Supply Chain Management

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Supply Chain Management

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Nhiều cuốn sách coi quản lý chuỗi cung ứng là một phần trong vận hành, logistics hoặc thu mua, nhưng cuốn sách này vận dụng một lối tiếp cận bao quát hơn, cho thấy các chức năng trên đều là những bộ phận liên kết với nhau trong cùng một hệ thống.Tác giả sử dụng rất nhiều ví dụ thường nhật để giúp bạn đọc dễ hình dung từng bước trong bất kỳ chuỗi cung ứng nào, đồng thời chỉ ra rằng gần như mọi công ty đều có thể vận dụng các nguyên tắc trong chuỗi cung ứng.

Supply Chain Management MKRakesh Ph.D scholar Mahatma Gandhi Kashi Vidyapeeth Varanasi mkrakesh@rediffmail.com Through the past decades we have seen an increasing rate of globalization of the economy and thereby also of supply chains Products are no longer produced and consumed within the same geographical area Even the different parts of a product may, and often do, come from all over the world This creates longer and more complex supply chains, and therefore it also changes the requirements within supply chain management This again affects the effectiveness of computer systems employed in the supply chain A longer supply chain will often involve longer order to delivery lead times Flaherty [10] states, in accordance with the discussion in Section, that the consequences of longer lead times will often be less dependable forecasts as these have to be made earlier, reduced production flexibility, i.e greater difficulties to adjust to order changes, higher levels of inventory Therese M Flaherty Global Operations Management McGraw-Hill, New-York, 1996 The evident answer to the problem of longer lead times is to speed up the supply chain But a limit is often reached beyond which further effort to shorten lead times are futile, especially in international supply chains Another approach is to restructure the supply chain This simply means to reconsider the strategic level decisions priorly made A third approach identified by Flaherty [10] is changing coordination: The order, forecasting, procurement, and information sharing procedures among the members of the supply chain We will dwell on the issue of coordination in the next section Globalization also brings foreign competition into markets that traditionally were local Local companies are thereby forced to respond by improving their manufacturing practices and supply chain management Bhatnagar et al [5] states that attempts have focused, among others, on reduction of inventory levels, and increased flexibility through reduced lead times Yet again we see how industry focuses on the issues of inventory management and flexibility to maintain high levels of customer satisfaction Definitions Supply chain management (SCM) is the process of planning, implementing and controlling the operations of the supply chain as efficiently as possible Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently These organizations have their own objectives and these are often conflicting Marketing's objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities Purchasing contracts are often negotiated with very little information beyond historical buying patterns The result of these factors is that there is not a single, integrated plan for the organization -there were as many plans as businesses Clearly, there is a need for a mechanism through which these different functions can be integrated together Supply chain management is a strategy through which such integration can be achieved There seems to be a universal agreement on what a supply chain is Jayashankar et al [25] defines a supply chain to be A network of autonomous or semi-autonomous business entities collectively responsible for procurement, manufacturing, and distribution activities associated with one or more families of related products Lee and Billington [17] have a similar definition: A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system And Ganeshan and Harrison [12] has yet another analogous definition: A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers According to Wikipedia.org Supply Chain Management (SCM): Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose of satisfying customer requirements as efficiently as possible Supply chain management spans all movement and storage of raw materials, work–in–process inventory, and finished goods from point–of–origin to point–of–consumption (http://en.wikipedia.org/wiki/Supply_Chain_Management) The definition one American professional association put forward is that Supply Chain Management encompasses the planning and management of all activities involved in sourcing, procurement, conversion, and logistics management activities Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers In essence, Supply Chain Management integrates supply and demand management within and across companies More recently, the loosely coupled, self-organizing network of businesses that cooperates to provide product and service offerings has been called the Extended Enterprise Logistics is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers' requirements “Efficient Management of the Supply Chain (source, make and deliver) in order to maximize the value for money to the customer” In other words Supply Chain Management means integration and management of Supply Chain organization and activities through coordinated and collaborative strategic alliances, efficient business processes and high levels of information sharing to create a value chain that would provide member organizations a sustainable competitive advantage and in turn provide value for money to the customer Instead of brand versus brand or store versus store, it is now supply chain versus supply chain In this emerging highly competitive and dynamic environment, the ultimate success of the Business entity will depend on management's ability to integrate the company's complicated network of business relationships The graphic will explain the process of Integration in the Supply Chain network The broader view of SCM is depicted in the above figure in a simplified supply chain network structure This would explain the basic difference between