SCM 01 - V21 - Introduction - Skript

Operations Strategies
Supply Chain Management I

Introduction into the Lection
Prof. Dr. Hendrik Brumme
SCM
Operations Strategies
Supply Chain Management I
Case Learnings
Concept?
Electronics:
DELL
HP Printer
Automotive
SMART
Lean Manufacturing
Consumer
IKEA
Benetton
Wal-Mart
ALDI
Prof. Dr. Hendrik Brumme P.2

1. Introduction
So what is a Supply Chain The Supply and Demand
Network
Distribution
Wholesaler
Vendors
Part- Module -,
System Vendors Retailer
Transportation
OEM
CMs
3rd Party Log.
Customers
To cut cost and in order to increase service levels, the logistics network and all the partners
must be considered and they must collaborate

1. Introduction
So what is a Supply Chain - Challenges
Distribution
Wholesaler
Vendors
Part- Module -, System
Vendors Retailer
Transportation
OEM
CMs
3rd Party Log.
Customers
To cut cost and in order to increase service levels, the logistics network and all the partners must be considered and
they must collaborate
Cost of risk mgmt: - Safety Stock

- Time Buffers in Operation
Operation - Process velocity - time is money (pipeline inventory; operation)

- Process efficiency (cost of non quality and non efficiency)
- # of nodes in the SC very often companies dont understand what
happens in the SC regarding detours and double work etc.
- behavior of partners

1. Introduction
So what is a Supply Chain Roles of Players
(General description/ lot of mixed forms)
Vendor,
Supplier Sells components or sup-assemblies (local, regional, global)
Manufacturer
Has its own product brand and sells to end customers or partners for further value add.
Has direct contract with product manufacturer. Key Role: Owns Small Medium Business (SMB) :
Distributor Acquisition of small customer, order management, credit collection, supply chain mgmt / high
Wholesaler availability through stocking.
Reseller gets products from a Distributor and sells into commercial customers. Has no store.
Reseller Offers some services and integration.
VAR Value Added Reseller (VAR) offers complete solutions to business partners (enterprise und SMB).
Retailer get their products from Distributors or Manufacturers. They sell to end-customers within
Retailer the geography, have a store. There are lots of different forms (i.e. Discounter, Electronic Store,
Computer Store, e-tailer or mail-order)
CM = Contract Manufacturer. A company who buys whole business functions (manufacturing,

CM
warehousing etc) including assets and people. They sell back the service like mfg and whs.
Original Equipment Manufacturer: Has his own brand and uses vendors product as part of his
OEM
solutions. Delivers HW and SW to end customers

Structure of the Lecture
1. Introduction into the Lecture
Impacts onto a Supply Chain
2. (External) Market Dynamics 3. (Internal) System Dynamics
Supply Chain Concepts

5. Push/ Pull 6. Postponement
4. Descripting a SC Balancing Customer Late Differentiation
and Shareholder Value
7. Velocity of Processes 8. Transparency 9. Modularizat. Standardization

Quick Response Better Planning Quality Maximizing Customer Choice
and reduced Safety Buffers while minimizing Cost
10. Matching Demand & Supply 11. Structuring a Supply Chain 12. DfX - Product Design
Linking Sales and
Operations

Agenda
Plan
SC
1. Introduction Supply Chain Management M
Make
1.1 What is a SC / Examples of Success / Challenges Cola-
borat
e
1.2 What is (intra) logistics Excurse Lean Mfg Source
1.3 What is Supply Chain Management (SCM)
1.4 Why is SCM important
1.5 Main Goals of SCM:
1.6 Areas of SCM
1.7 Approach toward a SC oriented Company
1.8 Case: World Co.

Agenda
Plan
SC
Make
borat
e
1.6 Areas of SCM
1.8 Case: World Co.

