Supply Chain Management

Module 5

Role of IT in supply chain Information is a key supply chain driver. Characteristics of Information in making supply chain decisions Information must be accurate Information must be accessible in a timely manner Information must be of the right kind Information must be shared.

The Supply chain macro Processes The classification of macro supply chain are Customer relationship management (CRM)
Its a process focus on do nstream interactions

Internal supply chain management (I!CM)

"ocus on internal operations

!upplier relationship management (!RM)

Its a process focus on upstream interactions

In#$ouse or %utsource

Transaction Management "oundation (TM")

Customer Relationship Management The CRM macro process consists of processes that take place bet een an enterprise and customers. &ey 'rocesses of CRM Marketing !ell %rder Management Call(!ervice center

Internal Supply Chain Management

I!CM includes all processes involved in planning for fulfilling a customer order. 'rocesses in I!CM !trategic planning )emand 'lanning !upply 'lanning "ulfillment "ield !ervice

Supplier Relationship Management

&ey processes of !RM

)esign Collaboration !ource *egotiate +uy !upply Collaboration

Third and Fourth Party Logistics providers 3PL It targets a function ,pl as a general manages one or more functions not all the functions. 4PL Targets management of entire process -pl as a general contractor ho manages other ,pls. truckers. for arders. custom brokers and others

Supplier Scoring and assessment

Replenishment lead time %n#Time performance !upply fle/ibility )elivery fre0uency(minimum lot si1e !upply 0uality Inbound transportation cost 'ricing terms Information coordination capability )esign Collaboration 2/change rates. ta/es and duties !upplier viability

The Procurement Process

%nce supplier have been selected. contracts are in place. and the product has been designed. the buyer and suppliers engage in procurement transactions that begin ith buyer placing the order and end ith the buyer receiving and paying for the order.

i!!erences "et#een irect and Indirect Materials

irect Materials 3se 4ccounting Impact on 'roduction 'rocessing cost relative to value of transaction *umber of transactions 'roduction Cost of goods sold 4ny delay ill delay production 7o 7o

Indirect Materials Maintenance. repair and support operations !564 7ess direct impact $igh $igh

Product categori$ation "y value and critically

%igh

Lo# Lo# &alue'Cost %igh

Pricing ( Revenue Management !or Multiple Customers

4 classic e/ample of a market ith multiple customer segments is the airline industry. here business travelers are illing to pay a higher fare to travel a specific schedule. hereas leisure travelers are illing to shift their schedule to take advantage of lo er fares.

The firm must solve the follo ing t o problems for pricing 8 9hat price to charge each segment 8 $o to allocate limited capacity among the segments.

Revenue Management

4 firm must use the follo ing tactics effectively:

'rice based on the value assigned by each segment 3se of different prices for each segment "orecast at the segment level

Pricing ( revenue management !or perisha"le assets

9hat is perishable;
4ny asset that loses its value over time is perishable. like fruits. vegetables 6 pharmaceuticals. 2ven computers and cell phones come under perishable. The revenue management tactics used for perishable assets are <ary prices dynamically over time to ma/imi1e e/pected revenue %verbook sales of asset to account for cancellations

ynamic Pricing

)ynamic pricing. the tactic of varying price over time. is suitable for assets such as fashion apparel that have a clear date beyond hich they lose a lot of their value.

Pricing !or seasonal demand

!easonal peaks of demand are common occurrence in many supply chains.

Pricing !or "ul) and spot contracts

Most firms face a market in hich some customers purchase in bulk at a discount and other buy singe units or small lots at a higher price.

Te*t