Logistics and SCM Supply Chain is inter-company integration of business process and relationships and where as Logistics is intra-company integration A Working Definition of Supply Chain Management: We can define the supply chain as the flow of information and material to and from suppliers and customers The objectives of Supply Chain Management (SCM) are to: Maximize supply chain responsiveness and flexibility to customers, Minimize total supply chain cycle time, costs, inventory, and; Maximize supply chain capacity, utilization, and Return on Assets (ROA) There are four fundamental operating principles at work in SCM : Set up the simplest, most direct, flow of information possible to and from those who produce it to those who use it Set up the simplest, most direct, flow of material possible to and from those who produce it to those who use it Establish the smoothest possible drumbeat or rhythm of production and usage Create the ability to react to problems through short lead-times eliminating the need for inventories Why Supply Chain Management? Experience shows that the gains to be made in cost, lead-time and quality through working in partnership with customers and suppliers are significant In industry after industry one observes that: 50%-70% of total costs are supplier related (material versus direct labor or overhead costs) Supplier lead times are longer than one's own production lead times It goes without saying that the quality of your product depends on the quality of material your supplier provides With customers awarding more and more business based on total price, quality and delivery, the whole process from one's supplier receiving raw material to one's customer using the product has to be the target for breakthrough improvement Experience shows that customers use the products we produce in much more predictable ways than then it first appear We assume that a customer's order pattern is related to his/ her usage pattern Often we not look beyond the order pattern for information about actual usage Worse yet we tend to create wide swings and unpredictability in buying patterns that would otherwise be stable and predictable The consumer products industry learned that it often incurred more costs than benefits through consumer promotions They trained consumers to wait for a sale, then buy and stock product until the next sale Swings in demand were amplified through the supply pipeline adding cost as the bulge worked its way through the system Retail stores clogged backrooms with inventory or ran out of stock Distributors added inventory to cover unexpected demand Manufacturers added finished goods inventory, increased production through over-time, and put pressure on their suppliers to deliver more in shorter lead-times Wal-Mart broke the cycle with Every-Day-Low prices A master in logistics, Wal-Mart understood that it was more profitable to always offer the lowest competitive prices to the consumer in return for more stable, predictable demand The more predictable the demand, the easier it is to synchronize activities to true customer demand throughout the supply chain The result is better on-time delivery, fewer stockouts, and higher customer satisfaction with less inventory, reduced administrative work and lower overall costs Managing multiple flows: Organizations increasingly find that they must rely on effective supply chains, or networks, to successfully compete in the global market and networked economy In Peter Drucker's (1998) management's new paradigms, this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies During the past decades, globalization, outsourcing and information technology have enabled many organizations, such as Dell and Hewlett Packard, to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities (Scott, 1993) The concept involved in a supply chain can be well understood by the following list of figured models A Generic Supply chain model Suppliers Manufacturers Distributors Customers Issues in Supply Chain Management The classic objective of logistics is to be able to have the right products in the right quantities (at the right place) at the right moment at minimal cost Figure (from NEVEM-workgroup [19]) translates this overall objective into four main areas of concern within supply chain management Figure: Hierarchy of Objectives The two middle boxes in the lower row of Fig , delivery reliability, and delivery times, is both aspects of customer service, which is highly dependent on the first box, flexibility, and on the last box, inventory Improving Supply Chain Management The above sections describe issues and challenges of supply chain management It is time to approach solutions A key to improved supply chain management lies in integration and coordination, look to Section for a discussion Section introduces important tools of supply chain managers, modeling and simulation Goal and Principle of SCM SCM goal: Providing enhanced value to customers at the least Total cost Value, Velocity and Visibility SCM Principles: Ultimate customer focus Network of organizations working for common purpose and mutual benefits Process orientation Total systems thinking Cost Dimensions Inventory Transportation Warehousing Information Figure below shows us the relation ship between some of the components of supply chain Delivery and lead-time Inventory Costs Warehouse cost SCM Framework A framework to understand the various issues involved in SCM is provided by the pyramid structure for the SCM paradigm (fig.) the pyramid allows issues to be analysed on four levels: Strategic: On the strategic, level it is important to know how SCM can contribute to the enterprises’ basic “value proposition” to the customers Important questions that are addressed at this level include: What are the basic and distinctive services needs of the customers? What can SCM to meet these needs? Can the SCM capabilities be used to provide unique services to the customers? Etc Structural: After the strategic issues are dealt with, the next level question(s) that should be asked are: Should the organization market directly or should it use distributors or other intermediaries to reach the customers? What should the SCM network look like? What products should be sourced from which manufacturing locations? How many warehouses should the company have and where should be located? What is the mission of each facility (full stocking, fast moving items only, cross-docking etc.)