1.2 What is (intra-) logistics
how does this impact the major goals of SCM
Information Flow
Intra Logistics
Purch- Production Planning Mktg Disposal
asing Production Control Sales
Vendor Customer
Fabri- Re/
Receiving Assembly Shipping marketing
cation
Procurement Production Distribution Reverse Log.
Material Flow
Koether (2004): Taschenbuch Logistik, S. 37

Excurse Lean Logistics
The Fordism the first Evolution Step in manufacturing
The customer can have every colour for his car that he wishes. As long as if it is
black. (Henry Ford, 1922)
Building on the theoretical ideas of Frederick Winslow Taylor to bring mass production
to perfection by synchronization, precision, and specialization.
Three essential principles were applied:

(1) The standardization of the product
(2) The use of special-purpose tools and equipment via the assembly line
(3) The introduction of major changes concerning labour in direct production.
The assembly line: The division of labour, dividing production process into
individual steps which had to be completed the same time (cycle time/ Takt).

Lean Manufacturing and Management a paradigm change in manufacturing
Groth and Kamme define Lean Management as follows:
Lean Management has to be considered as a comprehensive management

approach aiming at abolishing the challenges of the future while embracing the
success factors that need to be considered.
Under functional aspects, the concept of Lean Management can be characterized as
a pragmatic and integrative concept of corporate management with a strong
orientation towards customer satisfaction, the continuity of the relevant value chain,
the continuous improvement of productivity, quality and processes as well as the best
possible utilization of human capital within a company

Quality
Cost
Delivery Time
Goal: Customer Satisfaction
3 Enemies Approaches
to be eliminated 1. Value orientation / min Waste
Muda: Waste (Verschwendung) 2. Define Value Stream
Mura: Fluctuations (int. Schwankungen) 3. Standardization

Muri: Overload (berlastung) 4. Synchronization
(JiT Production, Pull, Flow)
5. Transparency
6. Perfectionism

1.2 What is (intra-) logistics Excurse Lean Logistics
Step 1: Max value / min Waste
1.
2.
3.
4.
5.
6.
7.
8.
9.

1.2 What is (intra-) logistics - Excurse Lean Logistics
Step 3: Standardization
. As a starting point for any continuous improvement cycle

Step 4: Synchronization
JiT Synchronization linking and harmonizing processes (no failures;

Flow; Rhythm, Pull)
1. Flow principle
2. Station time /pace (Fertigen im Kundentakt)
3. Pull principle
4. Leveling out (Nivellierung, heijunka)

Step 5: Transparency
1. Process performance measurement (Andon boards, 5S methodology)
2. System failures measurement
3. Inventory visualization
4. Process idle time visualization

Step 6: Seek for Perfectionism
1. Standardization
2. Kaizen/ PDCA
3. Avoid failures (5W; TQM)
4. Total Production Maintenance (TPM)
5. Continuous qualification of employees

Womack and Jones

1. Identify Value and Map the Value Steam (value stream analysis
2. Create Flow
3. Establish Pull
4. Seek Perfection
Daimler Motor Company:

Consulting Approach to optimize processes: SFTP = Stabilize, Flow , Pace, Pull
(Stabilisieren, Fluss herstellen, Takt optimieren, Pull implementieren)
Consulting Approach to minimize Setup Times: EKUV = Eliminate, Recombine, Switch, Simplify
(Eliminieren, Kombinieren, Umstellen, Vereinfachen)

Consulting Steps
Start:
1. Ausgangssituation/ Ziele / Prmissen
Analysen:
1. Value Flow Analysis -Bestnde erkennen,
2. Momentaufnahmen um ungleiche Belastungen zu erkennen
3. Potentiale
Lsungsanstze

Excurse Lean OVERHEAD I
Waste In Production In Overhead Areas

Overproduction Produce into FGI; Large lot sizes;
Production w/o order
Inventories Raw material, WIP, Low delivery

performance, long lead times
Space Un used space; well equipped space

for low value functions.
Transport Long routing patterns, now flow; WIP
Waiting Large lot sizes, machine stops,

missing parts or people, missing
capacity

Excurse Lean OVERHEAD II
Waste In Production In Overhead Areas

Motion (people or equipment Workplace ergonomy, long ways to go,
moving or walking more than is
required to perform the processing)
Repair, Failures, Failures in materil, machines tuning,

missing competences
Defects
Over Processing Over Engineering, too high quality
goals; redundancies
Unused employees Employees not invovled in Continuous

improvement processes; missing
potential delegation, ineficient knowledge
management

Agenda
Plan
SC
Make
borat
e
1.6 Areas of SCM
1.8 Case: World Co.

