Chapter I........................................................................................................................................................1
Supply Chain Management.................................
...
Chapter I........................................................................................................................................................1
Supply Chain Management..........................................................................................................................1
Aim.................................................................................................................................................................1
Objectives.......................................................................................................................................................1
Learning outcome...........................................................................................................................................1
1.1 Introduction...............................................................................................................................................2
1.2 Supply Chain.............................................................................................................................................2
1.3 Supply Chain Management.......................................................................................................................4
1.4 Objective of Supply Chain Management..................................................................................................5
1.5 Importance of Supply Chain Management...............................................................................................5
1.6 Activities of Supply Chain Management..................................................................................................6
1.7 Decision Phases in a Supply Chain...........................................................................................................7
1.8 Process View of Supply Chain..................................................................................................................8
1.9 Linking Competitive (Business) and Supply Chain Strategies ...............................................................9
1.10 Supply Chain Drivers ...........................................................................................................................10
1.11 Barriers of Supply Chain Management..................................................................................................11
1.12 Scope of Supply Chain Activities..........................................................................................................11
1.13 Marketing Mix Model............................................................................................................................11
Summary......................................................................................................................................................14
References....................................................................................................................................................14
Recommended Reading..............................................................................................................................14
Self Assessment............................................................................................................................................15
Chapter II....................................................................................................................................................17
Designing the Supply Chain Network.......................................................................................................17
Aim...............................................................................................................................................................17
Objectives.....................................................................................................................................................17
Learning outcome.........................................................................................................................................17
2.1 Introduction.............................................................................................................................................18
2.2 Role of Distribution Network ................................................................................................................18
2.3 Factors Influencing Distribution Network Design..................................................................................19
2.4 Design Options for a Distribution Network ...........................................................................................20
2.5 E-business and its Impact .......................................................................................................................25
2.5.1 Advantages of E-business.......................................................................................................27
2.5.2 Disadvantages of E-business..................................................................................................28
2.6 Distribution Networks in Practice ..........................................................................................................28
2.7 Distribution Network Design in the Supply Chain.................................................................................28
2.8 Factors Affecting Network Design Decisions.........................................................................................29
2.9 Supply Chain Model...............................................................................................................................31
Summary......................................................................................................................................................33
References....................................................................................................................................................33
Recommended Reading..............................................................................................................................33
Self Assessment............................................................................................................................................34
Chapter III...................................................................................................................................................36
Designing and Planning Transportation Networks..................................................................................36
Aim...............................................................................................................................................................36
Objectives.....................................................................................................................................................36
Learning outcome.........................................................................................................................................36
3.1 Introduction.............................................................................................................................................37
3.2 Transportation in Supply Chain..............................................................................................................37
3.3 Importance of Transportation .................................................................................................................38
3.4 Role of Transport in Supply Chain.........................................................................................................38
3.4.1 Transportation Modes in Supply Chain.................................................................................39
3.5 Transportation Infrastructure and Policies .............................................................................................41
3.6 Design Options For Transportation Network .........................................................................................41
III/JNU OLE
3.7 Tailored Transportation...........................................................................................................................45
3.8 Trade-off in Transportation Design.........................................................................................................45
3.9 Routing and Scheduling in Transportation.............................................................................................45
3.10 Making Transportation Decisions in Practice.......................................................................................46
Summary......................................................................................................................................................47
References....................................................................................................................................................47
Recommended Reading..............................................................................................................................47
Self Assessment............................................................................................................................................48
Chapter IV...................................................................................................................................................50
Sourcing and Pricing..................................................................................................................................50
Aim...............................................................................................................................................................50
Objectives.....................................................................................................................................................50
Learning outcome.........................................................................................................................................50
4.1 Introduction.............................................................................................................................................51
4.2 Sourcing .................................................................................................................................................51
4.3 In-house and Outsource .........................................................................................................................51
4.4 3PL and 4PL ...........................................................................................................................................53
4.5 Benefits of Effective Sourcing Decisions...............................................................................................53
4.6 Supplier Scoring and Assessment...........................................................................................................54
