Transcript Document
Chapter 8 Integrating the supply chain Content Integration in the supply chain Efficient consumer response Collaborative planning, forecasting and replenishment Managing supply chain relationships A framework for managing the supply chain Integration in the supply chain Key issue 1 How can we integrate internally, externally and electronically? Integration in the supply chain • What is Supply Chain Integration • the degree to which the firm can strategically collaborate with their supply chain partners and collaboratively manage the intra- and inter-organization processes to achieve the effective and efficient flows of • • • • Product and services Information Money Decisions • With the objective of providing the maximum value to the customer at low cost and high speed Integration in the supply chain Measures of integration – Access to planning system – Sharing production plans – Joint EDI access / networks – Knowledge of inventory mix / levels – Packaging customization – Delivery frequencies – Common logistical equipment / containers – Common use of third-party logistics Integration in the supply chain Internal integration: function to function Purchasing Production Distribution Low price High productivity of machine and labor Keep warehousing operation smooth Unreliable delivery and low quality High batch size Post-manufacturing operation being resisted Poor available distribution Additional complexity of customizing products Integration in the supply chain Inter-company collaboration: a manual approach Strategic Collaboration Decision Flow Products & Services Flow Enterprise Information & Knowledge Flow Enterprise A B Financial Flow Information & Knowledge Flow Financial Flow Decision Flow END CUSTOMERS RAW MATERIALS Products & Services Flow Integration in the supply chain Electronic collaboration Transactional The electronic execution of transaction Information sharing The electronic sharing or exchange of information Collaboration planning Strategic, tactical and operational exchange Electronic collaboration Integration in the supply chain Information flow in apparel supply chain Content Integration in the supply chain Efficient consumer response Collaborative planning, forecasting and replenishment Managing supply chain relationships A framework for managing the supply chain Efficient consumer response Key issue 1 How can collaboration be extended across the supply chain to focus on meeting consumer demand? Efficient consumer response Category management Category Establish management infrastructure Product replenishment Integrated suppliers Optimize introductions Optimize assortments Optimize promotions Synchronized production Continuous replenishment Automated store ordering Reliable operations Enabling technologies EDI Crossdocking EFT Item coding and database maintenance ABC Continuous replenishment Efficient consumer response Enabling technologies – Scanning data – Data warehousing – Data mining The data include – Demand / consumption / sales information – Cash flow – Stocks of finished goods / work in progress – Delivery and output status Efficient consumer response Category management Account management Demand management Required Multifunctional selling teams capability Price list restructuring Effective and customized promotions Continuous replenishment Joint inventory management Cross-dock operations Continuous replenishment Effective logistics and product flows Quick response Enabling technologies Effective information sharing Automated order generation Bar-coding and the use of other scanning technology Content Integration in the supply chain Efficient consumer response Collaborative planning, forecasting and replenishment Managing supply chain relationships A framework for managing the supply chain Collaborative planning, forecasting and replenishment Key issue 1 How can collaboration be extended to strategic as to well as operational levels? Collaborative planning, forecasting and replenishment CPFR Model 1. Planning 2. 3. 4. Forecasting 5. 6. 7. 8. replenishment 9. Develop front-end agreement Create joint business plans Create individual sales forecasts Identify exceptions to sales forecasts Resolve / collaborate on exception items Create order forecast Identify exceptions to order forecast Resolve / collaborate on exception items Generate orders Wal-mart’s CPFR Process Seller FRONT END AGREEMENT Collaborative Planning JOINT BUSINESS PLAN CREATE SALES FORECAST Collaborative IDENTIFY EXCEPTIONS Goal : Link buyer and Seller Forecasting Electronically RESOLVE EXCEPTIONS CREATE ORDER FORECAST Collaborative Replenishment IDENTIFY EXCEPTIONS RESOLVE EXCEPTIONS Buyer GENERATE ORDER Wal-Mart’s CPFR Program CPFR has “blurred the lines between supplier and customer” Suppliers buy into their program because they have to to work with Wal-Mart, but more importantly, because Wal-Mart’s Systems provide increased profits for Wal-Mart and their suppliers Wal-Mart “teaches” their suppliers how to minimize shipping, inventory and other costs by showing them their own model. Content Integration in the supply chain Efficient consumer response Collaborative planning, forecasting and replenishment Managing supply chain relationships A framework for managing the supply chain Managing supply chain relationships Key issue 1 How can broader-based relationships be formed between trading partners in the supply chain? Managing supply chain relationships Creating closer relationships Partnership Arm’s length transaction R&D Marketing R&D Marketing Logistics Operations Logistics Operations Information system Information system InformationInformation system system supplier customer Bow tie supplier customer Diamond Managing supply chain relationships Factors in forming supply chain relationships – The order winner – The method making sourcing decisions – The nature of electronic collaboration – The attitude to capacity planning – Call-off requirements – Price negotiations – Managing product quality – Managing research and development – The level of pressure Content Integration in the supply chain Efficient consumer response Collaborative planning, forecasting and replenishment Managing supply chain relationships A framework for managing the supply chain A framework for managing the supply chain Key issue 1 What are the management implications of integrating the supply chain? A framework for managing the supply chain 6 Develop measurement system for supply chain performance 4 5 Pilot new supply chain solutions 1 Develop a supply chain strategy Organize for supply chain performance 2 Gather supply chain information 3 Develop effective partnerships and alliances A framework for managing the supply chain Develop a supply chain strategy – Customer service requirements – Plant and distribution center network design – Inventory management – Outsourcing and third-party logistics relationships – Business processes – Organizational design and training requirements – Performance metrics and goals A framework for managing the supply chain Pilot new supply chain solutions – Successful supply chain improvement including Involvement of key stakeholders, suppliers, customers and employees Selection of scope and environment, focusing on avoiding risk Identification of the key questions that the pilot must answer A framework for managing the supply chain Develop measurement systems for supply chain performance – On time in full, outbound – On time in full, inbound – Internal defect rates – New product introduction rate – Cost reduction – Stock turns – Order to delivery lead time – Fiscal flexibility