Supply chain Design &

Optimization
Prepared by:
AL-Zahrani, Khalid
AL-Suwalim, Othman
AL Kulayb, Ibrahim

Objectives

Define the Supply chain

design&Optimization.
Explain the Organizational Architecture
and information systems architecure.
Illustrate Databases Networks,
software,configuration and informatin
infrastructre design.
Show the most important stages of
supply network technology optimization .

Intoduction
In the beginning we will state the
elements of organizational
archituctre in parallel to
information systems architucture.
We will discuss the stages applied
from a company to reach an
advanced level of supply network
technology optimization.

Organizational architucture and information

systems architecture

Organizational strategy

These strategies are the fundementals of

supply chain management and includes
decisions about products,core competinces,
business strategies such as make-toorder,make-to-stock, logistics strategies and so
on

Information strategies

Translates the organizations strategy

into commitment to treat information
systems as strategic investments.
Sets princples , priorites and common
goals for network design.
Results in a high level end to end vision
of the information system structure.
Existing systems are compared with
what is envisioned by conducting gap
analysis with supply chain partners.

Information Content
Definition

Making decisions about type of data and

data collection methods,its degree of
accuracy and storing style. In addition to
access , controlling and analysis.
In extended SC it includes decisions
about targeted market segments ,
performance measures , product
distribution and profit sharing.

Information policies and

control

Methods used in information

infrastructure design, daily operation
and continius improvement initiatives to
ensure that the organizations data and
software systems perform as expected.
Requires training and ongoing
management support.

Information Infrastructure
Design
Establish translated policies and control into a
consistent and effective information systems
that reduces data duplication and errors.
Supports effective anlaysis and efficent
transaction processing
Provide detailed decisions for network
performing , software selection and
configuration of hardware and software.
Provides decisions for communication tools
and interface devices.

Databases,networks,softwares
and configuration

Exact decisions on networks, databases ,

specific vendor search and selection.
Makes decisions to add new technology or
update exisiting.
For the organization to maintain its
integrity,availability and data usefulness for
decision making, decisions of DBMS are
significant.
Choices on networking , softwares and
configuration decisions must be selected to
satisfy business requirments even as
providing a positive ROI.

Information infrastructure
change

For continus improvement and system

change the supply network design must
include progress plans.

Action plan, schedule , and

prioritization

IT action plans are results of operational

gap analysis , tactical system
improvement and strategy update
sessions. These plans must focus on
expendatures and improvement efforts.
These plans creates project schedules
and tasks. It also includes feedback
mechanisim to evaluate project success.

SC optimization

Often envolves developing capabilities to

find least cost solution for entire network.

Supply network optimization happens in

sequntial stages until it reaches
Extended enterprise stage.

Stages of Supply Network Technology

Optimization
2 : Semi
Functional
enterprise

3 : Integrated
Enterprise

4 : Extended
Enterprise

Static web sites

Website

Across all
functions

E-commerce

Integration

None

Batch

Internal process;
Design teams.

End-to-end
integration.
Across all parties

SC planning

Little exchange
of information

Inventory
reduction;
Demand
planning.

Forecasting,
Logistics ,
Enhanced
warehousing

CPFR

Production
scheduling

Simple MRP

MRP II

MRP-ERP

Integrated ERP

Integration with
Suppliers

Fax/Phone

EDI/Fax/Phone

EDI

VMI, online
RFQ

Customer
Delivery

Research

Local Inventory

Available-topromise

Capable-topromise

Stage

1: Multiple
Dysfunction

Capability

Internet

Explanation
VMI:

Means of optimizing supply chain performance in

which the manufacturer is responsible for maintaining the

distributors inventory

levels. The manufacturer has

access to the distributers inventory data

and is

responsible for generating purchase orders.

EDI :

Electronic communication system that provides

standards for

exchanging data via any electronic

means. By adhering to the same

standard, two

different companies, even in two different countries, can

electronically exchange documents

Multiple Choice Questions:

Q#1

Information content definition

involves making decisions on
A.

What data needs to be collectd .

B.

How it will be collected .

C.

How its accuracy will be maintained

D.

How will it be stored ,accessed and controlled.

E.

B,C,D

F.

A,B,C

G.

A,B,C,D

Q#2

Supply chain continuously increases

its
sophistication in terms of

A.

MRP and ERP

B.

Internal and external integration.

C.

SC planning and production scheduling

D.

Customer delivery

E.

A,B,C

F.

B,C,D

Q#3

At which stage companies use

documented processes and align key
performance measures to goals

A.

Stage 1: Multiple Dysfunction

B.

Stage 2: Semi-functional enterprise

C.

Both of the above.

D.

Stage 3: Integrated enterprise

Q#4

A.

All of the following statements are

FALSE except :
A company must move all its business units to the
next level at the same time

B.

CPFR reffers to Cumulitave planning & forcasting &

replanishment

C.

Choices on networking , softwares and configuration

decisions must be selected to satisfy business
requirments even as providing a positive ROI.

D.

In stage 4: extended enterprise requires overcoming

cultural and technical resistance to change.