1. 3 So what is Supply Chain Management (SCM)
Definition
Orchestrating a concert of resources to manage the process of creating and

fulfilling the market's demand for goods and services
- Gartner Group
Legal Construct
Suppliers Manufacturers Distributors Retailer Customers
returns, repairs Physical Chain components, finished goods
demand, orders Information Chain capacity, delivery schedules
payments Financial Chain credits, payment terms
Processes Organizational Structure Enabling Technologies

1.3 So what is Supply Chain Management (SCM)
Definition
An attempt to coordinate processes involved in producing, shipping and distributing products, generally performed only by large corporations with large suppliers. Private Trading Exchanges can extend
Supply Chain Management to all trading partners regardless of size because they provide a central location to integrate information from all supply chain participants. (See Exchange.)
www.verticalnet.com/technology/glossary.html
SCM refers to the analysis of and effort to improve a company's processes for product and service design, purchasing, invoicing, inventory management, distribution, customer satisfaction and other
elements of the supply chain. SCM usually refers to an effort to redesign supply chain processes in order to achieve streamlining.
www.isourceonline.com/research/glossary/index.asp
The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer. The development and integration of people and
technological resources are critical to successful supply chain integration.
Supply Chain Mgmt is an end-to-end customer oriented view of companies
www.umich.edu/~purch/purch/glossary.html
The coordinated set of techniques to plan and execute all steps in the global network used to acquire raw materials from vendors, transform them into finished goods, and deliver both goods and
services to customers. It includes chain-wide information sharing, planning, resource synchronization and global performance measurements.
business processes begins with the first supplier in the chain and ends with the
www.bridgefieldgroup.com/glos8.htm
The interlocking series of transactions necessary to convert crude oil into marketable products.
www.conocophillips.com/utilities/glossary/glossary-s.asp
end customer. It covers all strategic and operational areas to coordinate all inter-
The optimization of the entire fulfillment process, from consumer purchase back through the retail store, retail DC, wholesaler, manufacturer DC, factory, raw material/component supplier, etc. for
greater responsiveness, speed, and efficiency. It encompasses supply chain planning and supply chain execution.
www.consumergoods.com/2003_CG_SB/CG2003glossary.html
This is the process of optimizing the delivery of goods, services, and information from the supplier to the customer.
and intra organizational material and information flows.
www.crmguru.com/members/primer/glossary.html
The process of optimizing delivery of goods, services and information from supplier to customer. SCM is a set of business processes that encompasses a trading-partner community engaged in a
common goal of satisfying the end customer.
www.dep.state.pa.us/dep/deputate/oit/ec/information/plans/def/ecgl.htm (Bechtel; Jayaram, 1997)
The oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. Supply chain management involves coordinating
and integrating these flows both within and among companies to maximize efficiency and flexibility while minimizing costs.
www.championventures.com/glossary3.htm
The management and control of all materials, funds, and related information in the logistics process from the acquisition of raw materials to the delivery of finished products to the end user.
webmail.mie.utoronto.ca/labs/ilr/imLEG/glossary.htm
Management of all the activities along the supply chain from suppliers to internal logistics within a company and to distribution to customers. This includes ordering, monitoring, billing, and so on
ecommerce.etsu.edu/Glossary.htm
The management and control of all materials and information in the logistics process from acquisition of raw materials to delivery to end user.
is a continuously evolving management philosophy that seeks to unify the
www.csxworldterminals.com/Resources/Glossary.asp
Management of the network of suppliers and sub-suppliers that a company interacts with.
myphliputil.pearsoncmg.com/student/bp_jessup_ist_1/JessupGlossary.html
collective productive competencies into a
Integrating management practices and information technology to optimize information and product flows among the processes and business partners within a supply chain.
highered.mcgraw-hill.com/sites/0072440783/student_view0/chapter4/glossary.html
The systematic, strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain
for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.
highly competitive customer enriching supply system
www.beckmanmarketing8e.nelson.com/glossary.html
The strategies and activities associated with the Supply Chain.
www.state.nj.us/treasury/p_card/glossary.htm
The integration of the supplier, distributor, and customer logistics requirements into one cohesive process to include demand planning, forecasting, materials requisition, order processing, inventory
focused on developing innovative solutions and
allocation, order fulfillment, transportation services, receiving, invoicing, and payment.
ww.domaindlx.com/mell/mini_logfic.htm
The delivery of customer and economic value through integrated management of the flow of physical goods and associated information, from raw materials sourcing to delivery of finished products to
synchronizing the flow of marketplace products, services, and information
consumers. more
www.viradix.com/terminology.html
Describes the active management of the entire supply chain from supplier to customer. SAP supports its customers with solutions that integrate information and decisions from the entire supply chain
into a seamless, automated, and optimized information infrastructure. It provides the framework for integrating strategic decision support, data warehousing, planning and simulation, forecasting and
to create unique, individualized sources of customer value.
execution systems in a closed loop with core enterprise financial, logistics and human resource applications. SAP delivers within its Supply Chain Management initiative the applications SAP Advanced
Planner and Optimizer and SAP Logistics Execution System.
www.geocities.com/sapecommerce/glossary.htm
The process of materiel control including purchasing electronic and mechanical components using a variety of e-commerce data base sources and key vendors with an established track record.
www.naso.com/pages/news_glossary.html (Ross, 1997)
The integration of the supplier, distributor, and customer logistics requirements into one cohesive process to include demand planning, forecasting, materials requisition, order processing, inventory
allocation, order fulfillment, transportation services, receiving, invoicing, and payment. Also see the Council of Logistics Management's definition of Supply Chain Management.
www.mi-clm.org/definitions_S_Z.htm
The supply chain usually refers to the back-end operations that concern the supply of materials or components or products in support of business operations, e.g. shopfront sales and manufacturing.
www.wallstraits.com/school/sage_technologyterms.html
These applications are designed to help streamline production schedules, slash inventories, find bottlenecks and respond quickly to orders. The supply chain refers to the complex network of
relationships that companies maintain with trading partners in the course of manufacturing and delivering products.
www.esps.co.nz/glossary.html

1.3 So what is Supply Chain Management History (s. Corsten/Gabriel,
2003)
Internal optimization of transportation and warehousing. Tuning manufacturing like Kanban, Just-in-
1960
time, lean manufacturing, total quality management.
1970 Inventory
Focus on materials management
1980 Impact of inventory optimization within the integrated supply chain (s. Livier/Webber (1982))
Inventory, planning and speed driving SCM performance (s. Jones/Riley (1985))
Requires the integrated view
Logistics integrating market, production processes and procurement (s. Christopher (1992)
Speed: Time based management
1990
as a competitive advantage to improve precision, service, image and reduce cost ((New product
development, Cycle time)
Flexibility and adaptive ness: Reaction time to customer requirements, speed of innovation,
service and technology adaptation
Product design: Design for supply chain management

Process and product components can reduce inventory by increasing service level (s. Lee /
Billington (1992, 1993)
Business Networking: Value Net / Collaborative planning, forecasting and replenishment (CPFR)
From a supply chain to a business network with complementary partners to control complex
value- and supply chains with max. adaptability (s. Bovet/ Martha (2000))
2000
Customer orientation: Demand Chain Management / Efficient consumer response
All activities are triggering backwards driven by the market and customers (Vollmann/Cordon
(1999))

Agenda
Plan
SC
Make
borat
e
1.6 Areas of SCM
1.8 Case: World Co.

1.4 Why is SCM important - SCM as a LONGERM Competitive
Advantage
In the future not single companies

compete against each other any more
It will be their Supply Chain Network

Prof. Martin Christopher Cranfield
School of Management, UK
Supply Chain Management as a Competitive Advantage?

