Transcript No Slide Title

VILLANOVA MBA PROGRAM
(VMBA)
Virtual Supply Chain Management
Dr. Mohammad K. Najdawi
College of Commerce & Finance
Villanova University
Villanova, PA 19085
Tel: (610) 519-5030
Email: [email protected]
What is a Supply Chain?
VMBA
The sequence of suppliers that contribute
to the creation and delivery of a good or
a service to end customers.
Supply Chain Activities
VMBA
The SC activities are planned, executed, and
monitored under the guidelines set by the
company’s chosen customer service levels and in
line with the company’s other operating goals.
Supply Chain Activities (2)
VMBA
The supply chain of a company consists of
different departments, ranging from
procurement of materials to customer service.
The supply chain includes activities associated
with inventory (materials) acquisition,
storing, use in production, transit, and
delivery to customers.
What is Logistics?
VMBA
The management of the storage and
flow of goods, services, and information
throughout the organization.
Elements of Logistics
VMBA
• Materials management:
– sourcing and receiving of raw materials or unfinished
products for subsequent use
• Material flow system:
– the ability to locate and schedule material through to end
production and disposition
• Physical distribution:
– the delivery of finished goods to customers
Logistics Goal &
Objectives
The right
products
Flexibility
The right
quantity
Delivery
reliability
The right
moment
VEMBA
At minimal
cost
Delivery time/
lead time
Inventory
level
Logistics Steps
VMBA
• Logistics steps:
– accepting a customer order
» receive and enter
» credit clearance / authorize
» delivery commitment
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supplier ordering
forecasting demand
scheduling manufacturing
inventory management
delivery to customer.
What is Supply Chain Management?
VMBA
Organizing the cost effective flow and storage
of materials, in-process inventory, finished goods,
and related information from point of origin to point
of consumption to satisfy customer requirements.
Supply Chain Evolution
VMBA
Quality products
Lowest possible cost
Order fulfillment
Integration of supply chains
Customer service
Preferred partners
Communication
Supply chain communities
Common goals, objectives
Supply Chain Management Goal
VMBA
To evolve a company’s supply chain into an
optimally efficient, customer-satisfying process,
where the effectiveness of the whole supply chain is
more important than the effectiveness of each
individual department.
Supply Chain Management focus
VMBA
• Supply Chain Management focuses on
business processes:
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–
–
–
product change
planning
order management
stock management
• instead of functions:
– sales
– purchasing
– production
Supply Chain Management Functions
VMBA
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Forecasting demand
Selecting suppliers
Ordering material
Managing inventory
Scheduling production
Shipping and delivery
Organizing information exchange
Supply Chain Analysis
VMBA
Understand the
customer
Understand the
product
Understand the
information flow
Understand the
process
SC Analysis
Understand the Customer (1)
VMBA
• Know and understand the customers:
– Your existing customers, i.e...
• demographics
• existing and potential number
• income levels?
– Who are your potential customers?
– How might these customers be grouped?
– For which percentage of sales is each group
responsible?
Analysis
Understand the Customer (2)
VMBA
• What is the effect of various methods of
communications (i.e., telephone, fax, e-mail,
internet telephony systems) in your relation
with your customers?
• What do your customers want from you?
• How well do your competitors meet customers
needs?
Analysis
Understand the Products
• Understand the products:
– How many?
– Where are they?
– Which percentage of sales?
– What is the product life cycle?
– What is the product mix?
VMBA
Analysis
Understand the Process
• Understand the production process:
– process flow
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linear flow
job shop - batch flow
assembly line
continuous flow
project flow
– order fulfillment strategy
• make-to-order
• make-to-stock.
VMBA
Analysis
Understand the Information Flow
VMBA
• Understand the information flow
– What information is required for effective
decision-making at each stage in the supply
chain?
– What data has to flow between each part of the
supply chain?
Performance Indicators (1)
• A total view must be taken in assessing
performance.
VMBA
• Performance measures need to be focused on
what factors add to total performance, total
value or total cost.
• The principle measure of performance is
customer service. Optimum service levels are
necessary from each supplier to each customer
throughout the supply chain.
