Lamb, Hair, McDaniel

2012-2013

CHAPTER 14 Supply Chain Management

Chapter 12

Copyright 2012 by Cengage Learning Inc. All rights reserved

Adam Duckworth/Alamy

Supply Chains
Supply Chain

The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function

2013 by Cengage Learning Inc. All Rights Reserved.

Supply Chains
Supply Chain Management
A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value
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Supply Chain Management

Communicator of customer demand from point of sale to supplier

Physical flow process that engineers the movement of goods

2013 by Cengage Learning Inc. All Rights Reserved.

Benefits of Supply Chain Management

Supply chain oriented companies commonly report:
Lower inventory, transportation, warehousing, and packaging costs

Greater supply chain flexibility

Improved customer service Higher revenues Increased performance and profitability
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Supply Chain Integration

Relationship Integration Measurement Integration Technology and Planning Integration Material and Service Supplier Integration Internal Operations Integration Customer Integration
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Firm-to-Firm Social Interactions Operational Planning and Control

Customer Integration

Key Business Processes

1. 2. 3. 4. 5. 6. 7. 8. Customer relationship management Customer service management Demand management Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management
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Logistical Components of the Supply Chain

Logistics Information System
Sourcing & Procurement

Production Scheduling
Order Processing Inventory Control Warehouse & Materials Handling Transportation
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Supply Chain Team

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Production Scheduling
Traditional Focus Push / Pull Strategy Start of Production Manufacturing Push InventoryBased Mass Production Customer Focus Pull Customer-Order Based Mass Customization

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Just-in-Time Manufacturing
JIT
A process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials at the precise time they are needed on the production line.
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Benefits of JIT
For manufacturers: reduces raw material inventories; immediate shipping of products For suppliers: daily or hourly deliveries rather than weekly For customers: lower costs; shorter lead times; products tailored to customer needs
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Transportation
Airways Water

Pipelines
Motor Carriers Railroads
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Exhibit 14.1
Criteria for Ranking Modes of Transportation

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Trends in Supply Chain Management

Advanced computer technology Outsourcing of logistics functions Electronic distribution Green Supply Chain management

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Advanced Computer Technology

Automatic identification systems Bar coding Radio frequency technology Communications technology

Supply chain software systems

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Outsourcing Logistics Functions

Outsourcing Benefits
Reduce inventories Locate stock at fewer plants and distribution centers Provide same or better levels of service

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Electronic Distribution
a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiberoptic cable or through satellite transmission of electronic signals.

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Green Supply Chain Management

Requires integrating green thinking into all phases of the supply chain Green materials sourcing Environmental impact of packaging, shipment, use Incorporate end-of-life management Recycling Clean disposal

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Global Logistics and Supply Chain Management

Logistical challenges of global markets:
Understanding and coping with the legalities of trade in other countries Uncertainty regarding shipping

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