1.4 Why is SCM important - SCM as a LONGERM Competitive
Advantage
A long-term competitive advantage as it is difficult to copy fast is provided by:

A well developed brand name
A well managed Innovation management
(R&D; data mining, staff development. ..)
Competitive architectures in
IT
Supply Chain Management; the Supply Chain

Agenda
Plan
SC
Make
borat
e
1.6 Areas of SCM
1.8 Case: World Co.

1.5 What are the major goals of SCM
A) Max Shareholder value: :
1. Minimize risks to cut cost

2. Maximize operational efficiencies (Lean Enterprise)) to cut cost
B) Max Customer Value
1. Maximize SC services regarding

Operational excellence (speed, dependability, quality)
Flexibly
Solutions capabilities and service bandwidth
Etc.
2. Minimize cost/ prices

1.5 Main Goals of SCM: Customer Value / Shareholder Value
Customer Value
People dont buy products,

they buy benefits.
Theodore Levitt
perceptions of benefits
Customer Value =
total cost of ownership
Quality x Service
=
Cost x Time
Quality: functionality, performance, technical specifications
Service: availability and support provided
Cost: transaction costs incl. price and life cycle costs
Time: time taken to respond to customer requirements

1.5 Main Goals of SCM: Customer Value / Shareholder Value
Shareholder Value

1.5 Main Goals of SCM
Excurse: Managing Risk
Definition Risk:
Risk is a Negative (or positive) deviation from an expected outcome of a
situation (Kaiwait, 2008)
No company runs without risk

However: Those companies who can reduce their risk w/o adding cost are
more competitive
Thus: Risk must be understood and managed.
It is important to understand the risk relevance, the root causes and its
impact chain.

Excurse: Managing Risk in Global Supply Chains
Risk Areas in SCM
S. Chapter 2
External/
Field Risk
S. Chapter 3
Internal Risk
Supply Risk // Operational Risk //

Geographical Risk

Managing Risk in Global Supply Chains Risk Areas in SCM
Companies must manage the inherent risk of moving raw materials, components and
finished products across diverse cultures, currencies, and regulations.
(Source: Fine, C.(2000): Clockspeed: - Based Strategies for SC Design. Production And Operations Management, 9, pp 213-221)
Major risks areas: Theses risks are further enforced by:

Matching supply and demand, caused by
shorter demand cycle times than supply cycle times
the bullwhip effect of sequential and independent
processes (what will be discussed in the following)
Environmental disruption, caused by

Natural catastrophes
Terrorists Theses risks are often managed
through
Business collapses (e.g. Banks)

Business disruption, caused by
new business models
new product technologies
These strategies are costly and time
Significant increases in raw material prices consuming.
Risk Evaluation Process:
Describe the SC (s. chapter 4) to identify the critical path.

Wha
t ide
ntifi
es th
e critic
al pa
th?

Root Causes Analyses (Ursachenbezogene Risiken) in cases the risk likeliness is high:
SC Goal: Reduce the likeliness through robust planning; flexible design (postponement);
elimination of suppliers in high risk countries.
Risk Impact Analyses (Wirkungsbezogene Risiken) in case the damage can be high:
SC Goal: Reduce the impact through risk sharing; insurances; creating time buffers, inventory,
flexible people and machines (cost!)

Risk Management Strategies: "Real Options approach:

1. Risk Avoidance (Vermeiden) Increase the number of options you have for
Proactive action that eliminates the uncertain situations through process and product
possibility of an event design
2. Risk reduction (Vermindern) Delay the point of decision / Sharing risk within the
by establishing a contingency plan Value Chain
proactive planning for catastrophic events;
Design
3. Risk transfer to other partners (Abwlzen)

Proactive action that shifts risks to a third party -
Insurance, Outsourcing
But: Risk reduction can increase the cost or reduce the profit or it can reduce a cost
saving opportunity (low cost countries). However: In SCM the goal is to reduce the risk
without increasing the cost.