Performance Indicators (2)
VMBA
Customer Service + Quality
Efficiency
Suppliers
Inputs
Effectiveness
Adding
value
Productivity
Profitability
Outputs
Customers
Customer
Service
Results
Performance Indicators (3)
VMBA
• Effectiveness:
– accomplishment of the right things, on time,
within the requirements specified.
• Efficiency:
– resources expected to be consumed divided by
resources actually consumed.
Performance Indicators (4)
VMBA
• Productivity:
– measures of output divided by measures of
input for a given period of time.
• Profitability:
– relationship between revenues and costs.
Supply Chain Management
Drivers of Change (1)
VMBA
• Drivers of change:
– outsourcing trend
– actual customer demand: speed, flexibility and
cheap products
– new software: ERP, sophisticated application
software
Supply Chain Management
Drivers of Change (2)
VMBA
New technologies
– Electronic Data Interchange (EDI)
– internet, intranet, extranet
– wireless communications
– teleconferencing and telecommuting
– bar coding.
Supply Chain Management
Drivers of Change (3)
VMBA
• Shorter Product Life-Cycles
• Product Proliferation and Mass
Customization
• Reduced Product Costs
• Competition
• Increased Customer Needs
• Need to survive in the Age of the Virtual
Enterprise
Virtual Supply Chain Management
VSCM
VMBA
• The Web is The Medium Through Which the
Essential Processes of Managing and
Synchronizing SCs is Carried Out
• VSCM Critical to E-Business Implementations
• VSCM Will Change the Nature of Business
Virtual Supply Chain Management
VSCM
VMBA
VSCM Will Change Nature of Business
XYZ Company misses on VSCM will find itself
celebrating the squeezing of supplier margins at
auction or the reduction in inbound inventory by
sharing forecasts. Competitor might shut XYZ out
of the channel completely.
Virtual Supply Chain Management
&
Customer Demands
VMBA
• Cost is not Sole Arbiter of Value
• Customers Demand Personalization of Products, Services,
and Delivery
• Customers Demand Innovation of Products, Services, and
Delivery
• Customers Demand More Flexibility
• Grants More Competitive Power (Network of Business
Partners)
• Requires Tight Synchronization of SC Activities With the
Demands of Marketplace
• Needs to manage Complexity & Immediacy of
Synchronization
VIRTUAL SUPPLY
CHAIN MANAGEMENT
VMBA
• e Design
• Product Innovation on the Web
• e Mediaries and Exchanges
• Using Online Markets to Revolutionize Buying and
Selling
• e Web-Based Collaboration Planning
• The Virtualization of The Supply Chain
• e Fulfillment
• Matching the Performance of Physical Activities to the
Virtual World
Virtual Supply Chain Management
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Provides Mass Customization
VMBA
Allows Massive Scalability
Grants Faster Fulfillment
Provides More Flexible Fulfillment
Enhances the Ability to Develop New Channels
Grants More Competitive Power (Network of
Business Partners)
• Requires Tight Synchronization of SC Activities
With the Demands of Marketplace
• The Need arises to manage Complexity &
Immediacy of Synchronization
Virtual Supply Chain Management
• Creates New Value Derived From:
VMBA
– Synchronized Supply Chain
– Enhanced SC Performance
– Reach out Bigger Markets
– Mass Customization
– New Products and Services
• Changes SC Management, Planning, Control
• Information, Decisions, Processes on the Web
• New Paradigms of Inter-Company Boundaries
• New Roles For Upstart Specialist Providers of Virtual and
Physical Activities
• New Virtual Competitive Capabilities
Supply Chain Management
&
ERP Systems
VMBA
• ERP is an Internal System that Automates
Internal Processing Transactions
• SCM is an Information Decision Making
System
• Implementation of an ERP System is
Controlled by the Enterprise
• Implementation of a SCM System Requires
the Cooperation of many different Entities
with Different Information Systems
ERP VENDORS
VMBA
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SAP
ORACLE
JD EDWARDS
PROPLESOFT
Baan
SCM VENDORS
VMBA
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Agile: Agile Anywhere, Agile Buyer
Cognos: Cognos EBI
I2 Technologies: TradeMatrix
Industri-Matematic International: Vivaldi
Manugistics: NetWorks, WebWorks
Verano: Supply Chain Portal
VMBA
THANK YOU
[email protected]