Supply Chain

Management...

Introduction and Cources Outline

Ratih Ardia Sari, ST., MT

COURSE OUTLINES
OBJECTIVES : To give general
under standing on basic SCM concepts, methods, and
tools.
Teaching Methodology : lecture, case study, home work.

Referensi
Chopra, S., and Meindl, P. (2001). Supply chain management: Strategy,
planning, and operations. New Jersey - Prentice-Hall.

Pujawan, I N. (2005). Supply chain management. Guna Widya.

Simchi-Levi, D., Kaminski, P., and Simchi-Levi, E. (2000). Designing and

managing the supply chain: Concept, strategies, and case studies. Irwin
McGraw-Hill.
Handfield, R., and Nichols, Jr., E. L. (2002). Supply chain redesign: Transforming
supply chains into integrated value systems. New Jersey: Financial Times
Prentice Hall.

Lecture 1
INTRODUCTION TO SUPPLY CHAIN
MANAGEMENT

Top Performers in SCM

SEVERAL CRITICAL QUESTIONS

Where do you source your materials?
Where do you process or convert them?
What channels of distribution do you use?
How do you build a strong relationship with your suppliers and
customers?
How do you get direct information from your end-consumers?
What logistics structure should you impose?
How do you coordinate your information flows and systems
globally?
And how do you set up incentive systems for all of your partners in
the supply chain to optimize overall performance?

THOSE QUESTIONS SPAN DIFFERENT

DECISION HIERARCHY
Strategic Level
Network design (for example : number, location, capacity of plants
and warehouses)
Developing partnerships with supplier, 3PL, and distributors.
Tactical Level
Setting policies for sourcing, production, delivery, after sales
services, and inventory.
Operational Level
Executing day to day operations on the above activities.

Evolution of Challenges Facing

Manufacturing Companies
1970 Manufacturing, Mass
production
1980 Quality SQC, TQM
1990 SCM dan e-SCM

Now, the new frontier

is the opportunity
through coordination,
cooperation and
collaboration.

FORD: any
colour as long
as it is black

SLOAN: a car
for every
purse and
purpose

Competition
More demanding
customers
Globalization

A product flows through a very long process

before consumed by customers

What is Supply Chain?

A series (or network) of companies who work
collectively to make and deliver products and
services to the end customers. This span from the
raw materials extractors (at the upstream end) to
the retailers / shops (at the downstream end)
In a SC there are three flows : materials,
information, and cash / funds

The Supply-Chain
VISA

Material Flow Credit Flow

Supplier
Supplier

Manufacturing

Retailer

Consumer

Wholesaler

Retailer

Schedules Order
Flow

Cash
Flow

The Supply-Chain
Market research data
Scheduling information
Engineering and design data
Order flow and cash flow

Supplier
Inventory

Supplier

Customer

Ideas and design

to satisfy end
customer
Material flow
Credit flow

Customer

Manufacturer
Supplier

Inventory

Inventory

Distributor
Inventory

Customer

UPSTREAM

SUPPLIER

SIMPLE SC STRUCTURE
DOWNSTREAM

MANUFA
CTURER

DISTRIBU
TOR

WHOLES
ALER

Materials / products, component, finished product

Invoice, credit terms flow
Capacity, delivery schedule, orders, point of sale

Return, recycle, repair

Cash
Orders, forecasting, RFQ

RETAILER

Physical flow
Payments flow
Information flow

Physical flow
Payments
flow
Information flow

END
CUSTOME
R

IN REALITY WE ARE DEALING

WITH A NETWORK, NOT A CHAIN
(Copra & Meindl, 2001)
P&G

Wal-Mart
DC

Plastic
Producer

Chemical
manufacturer

Wal-MartStore

Customer wants
detergent

Packaging
company

Chemical
manufacturer

Paper
manufacturer

Timber
Industry

What is Supply Chain Management

The logistics network

SUPPLY CHAIN MANAGEMENT DEFINITION

A process orientation, integrated approach to procuring, producing, and
delivering product and services to customers (MIT)
A collaborative-based strategy to link cross enterprise business operations to
achieve a shared vision of market opportunity ( D.J. Bowersox, Michigan State)
The delivery of enhanced customer and economic value through synchronized
management of the flow of physical goods and associated information from
sourcing to consumption ( Lalonde, Ohio State)
The process of strategically managing the procurement, movement and storage
of materials, parts, and finished inventory (and the related information flows)
through the organization and its marketing channels in such a way that current
and future profitability are maximized through the cost-effective fulfillment of
orders (Martin Cristopher, Cranfield University)