4.6.1 Scoring Suppliers....................................................................................................................54
4.6.2 Ranking Suppliers...................................................................................................................54
4.7 Supplier Selection...................................................................................................................................55
4.8 Design Collaboration .............................................................................................................................55
4.9 Procurement Process...............................................................................................................................56
4.10 Sourcing Planning and Analysis...........................................................................................................56
4.11 Pricing and Revenue Management for Multiple Customers.................................................................56
4.12 Perishable Products and Seasonal Demand..........................................................................................58
Summary .....................................................................................................................................................60
References....................................................................................................................................................60
Recommended Reading..............................................................................................................................60
Self Assessment............................................................................................................................................61
Chapter V.....................................................................................................................................................63
Information Technology in the Supply Chain..........................................................................................63
Aim...............................................................................................................................................................63
Objectives.....................................................................................................................................................63
Learning outcome.........................................................................................................................................63
5.1 Introduction.............................................................................................................................................64
5.2 Supply Chain IT Framework..................................................................................................................65
5.3 Role of Information in Supply Chain......................................................................................................65
5.4 Customer Relationship Management (CRM).........................................................................................65
5.5 Internal Supply Chain Management ......................................................................................................67
5.6 Supplier Relationship Management........................................................................................................67
5.7 Transaction Management........................................................................................................................68
5.8 Enterprise Resource Planning (ERP)......................................................................................................68
5.9 E-commerce............................................................................................................................................69
5.10 Supply Chain Information Technology in Practice...............................................................................70
Summary .....................................................................................................................................................71
References....................................................................................................................................................71
Recommended Reading..............................................................................................................................71
Self Assessment............................................................................................................................................72
IV/JNU OLE
Chapter VI...................................................................................................................................................74
Coordination in a Supply Chain................................................................................................................74
Aim...............................................................................................................................................................74
Objectives.....................................................................................................................................................74
Learning outcome.........................................................................................................................................74
6.1 Introduction.............................................................................................................................................75
6.2 Lack of Supply Chain Coordination ......................................................................................................75
6.3 Bullwhip Effect.......................................................................................................................................76
6.4 Managerial Levers..................................................................................................................................78
6.5 Building Strategic Partnerships and Trust..............................................................................................78
6.6 Continuous Replenishment Program (CRP) and Vendor Managed Inventory (VMI)............................78
6.7 Collaborative Planning, Forecasting and Replenishment (CPFR)..........................................................80
Summary......................................................................................................................................................82
References....................................................................................................................................................82
Recommended Reading..............................................................................................................................82
Self Assessment............................................................................................................................................83
Chapter VII.................................................................................................................................................85
Dimensions of Logistics..............................................................................................................................85
Aim...............................................................................................................................................................85
Objectives.....................................................................................................................................................85
Learning outcome.........................................................................................................................................85
7.1 Introduction ............................................................................................................................................86
7.2 Macro and Micro Dimension..................................................................................................................86
7.2.1 Macro Dimension...................................................................................................................86
7.2.2 Micro Dimensions...................................................................................................................87
7.3 Logistics Activities..................................................................................................................................89
7.4 Approach to Analysing Logistics Systems..............................................................................................90
7.5 Logistics and Systems Analysis..............................................................................................................93
7.6 Techniques of Logistics System Analysis...............................................................................................94
7.7 Factors Affecting the Cost and Importance of Logistics........................................................................95
Summary......................................................................................................................................................98
References....................................................................................................................................................98
Recommended Reading..............................................................................................................................98
Self Assessment............................................................................................................................................99
Chapter VIII..............................................................................................................................................101
Demand Management and Customer Service........................................................................................101
Aim.............................................................................................................................................................101
Objectives...................................................................................................................................................101
Learning outcome.......................................................................................................................................101
8.1 Introduction...........................................................................................................................................102
8.2 Outbound to Customer Logistics Systems ...........................................................................................102
8.3 Supply and Demand Relationship.........................................................................................................102
8.4 Graphical Representation of Supply and Demand Relationship...........................................................103
8.5 Demand Management...........................................................................................................................105
8.5.1 The Demand Management Process.......................................................................................106
