goods and services in one direction, the flow of orders and money in the other direction, and the flow of information in both directions.
Information
Suppliers
Product Funds
Customer
Operational efficiency and effectiveness for improvement in quality, reduction in losses, and increased customer satisfaction
Identify high loss points and poor product flow through systems analysis
1. 2. 3.
Map the flow of product- process flow chart Describe each handling process Measure losses at each point
Focus is on how to work together to deliver a top quality product to the consumer Focus on long term relationships not one-off transactions Main key is trust between members
Shift 1: From Cross-Functional Integration to Cross-Enterprise Old question: how do we get the various functional areas of our company to work together to supply product to immediate customers? New question: how to record and do activities across companies, as well as across internal functions, to supply product to the market? Shift 2: From Physical Efficiency to Market Mediation/ Negotiation Old question: how do we minimize the costs our company incurs in production and distribution of our products? New question: how do we minimize the cost of matching supply and demand while continuing to reduce the costs of production and distribution? Shift 3: From Supply Focus to Demand Focus. Old question: how can we improve the way we supply product in order to match supply and demand better, given the demand pattern? New question: how can we get earlier demand information or affect the demand pattern to match supply and demand?
Shift 4: From single company, product design to collaborative, concurrent product, process and supply chain design Old question: how should our company design products to minimize product cost (our cost of materials, production, and distribution)? New question: how should collaborators designed the product, process, and supply chain to minimize cost? Shift 5: From cost reduction to breakthrough business models. Old question: how can we reduce our company's production and distribution costs? New question: what new supply chain and marketing approach would lead to a breakthrough in customer value? Shift 6: From mass-market supply to tailored offerings. Old question: how should we organize our company's operations to serve the mass-market efficiently while offering customized product? New question: how should we organize a supply chain to serve each customer or segment uniquely and provide a tailored customer experience?
To determine efficient management structures To clearly identify roles of each supply chain member To model the system To develop information systems To identify bottlenecks and inefficiencies To redesign system To develop metrics for performance measurement (KPIs)
Plan
Deliver
Deliver
Make
Deliver
Source
Make
Delive r
Delive r
Make
Deliver Source
Cycle View
Customer Order Cycle Replenishment Cycle Manufacturing Cycle Procurement Cycle Push Process: executed in anticipation of customer orders Pull Process: execution is initiated in response to a customer order
Customer Order Cycles exist on the boundary between customers and retailers Replenishment Cycles exist on the boundary between the retailer and distributor Manufacturing Cycles exist on the boundary between the distributor and the manufacturer Procurement Cycles exist on the boundary between the supply and manufacturer
Procurement Cycle
Suppliers Manufacturers
Manufacturing Cycle
Wholesale Distributors
Customers
Information Flow
Goods Flow
Revenue Flow
Customer arrival
Customer Arrival Physical entry, phone or web interface Goal - facilitate interactions by easy access to goods, services or information with little delay to convert arrivals to orders Metrics - delay time, queueing, congestion Customer Order Entry Customer specifies products or services to be acquired Goal - ensure order entry is timely accurate and communicated to all processes effecting it
Order Fulfillment Order filled and sent to customer Objective - get the correct and complete order to the customer at the promised date at the lowest cost and adjust internal stock records accordingly metrics - on time deliveries, correct orders , Order Receiving Physical delivery of product or service to customer and cash transferred to retailer
Replenishment Cycle
Manufacturing Cycle
Manufacturer
Distributor &
Order arrival
Receiving
Production Scheduling
Procurement Cycle
Order arrival
Receiving at manufacturer
Pull Process - Initiated in response to a customer demand. Also known as make to order processes or reactive processes.
Push Process - Initiated in anticipation of a customer demand. Also known as make to stock processes or speculative processes.
Obvious difference
In supply chains, some stages operate as push processes and others as pull processes.
PUSH PROCESSES
PULL PROCESSES
PUSH PROCESSES
PULL PROCESSES