? Functional: This is the level where operational details are decided Functional excellence requires that the optimal operating practices for transportation management, warehouse operations, and materials management (which includes forecasting, inventory management, production scheduling, and purchasing) be designed These strategies should keep in view the trade-offs that may need to be made for the overall efficiency of the system Achieving functional excellence also entails development of a processoriented perspective on replenishment and order fulfillment so that all activities involved in these functions can be well integrated Fig SCM Framework Pyramid Source: Based on work done by William C.Capacino Implementation: Without successful implementation, the development of SCM strategies and plans is meaningless Of particular importance are the organizational and information systems issues Organizational issues centers on the overall structure, individual roles and responsibilities, and measurement systems needed to build an integrated operation Information systems are “enablers” for supply chain management operations and therefore must be carefully designed to support the SCM strategy Supply chain managers must consider their information needs relative to decision support tools, application software’s, data capture, and the system’s overall structure It is important to note that the decisions made within the SCM strategy pyramid are interdependent That is, it must be understood what capabilities and limitations affect the functional and implementation decisions and consider those factors while developing a supply chain management strategy and structure The SCM models used in practice lie in a continuum between two extreme models: on one end of the spectrum lies the vertically integrated supply chain model in which the organization has direct control over each and every component of the supply chain, while on the other end of the spectrum lies the horizontally diversified supply chain model (ideally) in which the number of participant is as large as the number of distinct parts of the supply chain In a vertically integrated supply chain system, the organization can control every component of the chain and can make various changes to the system to optimize the chain very easily But in a horizontally diversified supply chain the tendency will be to optimize only the functions that the organization is involved in, thus conscious efforts must be made by the various participants in the supply chain for the integration of their respective components in the supply chain If an organization can be identified as the major/dominant partner in the supply chain, then this organization has to take an initiative in seeking the co-operation of the other participants in the supply chain The type and structure of the supply chain that is established depends on many factors, some of the major factors are: Geographical: If the supply chain is stretched across the globe then it may not be possible to incorporate some of the principles of lean production like JIT delivery, flexible manufacturing, and co-ordination among suppliers and customers It can lead to uncertain transportation schedules, unpredictable lead-time and may need larger inventory carriage Cultural: The difference in the “culture” of the participants in the chain (the difference can be due to geographical factors or corporate practices) can lead to friction and distrust This may hamper the development of close ties Government Legislation: The laws of the country may prohibit the sharing of information about some facet of the supply chain and thus, may lead to a restrictive participation by one or more participant in the supply chain Decisions on Three Levels Supply chain management decisions are often said to belong to one of three levels; the strategic, the tactical, or the operational level Since there is no well defined and unified use of these terms, this Section describes the how they are used in this thesis Figure: shows the three level of decisions as a pyramid shaped hierarchy The decisions on a higher level in the pyramid will set the conditions under which lower level decisions are made Figure: Hierarchy of Supply Chain Decisions On the strategic level long term decisions are made According to Ganeshan and Harrison [12], these are related to location, production, inventory, and transportation Location decisions are concerned with the size, number, and geographic location of the supply chain entities, such as plants, inventories, or distribution centers The production decisions are meant to determine which products to produce, where to produce them, which suppliers to use, from which plants to supply distribution centers, and so on Inventory decisions are concerned with the way of managing inventories throughout the supply chain Transport decisions are made on the modes of transport to use Decisions made on the strategic level are of course interrelated For example decisions on mode of transport are influenced by decisions on geographical placement of plants and warehouses, and inventory policies are influenced by choice of suppliers and production locations Modeling and simulation is frequently used for analyzing these interrelations, and the impact of making strategic level changes in the supply chain On the tactical level medium term decisions are made, such as weekly demand forecasts, distribution and transportation planning, production planning, and materials requirement planning The operational level of supply chain management is concerned with the very short term decisions made from day to day The border between the tactical and operational levels is vague Often no distinction is made Major Network Design Decisions Number & locations of facilities (plants, warehouses & stores) Capacities (size) of facilities Product mix at plants Allocation of plants to warehouses Allocation of warehouses to stores

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