![Example: Dell
Customers order
computers on
Dell’s website
Dell
Assembly
Plant
Monitors by SONY (Mexico)
Keyboards by Acer (Taiwan)
CPU by Intel (USA)
Other components
Dell is significantly revamping its entire supply
chain strategy and, in large measure, abandoning
its make-to-order model [April, 2008]](https://image.slidesharecdn.com/overviewofsupplychain-250130102851-1446fc8d/85/overview-of-supply-chain-process-and-systematise-8-320.jpg)
overview of supply chain process and systematise
- 2. Announcements • Workshop on applying for scholarships – Jan 19, 10:00am-1:00pm, KOBL 360 – Jan 28, 12:00pm-2:00pm, KOBL 360 • Signup sheet outside Trep Café – Jan 13, 8:00am-1:00pm – Jan 14, 8:00am-1:00pm
- 3. What is Supply Chain Management?
- 4. What is a Supply Chain? • A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request – Suppliers, manufacturers, transporters, warehouses, retailers, and customers • A supply chain includes all functions involved in receiving and filling a customer request – New product development, marketing, operations, distribution, finance, and customer service • A supply chain is the entire process of moving a product or service from suppliers to customers
- 5. Stages of a Detergent Supply Chain Customer Wal-Mart Store Wal-Mart or Third Party DC P&G or Other Manufacturer Pactiv Corporation Paper Manufacturer Timber Company Plastic Producer Chemical Manufacturer
- 6. Example: Wal-Mart Customers Request: Buying detergent, clothes, TV, …... Wal-Mart Stores Wal-Mart or third-party distribution centers Procter & Gamble Plastic Producer Fabric Producer Da-Fa Clothing, Inc. (China) SONY Factory (Malaysia) Electronics Components Producer Chemical Producer Zipper Producer Thread Producer Plastic Producer
- 7. Example: HP Subassembly Suppliers FAT USA DCs Europe DCs Asian DCs Suppliers FAT = Final assembly & test IC Mfg = Integrated circuit manufacturing PC Board = Printed circuit board Suppliers Suppliers PC Board IC Mfg Retailer Customer Retailer Customer Retailer Customer
- 8. Example: Dell Customers order computers on Dell’s website Dell Assembly Plant Monitors by SONY (Mexico) Keyboards by Acer (Taiwan) CPU by Intel (USA) Other components Dell is significantly revamping its entire supply chain strategy and, in large measure, abandoning its make-to-order model [April, 2008]
- 9. Supply Chain Stages • A typical supply chain involves a variety of stages Manufacturer Distributor Retailer Customer Supplier Most supply chains are actually supply networks
- 10. Supply Chain Flows Manufacturer Distributor Retailer Customer Supplier Value-Added Services Material/Product Flow Funds/Demand Flow Information Flow Returns/Recylcing
- 11. What is a Supply Chain? • A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request – Suppliers, manufacturers, transporters, warehouses, retailers, and customers • A supply chain includes all functions involved in receiving and filling a customer request – New product development, marketing, operations, distribution, finance, and customer service • A supply chain is the entire process of moving a product or service from suppliers to customers
- 12. Supply Chain Cycle Marketing Product design Suppliers Manufacturing Logistics Customer Reverse logistics
- 13. The Objective of a Supply Chain • Supply chain value is the difference between what the final product is worth to the customer and the costs the supply chain incurs in filling the customer’s request • Supply chain profitability (or supply chain surplus) is the difference between the revenue generated from the customer and the overall cost across the supply chain Maximize overall value created
- 14. The Objective of a Supply Chain • Sources of supply chain revenue: Customer – Best Buy receives $60 from a customer for a wireless router • Sources of supply chain cost: Flows of information, products, and funds between any pair of stages in the supply chain – Difference between $60 and the sum of all costs is the supply chain profit or supply chain surplus Supply chain profitability is the total profit to be shared across all supply chain stages and intermediaries Supply chain success should be measured by total supply chain profitability, not profits at an individual stage
- 15. The Importance of Supply Chain Decisions • Supply chain design, planning, and operation play a significant role in the success or failure of a firm – Wal-Mart – Dell – Seven-Eleven Japan – Amazon – Toyota – W.W. Grainger and McMaster-Carr – Webvan – Snapple
- 16. Overview • Part I – Understanding the supply chain • Chapters: 1, 2, 3 • Part II – Designing the supply chain network • Chapters: 4, 5, 6 • Part III – Planning demand and supply in a supply chain • Chapters: 7, 8, 9
- 17. Overview • Part IV – Planning and managing inventories in a supply chain • Chapters: 10, 11, 12 • Part V – Designing and planning transportation networks • Chapter: 13 • Part VI – Sourcing and pricing decisions in a supply chain • Chapters: 14, 15, 16, 17
Editor's Notes
- #5: Supply chain involves everybody, from the customer all the way to the last supplier The P&G manufacturing plant receives raw material from a variety of suppliers, who may themselves have been supplied by lower-tier suppliers
- #8: Dell’s direct sales supply chain
- #9: The term supply chain may imply that only one player is involved at each stage. A manufacturer may receive material from several suppliers and the supply to several distributors, who may supply several retailers. Thus, most supply chains are actually networks
- #12: What is a logical point to start? Prior to anything being produced it is of the company’s best interest to predict the level of demand (Marketing). By conducting research and forecast demand. Once markets have been identified and demand has been established Specifications are decided (Product design) Raw materials (Suppliers) Supplied for production (Manufacturing) Transport (Logistics) Distribution centers, warehouses, retailers, customers (Customers) Returns and recycling (Reverse logistics) Data and feedback on products
- #13: For most commercial supply chains, value will be strongly correlated with supply chain profitability
- #15: W.W. Grainger and McMaster-Carr - Maintenance Repair and Operations (MRO) products Webvan - Online grocery store Snapple - Bottled drinks