Example Delay of decisions
ModularAstructure
Modularer ufbau
7
1
10
14 possibilities to apply real options.
2 5 8
12
14 Adaptability possible.
14 Mglichkeiten Real
Optionen anzuwenden
In case of market
11 changes, only parts of productions must
Anpassung an Vernderungen
13 be adapted.
mglich
6
3
9
4
Secential structure
Sequentieller Aufbau
3 Mglichkeiten Real
1
3Optionen
possibilities to
anzuwenden apply real options
3
Adaptability not possible. Whole
2
Anpassung an Vernderungen
production process
nicht mehr mglich, must be changed
gesamte
Produktion muss umgestellt werden

Risk Management Approaches
Natural Hedging Applicable for financial risks etc.
Failure Mode and Effects Analysis FMEA

Applicable for technical & product risks
Fault Tree Analysis (FTA) Applicable for
technical Risks
Sensitivity Analysis Applicable for
financial risks
Compliance-Audit Applicable for legal risks
Scenario Analysis Applicable for market &

external risks
Risk-Audits (with checklists) Applicable for all kind of

risks

Risk Management Approaches: Natural Hetching
USA (Currency Area B) USA (Currency Area B)
Steel Steel
Steel
Supplier
Supplier Supplier
(Tier 2) (Tier 1) (Tier 1)
4.8 Bio $
(Currency B)
Customer 4.8 Bio $ Customer
Money $ Money $ (Currency B)
(Currency B)
Money $ (Currency B)
(Currency B)
67,500 t 311.653 Cars 311.653 Cars
Steel
2.5 Mio t 2.5 Mio t Steel
Steel
67,500 t Steel
67,500 t Steel
Car Manufacturer 3.75 Mio Cars Car Manufacturer 3.75 Mio Cars
Rims Rims
15 Mio Rims (OEM) 15 Mio Rims (OEM)
Supplier Supplier
(Tier 1) Money (Currency A) (Tier 1) Money (Currency A)
56.4 Bio
Customer Customer
56.4 Bio
Europe (Currency Area A) (Currency A) Europe (Currency Area A) (Currency A)

Agenda
Plan
SC
Make
borat
e
1.6 Areas of SCM
1.8 Case: World Co.

1.6 Areas of SCM
Control of physical-, information- Process and product design reconciliation
Process
Process Product
Share risks and rewards

design
design design
Integrated Behavior
and financial flows
andand
SC SC
structure
structure
Customer
+
Sharhoder
Value
Cooperation Information
models technology
Information Sharing
1.6 Areas of SCM
In SCs we do have a structural issue which can be improved (but not

eliminated) by optimizing the given parameters. Thus there is a need to
restructure the supply chain to the business needs. This improves the situation
long-term.
Cost reduction and service level improvement can be achieved simultaneously

if SCM methods are applied
Process design Strategic Partnering
Geographical Supply Chain structures i.e. in operations, in sales and
i.e. Push-, Pull-System, VMI, Cross marketing, in product design
Docking etc.
Information systems
Product design i.e. ERP/ APS (Advanced Planning
i.e. designed for Manufacturing, and Scheduling) systems, EDI,
designed for Logistics, postponement

1.6 Areas of SCM
Understanding Risks and Challenges of the Environment
Supply Chain Description
Overall Supply Chain Processes

Design
Inbound OEM - Internal Outbound

Procurement Design Operation Design Distribution
Design
Inbound and Outbound Transportation Design
Collaboration and Integration Design

Discussion Questions
1.What is a Supply Chain / Logistics Network Structure (see chapter 1.2 ): Consider a logistics
network from the automotive industry
What players are there

What is their role
What is their objectives
What are conflicting objectives in this supply chain
2.Describe an example of a supply chain which has evolved over time
3.A vertically integrated company is a company that owns, manages, and operates all its
business functions. A horizontally integrated company is a corporation consisting of a number
of companies, each iof which is acting independently. The cooperation provides branding,
direction, and general strategy. Give examples and compare and contrast the SC strategy.
4.Consider a logistics network for canned peaches, sold by a major food processing company.
What are the sources of uncertainty in this supply chain.
5.Consider a firm re/designing its logistic network. What are the advantages to having a small
number of centrally located warehouses? What are the advantages to having a large number
of decentralize warehouses which are closer to the end-customer?
6.What are the advantages to a firm of high inventory levels? What are the disadvantages?

