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,21st-CenturySupplyChains,Overviewof21st-centurysupplychains,ThesupplychainrevolutionWhyintegrationcreatesvalueGeneralizedsupplychainmodelResponsivenessFinancialsophisticationGlobalization,Introduction,QuestionP203.Comparetheconceptofamodernsupplychainwithmoretraditionaldistributionchannels.Bespecificregardingsimilaritiesanddifferences.,Thesupplychainrevolutionhasreshapedcontemporarystrategicthinking,SupplyChainManagementConsistsoffirmscollaboratingtoleveragestrategicpositioningandtoimproveoperatingefficiencySupplyChainStrategyIsachannelandbusinessorganizationalarrangementbasedonacknowledgedependencyandcollaborationLogisticsTheworkrequiredtomoveandgeographicallypositioninventory,Successfulsupplychainstrategies,Successfulsupplychainstrategies,Source:SupplyChainManagementReview,March/April2000,p.29.,P204.Whatspecificroledoeslogisticsplayinsupplychainoperations?1.Whycanthecurrentmovementtowardestablishingsupplychainsbecharacterizedasarevolution?,Question,OriginsofSupplyChainManagement,1950s&1960sU.S.manufacturersfocusedoncostreductionandproductivityimprovementstrategies1960s-1970sIntroductionofnewcomputertechnologyleadtodevelopmentofMaterialsRequirementsPlanning(MRP)tocoordinateinventorymanagement,OriginsofSupplyChainManagementCont.,1980s&1990sIntenseglobalcompetitionledU.S.manufacturerstoadoptSupplyChainManagementalongwithJust-In-Time(JIT),TotalQualityManagement(TQM),andBusinessProcessReengineering(BPR)practices,OriginsofSupplyChainManagementCont.,2000sandBeyondIndustrialbuyerswillrelymoreonthird-partyserviceproviderstoimprovepurchasingandsupplymanagementWholesalers/retailerswillfocusontransportationandlogisticsmore&refertotheseasquickresponse,serviceresponselogistics,andintegratedlogistics,Thetotalintegrationoftheoverallbusinessprocesscreatesvalue,Table1.1IntegrativeManagementValueProposition,P202.Compareandcontrasteconomic,market,andrelevancyvalue.,Question,Theintegratedvalue-creationprocessmustbemanagedacrossfirmsfromendtoend,Figure1.1TheIntegratedSupplyChainFramework,WhatisaSupplyChain?,Asupplychainconsistsoftheflowofproductsandservicesfrom:RawmaterialsmanufacturersIntermediateproductsmanufacturersEndproductmanufacturersWholesalersanddistributorsandRetailersConnectedbytransportationandstorageactivities,andIntegratedthroughinformation,planning,andintegrationactivities,WhatisaSupplyChain?,WhatisSupplyChainManagement?,Herearetwodefinitions:Thedesignandmanagementofseamless,value-addedprocessacrossorganizationalboundariestomeettherealneedsoftheendcustomerInstituteforSupplyManagementManagingsupplyanddemand,sourcingrawmaterialsandparts,manufacturingandassembly,warehousingandinventorytracking,orderentryandordermanagement,distributionacrossallchannels,anddeliverytothecustomerTheSupplyChainCouncil,WhatisSupplyChainManagement?-Cont.,Oldparadigm-Firmgainedsynergyasaverticallyintegratedfirmencompassingtheownershipandcoordinationofseveralsupplychainactivities.Newparadigm-Firminasupplychainfocusesactivitiesinitsareaofspecializationandentersintovoluntaryandtrust-basedrelationshipswithsupplierandcustomerfirms.,ImportanceofSupplyChainManagement?,Firmshavediscoveredvalue-enhancingandlongtermbenefitsWhobenefitsmost?Firmswith:LargeinventoriesLargenumberofsuppliersComplexproductsCustomerswithlargepurchasingbudgets,ImportanceofSupplyChainManagement?Cont.,FirmswithSupplyChainManagement:StartwithkeysuppliersMoveontoothersuppliers,customers,andshippersIntegratesecondtiersuppliersandcustomers(secondtierreferstothecustomerscustomersandthesupplierssuppliers),ImportanceofSupplyChainManagement?Cont.,CostsavingsandbettercoordinationofresourcesarereasonstoemploySupplyChainManagementReducedBullwhipEffect-themagnifiedreductionofsafetystockcostsbasedoncoordinatedplanningandsharingofinformationProcessIntegration-Interdependentactivitiescanleadtoimprovedquality,reducedcycletime,betterproductionmethods,etc.,Forcesdrivingsupplychainstrategies,InformationtechnologyIntegrativemanagementResponsivenessFinancialsophisticationGlobalization,Integrativemanagementrequiressimultaneousachievementof8processes,Table1.2EightSupplyChainProcesses,P205.DescribeIntegrativeManagement.Bespecificconcerningtherelationshipbetweenfunctionalityandprocess.,Question,Conceptsnecessaryforachievingintegratedmanagement,LowesttotalprocesscostisthefocusofintegratedmanagementDiffersfromlowestcostofeachfunctionintheprocessCollaborationofoperatinginformation,technologyandriskhasbeenencouragedbynationallegislationtokeepUS-basedfirmscompetitiveEnterpriseextensionincludesexpandedmanagerialinfluenceandcontrolbeyondtraditionalownershipboundariesofasingleenterpriseIntegratedserviceproviders(ISP)providearangeoflogisticsservicestoaccommodatecustomers,rangingfromorderentrytoproductdeliveryCommonlyknownasthird(orfourth)partyserviceproviders,P206.Intermsofenterpriseextension,describetheimportanceoftheinformation-sharingandprocessspecializationparadigms?7.Describeandillustrateanintegratedserviceprovider.Howdoestheconceptofintegratedserviceproviderdifferfromtraditionalserviceproviders,suchasfor-hiretransportationandwarehousing?,Question,Responsivenessemergesasacompetitiveadvantage,Figure1.2AnticipatoryBusinessModel,Figure1.3ResponsiveBusinessModel,P208.Compareandcontrastanticipatoryandresponse-basedbusinessmodels.Whyhasresponsivenessbecomepopularinsupplychaincollaborations.,Question,Postponementstrategieskeepsupplychainsresponsive,TypesofPostponementManufacturing(orForm)Geographic(orLogistics)CombinedManufacturingandgeographictypesareexactoppositesinpracticebuthavethesamegoalMeetingcustomerdemandquicklywhileminimizinginventories,Manufacturing(orForm)Postponement,ManufacturingoneorderatatimeBasemodularconstructionofproductNocustomizationuntiltheexactcustomerspecsandfinancialcommitmentisreceivedObjectiveistomaintainproductsinanuncommittedstatusaslongaspossibleBalanceseconomyofscalewithresponsivenessCanbuildasufficientquantityof“readytocustomize”basicunitsRequiresalotofforethoughtduringproductdesign,ExampleofManufacturingPostponement,Keepingallthecarpanelsabasecolor(whiteorgray)untiltheorderisreceived,thenpaintingtothecolorordered,Geographic(orLogistics)Postponement,Buildorstockafull-lineinventoryatoneorafewstrategiclocationsForwarddeploymentofinventoryispostponeduntilcustomerordersarereceivedOnceordersreceived,specificitemisexpeditedtothelocaldistributorAdvantagesaremanufacturingeconomiesofscalealongwithresponsivenesstocustomerOftenusedforcritical,highcostpartsandassemblies(e.g.engines),ExampleofGeographicPostponement,Keepingfullinventoryinacentralwarehouseandreleasingcustomerorderstolocaldistributorsordirectshippingtocustomer,CombinedPostponement,KeepingthebasicproductscentralizedandperformingthecustomizationatthedestinationdistributorHistoricalexample-AutosInstallingdealeroptionslikesoundsystems,GPS,sunroofsonnewcarspurchasedContemporaryexample-ComputersDellComputers,doingfinalassemblyorpackagingadditionalsystemoptionslikeprinters,digitalcamerasatadistributioncenter,P209.Compareandcontrastmanufacturingandgeographicpostponement.,Question,Barrierstoimplementingresponsivesystems,NeedforpubliclyheldcorporationstomaintainplannedquarterlyprofitsExpectationsofcontinuedfinancialresultsoftendrivepromotionalandpricingstrategiesto“loadthechannel”withinventoryNeedtoestablishcollaborativerelationshipsMostbusinessmanagersdonothavetrainingorexperienceindevelopmentofcollaborativearrangements,Financialsophisticationenablesmeasurementoftime-basedsupplychain,Cash-to-CashConversionthetimerequiredtoconvertrawmaterialorinventorypurchasesintosalesrevenueDwellTimeMinimizationdwelltimeistheratiooftimethatanassetssitsidletothetimerequiredtosatisfyitssupplychainmissionCashSpinreducingassetsinthesupplychaincan“spin”cashforreinvestmentinotherprojects,P2010.Defineandillustratecash-to-cashconversion,dwell-timeminimizationandcashspin.Howdoessupplychainstrategyandstructureimpacteach?,Question,Globalizationoffersfirmsseveralattractiveopportunities,Demandexceedslocalsupply90%ofglobaldemandisnotfullysatisfiedbylocalsupplyStrategicsourcingIdentifyingandmatchingthesourcesofrawmaterialsandcomponentstomanufacturersanddistributorsOffshoringMovingmanufacturinganddistributionoperationstocountrieswithfavorablelaborcostsandtaxlaws,Significantdifferencesforgloballogistics,Distanceoftypicalorder-to-deliveryoperationsissignificantlylongercomparedtodomesticbusinessDocumentationrequirementsforbusinesstransactionsissignificantlymorecomplexOperationsmustbedealwithsignificantDiversityinworkpracticesandlocaloperatingenvironmentsHowconsumersDemandproductsandservicesmustaccommodateculturalvariations,FutureTrendsinSupplyChainManagement,ExpandingtheSupplyChainU.S.firmsareexpandingpartnershipsandbuildingfacilitiesinforeignmarketsTheexpansioninvolves:breadth-foreignmanufacturing,office&retailsites,foreignsuppliers&customersdepth-secondandthirdtiersuppliers&customers,FutureTrendsinSupplyChainManagement-Cont.,IncreasingSupplyChainResponsivenessFirmswillincreasinglyneedtobemoreflexibleandresponsivetocustom
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