8.6 Demand Forecasting.............................................................................................................................107
8.7 Demand Planning..................................................................................................................................108
8.8 Demand Forecasting Error....................................................................................................................108
8.9 CPFR.....................................................................................................................................................108
8.10 Customer Service................................................................................................................................109
8.11 Cost of Stock-outs ...............................................................................................................................111
8.12 Channels of Distribution......................................................................................................................111
Summary.....................................................................................................................................................113
References...................................................................................................................................................113
Recommended Reading.............................................................................................................................113
Self Assessment...........................................................................................................................................114
V/JNU OLE
List of Figures
Fig. 1.1 A conceptual model of a basic supply chain......................................................................................2
Fig. 1.2 A supply chain network.....................................................................................................................3
Fig. 1.3 Key parts of supply chain .................................................................................................................3
Fig. 1.4 Flows in a supply chain ....................................................................................................................4
Fig. 1.5 Supply chain management activities.................................................................................................6
Fig. 1.6 Cycle view of supply chain ..............................................................................................................8
Fig. 1.7 Push/pull view of supply chain .........................................................................................................9
Fig. 1.8 Linking competitive (business) and supply chain strategies...........................................................10
Fig. 1.9 Supply chain drivers.........................................................................................................................11
Fig. 1.10 Elements of marketing mix............................................................................................................12
Fig. 1.11 Market space model.......................................................................................................................13
Fig. 2.1 Relationship between number of facilities and logistics cost..........................................................20
Fig. 2.2 Manufacturer storage with direct shipping......................................................................................21
Fig. 2.3 Manufacturer storage with direct shipping and in-transit merge.....................................................22
Fig. 2.4 Distributor storage with package carrier delivery...........................................................................23
Fig. 2.5 Distributor storage with last mile delivery......................................................................................24
Fig. 2.6 Manufacturer or distributor storage with costumer pickup.............................................................25
Fig. 2.7 Elements of e-business domain.......................................................................................................26
Fig. 2.8 Areas of e-business..........................................................................................................................27
Fig. 2.9 Supply chain model.........................................................................................................................32
Fig. 3.1 Flow of product along the supply chain..........................................................................................38
Fig. 3.2 Direct shipping network..................................................................................................................42
Fig. 3.3 Direct shipping network with milk runs..........................................................................................43
Fig. 3.4 Shipments via central distribution network.....................................................................................44
Fig. 3.5 A tailored network...........................................................................................................................44
Fig. 3.6 Savings matrix method....................................................................................................................46
Fig. 4.1 Pricing charges into supply chain....................................................................................................57
Fig. 4.2 The 4 “R” strategy of revenue management....................................................................................57
Fig. 4.3 Pegging in SCM..............................................................................................................................58
Fig. 4.4 Warehousing in SCM.......................................................................................................................59
Fig. 5.1 Integrated supply chain model.........................................................................................................64
Fig. 5.2 Customer relationship management................................................................................................66
Fig. 5.3 SCM goals: the seven rights of fulfilment.......................................................................................67
Fig. 5.4 Internal supply chain ......................................................................................................................67
Fig. 5.5 E-commerce model .........................................................................................................................70
Fig. 6.1 A typical supply chain......................................................................................................................75
Fig. 6.2 Increasing order variability up the supply chain.............................................................................76
Fig. 6.3 CPFR model....................................................................................................................................80
Fig. 7.1 Logistics costs as a percentage of GDP...........................................................................................87
Fig. 7.2 Push and pull systems in supply chain............................................................................................88
Fig. 7.3 Logistic activities.............................................................................................................................90
Fig. 7.4 Inbound and outbound logistics.......................................................................................................91
Fig. 7.5 Nodes and links in a logistics system..............................................................................................93
Fig. 7.6 A simple logistics channel...............................................................................................................93
Fig. 7.7 Relationship between required inventory and order cycle length ..................................................95
Fig. 7.8 Relationship of the cost of lost sales to inventory cost....................................................................96
Fig. 7.9 Relationship of product dollar value to various logistics costs.......................................................97
Fig. 8.1 Supply and demand balance..........................................................................................................103
Fig. 8.2 Supply and demand equilibrium....................................................................................................104
Fig. 8.3 Shift in demand..............................................................................................................................105
Fig. 8.4 Demand management process.......................................................................................................107
Fig. 8.5 Demand forecasting error..............................................................................................................108
Fig. 8.6 Collaborative planning, forecasting and replenishment process...................................................109
Fig. 8.7 Customer service strategy...............................................................................................................110
Fig. 8.8 Channels of distribution.................................................................................................................111
Fig. 8.9 Distribution network.......................................................................................................................112
VI/JNU OLE
List of Tables
Table 4.1 Scoring and assessment of suppliers.............................................................................................55
Table 4.2 Categories of procurement ...........................................................................................................56
Table 7.1 Analysis of total logistics cost with a change to higher cost mode of transport...........................92
Table 7.2 Analysis of total logistics cost with a change to more warehouses..............................................92
Table 7.3 Static analysis of C & B chemical company (50,000 pounds of output)......................................94
Table 8.1 Demand fluctuations based on price and supply.........................................................................105
VII/JNU OLE
Abbreviations
3PL - Third Party Logistics
4PL - Fourth Party Logistics
B2C - Business-to-Consumer
CPFR - Collaborative Planning, Forecasting and Replenishment
CRM - Customer Relationship Management
CRP - Continuous Replenishment Program
ERP - Enterprise Resource Planning
ICT - Information and Communications Technology
ISCM - Internal Supply Chain Management
IT - Information Technology
JIT - Just-in-time
PDA - Personal Digital Assistants
SC - Supply Chain
SCM - Suppliers Relationship Management
SCM - Supply Chain Management
SCOR - Supply Chain Operations Reference Model
UPS - Unit Parcel Service
VMI - Vendor Managed Inventory
WWW - World Wide Web
[Show More]