What is Supply Chain Management
Summary
The central idea of SCM is:

Global, End to end, process oriented
Customer orientation
Speed and velocity (time is key)
Goal:
Adaptive (volume, capabilities, services and products)
Customer and Business (ROI) orientated
Realized through:
Redesign of core competencies
New tools and methodologies for redesign the supply chain
Collaboration and information sharing
Systems and structures considering the customer, vendor, products
New IT concepts

1.8 CASE World Co
How did this company use the Supply Chain to compete in this environment
What are the major ideas of the SC concept
In Manufacturing
Forecasting
Planning
What can be applied in other companies as well

SCM 01 - V21 - Introduction - Skript

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Operations Strategies

Supply Chain Management I

Prof. Dr. Hendrik Brumme

Prof. Dr. Hendrik Brumme P.2

Prof. Dr. Hendrik Brumme P.3

Cost of risk mgmt: - Safety Stock

Operation - Process velocity - time is money (pipeline inventory; operation)

Prof. Dr. Hendrik Brumme P.4

CM = Contract Manufacturer. A company who buys whole business functions (manufacturing,

Prof. Dr. Hendrik Brumme P.5

1. Introduction into the Lecture

Impacts onto a Supply Chain

2. (External) Market Dynamics 3. (Internal) System Dynamics

Supply Chain Concepts

7. Velocity of Processes 8. Transparency 9. Modularizat. Standardization

Prof. Dr. Hendrik Brumme P.6

1. Introduction Supply Chain Management M

1.2 What is (intra) logistics Excurse Lean Mfg Source

1.3 What is Supply Chain Management (SCM)

1.4 Why is SCM important

1.5 Main Goals of SCM:

1.6 Areas of SCM

1.7 Approach toward a SC oriented Company

1.8 Case: World Co.

Prof. Dr. Hendrik Brumme P.7

1. Introduction Supply Chain Management M

1.2 What is (intra) logistics Excurse Lean Mfg Source

1.3 What is Supply Chain Management (SCM)

1.4 Why is SCM important

1.5 Main Goals of SCM:

1.6 Areas of SCM

1.7 Approach toward a SC oriented Company

1.8 Case: World Co.

Prof. Dr. Hendrik Brumme P.8

Procurement Production Distribution Reverse Log.

Koether (2004): Taschenbuch Logistik, S. 37

Prof. Dr. Hendrik Brumme P.9

The Fordism the first Evolution Step in manufacturing

Three essential principles were applied:

Prof. Dr. Hendrik Brumme P.10

Lean Manufacturing and Management a paradigm change in manufacturing

Groth and Kamme define Lean Management as follows:

Lean Management has to be considered as a comprehensive management

Prof. Dr. Hendrik Brumme P.11

Muda: Waste (Verschwendung) 2. Define Value Stream

Mura: Fluctuations (int. Schwankungen) 3. Standardization

Prof. Dr. Hendrik Brumme P.12

Prof. Dr. Hendrik Brumme P.13

. As a starting point for any continuous improvement cycle

Prof. Dr. Hendrik Brumme P.14

JiT Synchronization linking and harmonizing processes (no failures;

2. Station time /pace (Fertigen im Kundentakt)

4. Leveling out (Nivellierung, heijunka)

Prof. Dr. Hendrik Brumme P.15

1. Process performance measurement (Andon boards, 5S methodology)

2. System failures measurement

4. Process idle time visualization

Prof. Dr. Hendrik Brumme P.16

3. Avoid failures (5W; TQM)

4. Total Production Maintenance (TPM)

5. Continuous qualification of employees

Prof. Dr. Hendrik Brumme P.17

Womack and Jones