SUPPLY CHAIN MANAGEMENT DEFINITION

Supply chain management (SCM)" seeks to integrate into one
synergistic effort all the relevant operations of a corporation,
including marketing, design, customer service, production,
purchasing, logistics, and supplier and inventory management.
(Arthur Anderson)
The systematic, strategic coordination of the traditional business
function within a particular company and across businesses within
the supply chain for the purpose of improving the long term
performance of the individual company and the supply chain as a
whole. (Council of Logistics Management)

Observations from the Definition

Supply chain management takes into consideration every facility that has an
impact on cost and plays a role in making the product conform to customer
requirements.
The objective of supply chain management is to be efficient and cost-effective
across the entire system. Thus, the emphasis is not on simply minimizing
transportation cost or reducing inventories but, rather, on taking a systems
approach to supply chain management.
Because supply chain management revolves around efficient integration of
suppliers, manufacturers, warehouses, and stores, it encompasses the firms
activities at many levels, from the strategic level through the tactical to the
operational level.

Conflicting Objectives in the Supply Chain

1. Purchasing
Stable volume requirements
Flexible delivery time
Little variation in mix
Large quantities

2. Manufacturing
Long run production
High quality
High productivity
Low production cost

3. Warehousing
Low inventory
Reduced transportation
costs
Quick replenishment
capability

4. Customers
Short order lead time
High in stock
Enormous variety of
products
Low prices

SUPPLY CHAIN MANAGEMENT FUNCTIONS

Two basic functions :
Physically converting raw materials and components into products
and delivering them to the end customers.

Related to physical costs

Make sure that products/services delivered satisfy customers
aspiration
Related to market mediation costs

ACTIVITIES THROUGHOUT THE SUPPLY

CHAIN
PHYSICAL

MARKET MEDIATION

Sourcing

Marketing Research

Production

Product Design

Distribution

After Sales Services

Warehousing

Demand Management

Inventory Control

SCM Related Functions in a Manufacturing

Company
Division

Example of Activities / Processes

Product Development

market research, product

development, involving supplier in
product development

Purchasing

selecting supplier, evaluating supplier

performance, purchasing raw material,
monitoring supply risk, designing and
managing relationships with supplier

Planning and control

demand planning, demand

forecasting, capacity planning, material
planning, production planning and
inventory control, distribution
management

Operations/Productions production execution, quality control

Distribution

designing distribution network, delivery

schedulling, selecting logistics service
providers, monitoring service levels in
each distribution centre

From Vertical Integration to Networked

Collaboration
Those fuctions can be done in separate locations and by
different organizations
Increase complexity
Expose risks
Increase the needs for coordination and information
sharing

Supply Chain Dell Computer

Ketika customer membeli secara online dari Dell Computer,
supply chain yang terlibat;

Pelanggan
Web site Dell menerima order pelanggan
Pabrik perakitan Dell
Pemasok Dell

Setelah mendapatkan produk yang dipilih, pelanggan

memasukan informasi order dan membayar. Customers dapat
melihat pada Web site untuk mengecek status order
Dells assembly plant memenuhi customers order
Dell Computer menerima komponen dari beberapa suplier dan
memasok produk melalui beberapa transportasi
Dell computer tidak memiliki retailer, wholesaler and distributor

SCM Related Functions in a

Manufacturing Company
Division

Example of Activities / Processes

Product Development

market research, product development, involving

supplier in product development

Purchasing

selecting supplier, evaluating supplier

performance, purchasing raw material, monitoring
supply risk, designing and managing relationships
with supplier

Planning and control

demand planning, demand forecasting, capacity

planning, material planning, production planning
and inventory control, distribution management

Operations/Productions

production execution, quality control

Distribution

designing distribution network, delivery schedulling,

selecting logistics service providers, monitoring
service levels in each distribution centre

