Asistensi 4 PMO

Ch. 11 Managing Supply

Chain

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 Supply Chain Strategy (1)

Many Suppliers Few Suppliers

Request for quotation. Long-term relationship with a few
This is common strategy when product dedicated suppliers.
are commodities. Can create value by allowing suppliers
Suppliers aggresively compete with to have economics of scale and learning
curve that yields both lower transaction
another.
cost and production cost.
Usually going to the lowest bidder.
Example:
Example:
Ford, Motorola, Mark & Spencer
Coca Cola Company

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 Supply Chain Strategy (2)

Vertical Integration Joint Ventures

Developing the ability to produce goods or Two firm come together to take on one
services previously purchase or actually buying a
project. Both firm are equally invested
supplier or a distributor.
in the project in terms of money, time,
Example Backward:
and resource to build an original
Apple, Indofood
concept.
Example Forward:
Example:
Apple, Pepsi
MGM, Warner Brothers, 2oth Century Fox, Paramount Daimler and BMW Develop and
Distribute and operate their own movie theaters. produce standard automobile
Example both integration: components.
Exxon monil, Royal Dutch Shell, Conocophillips, BP,
Petronas

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 Supply Chain Strategy (3)
Keiretsu Network
Part collaboration, part purchasing from few
suppliers, and part vertical integration.
Supplier collaborate as partners, providing
technical expertise and stable quality
production to the manufacturer.
Supplier becomes part of a company coalition.
Manufacturer are often financial supportes of
suppliers through ownership or loans.
Example:
Mitsubishi, Mitsui, Sumitomo, Tokai
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Virtual Companies
Companies that rely on a variety of supplier
relationships to provide services on demand.
Suppliers may provide a variety of services,
that include doing the payroll, hiring
personel, designing products, providing
consulting srvices, and so on.
The result must be lean performance.
Specialized management expertise, low capital
investment, flexibility, speed Efficiency
Example: Vizio, Inc.
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 Considerations that favor making a
part in-house (1)

Cost considerations (less expensive to make the part)

Desire to integrate plant operations
Productive use of excess plant capacity to help absorb fixed overhead (using existing
idle capacity)
Need to exert direct control over production and/or quality
Better quality control
Design secrecy is required to protect proprietary technology
Unreliable suppliers

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 Considerations that favor making a
part in-house (2)

No competent suppliers
Desire to maintain a stable workforce (in periods of declining sales)
Quantity too small to interest a supplier
Control of lead time, transportation, and warehousing costs
Greater assurance of continual supply
Provision of a second source
Political, social or environmental reasons (union pressure)
Emotion (e.g., pride)

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 Factors that may influence firms to
buy a part externally

Lack of expertise Desire to maintain a multiple-source

Suppliers' research and specialized policy
know-how exceeds that of the buyer Indirect managerial control
cost considerations (less expensive to considerations
buy the item) Procurement and inventory
Small-volume requirements considerations
Brand preference
Limited production facilities or
insufficient capacity Item not essential to the firm's strategy

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 Make-or-buy Considerations

Ability

Cost

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 3PL Risks (1)

The 3PL doesnt use the latest

Less experienced staf
technology
Lower levels of efficiency Inability to implement Product ID tags
Higher expenses Inability to perform RF scans
Increased errors and mistakes Limited or non-existent EDI capabilities
Missed deadlines resulting in ASN
(advanced ship notice) failures and
fines
Miscommunication and slower
response times due to a lack of
understanding your specific needs and
requirements in detail

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 3PL Risks (2)

Ongoing Training
Working with a 3PL logistics provider that lacks a fully documented customer-specific training
program, means that an organization is at risk of wide fluctuations in the quality of service
received from the third party logistics provider.
If there is no written documentation or training materials specific to an account, mistakes and
errors will result when there is absenteeism or turnover in the team handling their account and
other members of the third party logistics partners staf have to perform unfamiliar tasks and
procedures.
Safety and Compliance
A safety and compliance program will help ensure compatibility issues dont arise during
warehousing or transport. For example, separating chemical warehouse areas from food (or food
additive) warehouse can reduce/eliminate cross contamination risks.

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 3PL Risks (3)

Inventory Control
Without an inventory control team, inventory issues may not be
investigated immediately or acted upon in a timely manner. Plus, the lack of
audits could lead to additional missed errors and missed trends that are not
noticed and addressed before they escalate.

How You Work Together

A safety and compliance program will help ensure compatibility issues dont
arise during warehousing or transport. For example, separating chemical
warehouse areas from food (or food additive) warehouse can
reduce/eliminate cross contamination risks.

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 Risk and Mitigation Tactics (1)

TABLE 11.3 Supply Chain Risks and Tactics

RISK RISK REDUCTION TACTICS EXAMPLE
Supplier Use multiple suppliers; efective McDonalds planned its supply
failure to contracts with penalties; chain 6 years before its opening in
deliver subcontractors on retainer; pre- Russia. Every plantbakery, meat,
planning chicken, fish, and lettuceis closely
monitored to ensure strong links.
Supplier Careful supplier selection, training, Darden Restaurants has placed
quality failure certification, and monitoring extensive controls, including third-
party audits, on supplier processes
and logistics to ensure constant
monitoring and reduction of risk.

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 Risk and Mitigation Tactics (2)

TABLE 11.3 Supply Chain Risks and Tactics

RISK RISK REDUCTION TACTICS EXAMPLE
Logistics Multiple/redundant transportation Walmart, with its own trucking fleet
delays or modes and numerous distribution centers
damage and warehouses; secure located throughout the U.S., finds
packaging; efective contracts with alternative origins and delivery
penalties routes bypassing problem areas.
Distribution Careful selection, monitoring, and Toyota trains its dealers around the
efective contracts with penalties world, invoking principles of the
Toyota Production System to help
dealers improve customer service,
used-car logistics, and body and
paint operations.
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 Risk and Mitigation Tactics (3)

TABLE 11.3 Supply Chain Risks and Tactics

RISK RISK REDUCTION TACTICS EXAMPLE
Information Redundant databases; secure IT Boeing utilizes a state-of-the-art
loss or systems; training of supply chain international communication system
distortion partners on the proper that transmits engineering,
interpretations and uses of scheduling, and logistics data to
information Boeing facilities and suppliers
worldwide.
Political Political risk insurance; cross- Hard Rock Cafe reduces political
country diversification; franchising risk by franchising and licensing,
and licensing rather than owning, when the
political and cultural barriers seem
significant.
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 Risk and Mitigation Tactics (4)
TABLE 11.3 Supply Chain Risks and Tactics
RISK RISK REDUCTION TACTICS
Economic Hedging to combat exchange rate
risk; purchasing contracts that
address price fluctuations
Natural Insurance; alternate sourcing;
catastrophes cross-country diversification
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EXAMPLE
Honda and Nissan are moving
more manufacturing out of Japan as
the exchange rate for the yen makes
Japanese-made autos more
expensive.
Toyota, after its experience with
fires, earthquakes, and tsunamis,
now attempts to have at least two
suppliers, each in a diferent
geographical region, for each
component.
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 Risk and Mitigation Tactics (5)

TABLE 11.3 Supply Chain Risks and Tactics

RISK RISK REDUCTION TACTICS EXAMPLE
Theft, Insurance; patent protection; Domestic Port Radiation
vandalism, security measures including RFID Initiative: The U.S. government has
and terrorism and GPS; diversification set up radiation portal monitors that
scan nearly all imported containers
for radiation.

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