Global Supply Chain Management

What is It and Why Should We Care?

Who Am I?
Yann Ferrand

Assistant Professor M.S. Quantitative Analysis, MBA & PhD, University of Cincinnati B.S. Toulouse Business School
Research:

Operations Management: simulation models, optimization Healthcare operations: capacity utilization and patient flow

Who Am I?
Toulouse, Cincinnati, Clemson

Other
Love Traveling Enjoy the Outdoors

and Cooking with Friends

You want me to do what?!

Imagine your boss tells you:

We need to move the following half-way around the world: 1.8 million tons of cargo 126,000 vehicles (plus fuel and spare parts) 700,000 people Enough food to feed everyone for several months
Includes 500,000+ bottles of water per day

Materials to build whole cities for several hundred thousand people Oh yeah, and we have to do it in < 6 months
And we have to keep everything running for up to a year or more
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Oh, one more thing, people may be shooting at

An army marches on its stomach - Napoleon

Supply Chain Management

What is it?

Supply Chain Management

From your textbook:

Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize systemwide costs while satisfying service level requirements.

In a nutshell.
Supply Chain Management is:

What is a supply chain (supply network/web)?

P&G or other manufacturer Distribution Center Wal-Mart Store Customer

Plastic Producer

Tenneco Packaging Company

Chemical manufacturer (e.g. Oil Company)

Chemical manufacturer (e.g. Oil Company)

Paper Manufacturer

Timber Industry
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Other Supply Chains

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Microsoft wants to launch

What are the supply chain issues?
How many should we make?
Demand forecasting, market surveys, competitor analysis

Where should we make them?

Facility location studies, labor costs/analysis, outsourcing

When do we launch?
Locate suppliers, manufacturing lead time estimate, quality issues

How do we get them to market?

Logistical analysis Where are we going to sell them? Where do we store them (inventory)?

What do we do with returns? What about accessories, spare parts?

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Seed to Table

Food travels average of 1300 miles from farm to dinner table Grocery stores usually carry < 3 days inventory

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Supply Chain Management

Why is it important?
According to State of Logistics Report published by the Council of Supply Chain Management, U.S. companies currently spend about 9% of GNP on supply related activities (includes cost of movement, storage and control of products across the supply chain)

This is down from ~17% of GNP in 1990 and 10.6% in 1997!

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Room for Improvement

Typical Cereal Box

~ 115 days to get from factory to supermarket

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Who Does it Well?

For next class, research one company that excels at supply chain management and explain how they are doing it.

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