Core Processes Across the Supply Chain

SCM REQUIRES SOLID INTERNAL

INTEGRATION
Purchasin
g

Material
Ctrl

Producti
on

Sales

Materials
Mgm

Mfg.
Mgmt

Distribution

Suppliers

Internal
SC

Customers

Distribution

Case Li & Fung

Front end (Li Fung)
Perancangan produk
Engineering
Perencanaan produksi

Back end (Li & Fung)

Pengendalian kualitas
Pengiriman
Banking

Kegiatan tengah
(Suppliers/Subcontractors)
Pengadaan bahan baku dan
Komponen
Proses produksi

Tantangan dalam Mengelola Supply

Chain
Kompleksitas Struktur Supply Chain
Melibatkan banyak pihak dengan kepentingan yang berbedabeda (bertentangan?)
Perbedaan bahasa, zona waktu dan budaya antar perusahaan
Ketidakpastian
Ketidakpastian permintaan
Ketidakpastian pasokan: lead time pengiriman, harga dan
kualitas bahan baku, dll
Ketidakpastian internal: kerusakan mesin, kinerjamesin yang tidak
sempurna, ketidakpastian kualitas produksi dll

Ketidakpastian Menimbulkan Persediaan

Pengaman..

Persediaan dapat:

Menimbulkan biaya
Menyembunyikan permasalahan

Peran informasi
Informasi penting karena menyediakan fakta yang digunakan oleh
manajer supply chain untuk membuat keputusan memberikan
manajer visibility!

Peran internet
Internet memungkinkan kolaborasi, koordinasi, dan integrasi dalam
praktek di lapangan.
Dengan adanya Internet pihak-pihak pada supply chain bisa
membagi informasi serta melakukan transaksi dengan lebih cepat,
murah dan akurat.
Informasi penjualan di supermarket atau ritel akan mudah bisa dibagi
dengan pihak-pihak yang berada di sebelah hulu supply chain
dengan menggunakan Internet.

Aplikasi internet dalam konteks supply chain

management:
Electronic procurement (e-procurement)
Electronic fulfilment (e-fulfilment)

E-Procurement
Aplikasi internet untuk mendukung proses pengadaan
Perusahaan otomotif seperti Volkswagen, General Motors, Daimer Chrysler, dll
e-procurement secara ekstensif untuk:

Proses pengadaan bahan baku dan komponen

Item-item yang masuk dalam kelompok MRO (maintenance,
repair, and operations) seperti suku cadang,
peralatan tulis kantor, dan sebagainya.
Dapat digunakan untuk mendukung:

Hubungan jangka pendek: e-Auction

Hubungan jangka panjang (kemitraan)

E-Fulfillment
Lebih pada bagian hilir supply chain
Beberapa kegiatan yang termasuk dalam proses fulfilment
adalah:
Menerima order dari pelanggan Pelanggan bisa memesan produk
melalui telepon, fax, e-mail, atau webbased ordering.
Mengelola transaksi termasuk proses pembayaran.
Manajemen gudang meliputi pengendalian persediaan produk dan
kegiatan administrasi gudang secara umum.
Manajemen transportasi Keputusan mode dan rute transportasi
termasuk di dalamnya.
Komunikasi dengan pelanggan untuk memberikan informasi status
pesanan, dukungan teknis, dan sebagainya

Studi kasus: Dell Computer

Banyak industri membutuhkan kecepatan yang tinggi untuk
berkompetisi, termasuk industri komputer
Menurut Michael Dell, tantangan utama sebuah yang harus
dihadapi pada saat kecepatan menjadi ukuran kritis adalah

Mengubah fokus dari berapa persediaan yang harus disimpan menjadi

seberapa cepat dia berpindah atau mengalir.

Perusahaan sering kali harus mengembangkan mekanisme

untuk memonitor kecepatan mengalirnya barang atau
produk.
Di industri komputer misalnya, setiap chips disertai dengan
kode 4 digit yang menandakan tahun dan minggu keberapa
chips itu dibuat. Misalnya, 99-23 berarti chips tersebut dibuat
pada minggu ke 23 tahun 1999.

Kenapa kecepatan ini penting?

