Professional Documents
Culture Documents
MMBA507 T1/11
Definition Wh t is What i the th problem? bl ? Demonstration of a simple case Example of the power of IT in SCM: WALMART and what about E-tailing?
Hans Lehmann 2
MMBA507 T1/11
Supply Chain
Hans Lehmann
MMBA507 T1/11
Purchasing
Production
Sales
Suppliers
Hans Lehmann
Firm
Customers
4
MMBA507 T1/11
Two types of Costs: Obvious Carrying Costs Not Not-so-obvious so obvious Carrying Costs
Hans Lehmann 5
MMBA507 T1/11
Why?
Hans Lehmann 6
MMBA507 T1/11
Demand distortions
Empirical fact: demand variations amplify upstream p in the supply pp y chain. Manf. Wholesaler Distributor
Information flow (through orders)
Retailer
Product flow
Demand information is distorted: hence, every entity in the supply chain stockpiles too much product.
enter:
Hans Lehmann 7
MMBA507 T1/11
Demand at the Factory Warehouse Demand at the Distribution Centre level Demand at the Retail level
Hans Lehmann 8
MMBA507 T1/11
The Need for Supply Chain Management stems from the Realisation that
Lets look at an actual p of an example extraordinarily effective and successful S Supply l Chain Ch i Strategy:
Hans Lehmann 10
MMBA507 T1/11
Wal-Mart W l M t Stores, St I Inc. i is th the worlds ld l largest t retailer, t il with ith (USbn)$419 in sales in 2011. The company employs 2.25 million associates worldwide through nearly 9000 stores in the United States and in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan Mexico, Japan, Mexico Nicaragua, Nicaragua Puerto Rico, Rico South Korea, Korea the United Kingdom and Continental and Eastern Europe. More than 200 million customers per week visit Wal-Mart stores worldwide.
Hans Lehmann 11
MMBA507 T1/11
Hans Lehmann
12
MMBA507 T1/11
MMBA507 T1/11
Stock Turn
11.5 p.a.
Store Turnover
46.7$m
Hans Lehmann
14
MMBA507 T1/11
Right Merchandise Negative Working Capital Shop Operations Good Discount Retailing;
...what else??
Hans Lehmann 15 MMBA507 T1/11
Network of Distribution Centers & g Cross Docking Dedicated Truck Fleet Decentralised, Pull-type merchandising management p y Motivation Employee
Enabled Processes
Hans Lehmann 16
MMBA507 T1/11
Hans Lehmann
17 17
Supplier
Consumer household
38 days
26 days
Hans Lehmann
18 18
Supplier
Before
38 days
26 days
After 27 days
12 days
22 days
Savings 11 days
28 days
4 days
MMBA507 T1/11
10
MMBA507 T1/11
MMBA507 T1/11
WalMart saved
Hans Lehmann
$2,766bn
22 22
11
MMBA507 T1/11
WalMart saved
Hans Lehmann
$2,691bn
23 23
MMBA507 T1/11
Role of Information Technology? Obvious glue for the enabled processes but will develop into much more : Enabling closer co-operation Transform collaboration In manufacturing and logistics
Hans Lehmann
24
12
MMBA507 T1/11
Hans Lehmann
25
MMBA507 T1/11
Hans Lehmann
26
13
MMBA507 T1/11
So: how has AMAZON been b doing since its IPO in 1997?
http://finance.yahoo.com/q?s=AMZN http://www.wikinvest.com/stock/Amazon.com_%28AMZN%29/Data/Market_Capitalization/2012/Q1
27 Hans Lehmann
MMBA507 T1/11
14
MMBA507 T1/11
MMBA507 T1/11
Hans Lehmann
30
15
MMBA507 T1/11
still unchanged!
Hans Lehmann
http://www.buzzfeed.com/mjs538/what-it-looks-like-inside-amazoncom
31
The stuff to remember: B2B-EB technology is the glue in the Supply Chain; and Its Supply Chains that compete not single companies; also: Web-enabled organisation and processes, connected with IT, are fast becoming standard operating practice for businesses; but Learning curve is still steep
32
Hans Lehmann
16