Supply Chain Management is not. Learned just Through a Textbook. ◇ The “best
” solution to a Supply Chain problem may not win. – An elegant, mathematically ...
Supply/Demand Chain Introduction, Overview and Strategy These slides address chapters 1 through 3 of the textbook, with some information already found in the earlier “Sustainable Demand Chain Management: an Introduction” de-emphasized While the slide decks are based on the textbook, they have been customized for this class – Additional materials are often included – Professorial commentary that expresses a different viewpoint than in the text will be noted in a different color
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Overview of Course 1. 2. 3. 4. 5.
Chapters 1-3 + additional slide deck: Introduction, Overview and Strategy Chapters 4-6: Network Planning and Distribution Chapters 8-9: Aggregate Planning Chapters 10-11, 13+ additional slide deck: Inventory and Transportation Chapter 17: Supply Chain Coordination
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Who Needs to Know About this Topic? Anyone involved in a manufacturing or service industry where capacities and raw materials cannot be obtained or expanded without a time or cost penalty – Executives and Entrepreneurs must understand the strategic importance of the Supply Chain – Managers, Consultants and Software Designers need to be able to analyze, design, and implement Supply Chain solutions
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Supply Chain Management is not Learned just Through a Textbook The “best” solution to a Supply Chain problem may not win – An elegant, mathematically complex LP presented such that only Ph.D.s understand may not be the best practical solution to the problem at hand. And even if it is, it is not the one that will be awarded the contract!
Supply Chain Practitioners need soft skills – Work effectively with clients and team members, including being responsive to questions and requests – You must package and sell your proposed solution
Supply Chain Practitioners need hard skills – Lots of data, need to understand processes and interactions with IT – Work usually involves creating or adapting large-scale computer models
The class is designed for you to practice both hard and soft skills 1-4
Traditional View: Logistics in the US Economy (2006, 2007) Freight Transportation Inventory Expense Administrative Expense Total Logistics Costs Logistics Related Activity
$809, $856 Billion $446, $487 Billion $50, $54 Billion $1.31, $1.4 Trillion 10%, 10.1% of GNP
– About 21% of total costs for a manufacturing firm – Logistical costs percentages are higher in the EU
But supply chain is more than logistics…. Source: 18th and 19th Annual State of Logistics Report – Logistics Magazine
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Supply Chain Management: Mishaps and Opportunities Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies – A typical box of cereal spends 104 days from factory to sale – A typical car spends 15 days from factory to dealership
Compaq estimates it lost $.5 billion to $1 billion in sales in 1995 because laptops were not available when and where needed When the 1 gig processor was introduced by AMD, the price of its previous version, the 800 megabyte processor, dropped by 30% – What happened to firms who had stockpiled those? 1-6
Chapter 1 Outline What is a Supply Chain? (We covered this earlier) Decision Phases in a Supply Chain Process View of a Supply Chain The Importance of Supply Chain Flows
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A Brief Review of Material to Date Typical stages: (from a demand chain perspective) customers