Menurut Dell, apabila kita memiliki persediaan untuk 11 hari
sedangkan pesaing kita memiliki untuk 80 hari maka pada saat
misalnya ada chips baru dari Intel, kita akan bisa memasarkannya
69 hari lebih cepat.
Kecepatan juga penting karena inventory, terutama pada
komputer industry, membawa resiko yang besar harga material
turun sampai 50% per tahun

Bagaimana Dell meningkatkan

kecepatan aliran barang?
Salah satu caranya adalah dengan kerjasama dan
koordinasi secara dekat dengan supplier.
Dengan supplier seperti Sony, yang memproduksi monitor
dengan kualitas dan kehandalan yang bagus, Dell tidak
perlu menimbun banyak persediaan.
Dell tidak perlu melakukan incoming inspection pada
monitor yang dikirim oleh Sony karena defect-nya sudah
bisa ditekan ke bawah 1000 untuk setiap 1 juta produk.

 Dell menjual komputer langsung ke pemakai akhir.

Kita minta Airbone Express atau UPS untuk mengambil
10000 komputer di Texas sehari dan pergi ke Mexico untuk
mengambil monitor sejumlah yang sama dari pabriknya
Sony. Kemudian, ketika kita semua tidur, mereka merakit
komputer dengan monitornya dan kemudian
mengirimnya ke pemesan. Computer assembly
monito

r (Mexico)
SONY

DELL
(Texas)

Customer Order

Assembly point
CUSTOMER

Apa manfaat yang diperoleh dari direct

model ini?
Inefisiensi berkurang banyak
Kecepatan menjadi sanagt penting pada produk yang
memiliki life cycle pendek
Tidak terjadi distorsi informasi karena rentang antara
permintaan dengan supply berkurang secara dramatis.
Berkurangnya rentang ini memungkinkan informasi permintaan
bisa sampai ke bagian hulu secara lebih cepat sehingga
mengurangi variabilitas order, inventory, resiko, dan ongkos.
Dell bisa berkata ke Sony kita akan mengambil monitor dari
anda dengan konsisten dan stabil (predictable).
Koordinasi penting ketika ada beberapa pihak yang terlibat
pada suatu proses bisnis.

Nabisco, Inc.

This type of cooperation with other companies requires advanced information

systems and entails a variety of risks.
What systems are necessary for this approach to be a success?
When should a company undertake this type of complicated partnership?

SCM

Wal-Mart

If the cross-docking strategy works so well for Wal-Mart, shouldnt

all companies use the same strategy? Indeed, many successful
retailers employ other distribution strategies: some keep inventory
at their warehouses while others ship directly to stores.
SCM

Key Issues, Questions, and Trade-offs

Distribution Network Configuration: several plants producing products to serve
a set of geographically dispersed retailers
Inventory Control: maintain an inventory of a particular product
Supply Contracts: impact from volume discount and revenue sharing, pricing
strategies, incentivizing buyers to order more?
Distribution Strategies: e.g., questions related to cross-docking
Supply Chain Integration and Strategic Partnering: information sharing and
operational planning are the keys
Outsourcing and Procurement Strategies: core competencies
Product Design: mass customization
Information Technology and Decision-Support Systems
Customer Value: the measure of a companys contribution to its customer

Then and Now

Just a few years ago, most analysts would have said that
these two objectives, improved service and inventory levels,
could not be achieved at the same time.
Recent developments in information and communications
technologies, together with a better understanding of
supply chain strategies, have led to innovative approaches
that allow the firm to improve both objectives
simultaneously.

Software Aplikasi
MRP

CPFR

MRP II
ERP
CRM

SCAP
E- Fulfillment

E - Procurement
SRM
SCM

RFID
Radio-Frequency Identification (RFID) is.........

An automatic identification method, relying

on storing and remotely retrieving data using
devices called RFID tags or transponders.

Penyebaran Aplikasi RFID

Many retailers require their suppliers to be RFIDenabled.
Wal Mart to its 100 top suppliers by Jan 2005 at
the case and pallet levels
DoD (43.000 suppliers vs 10.000 +at Wal Mart
Di Indonesia GS1 berdiri sejak 1992 (yayasan
Codex Universalis)