Supply Chain Management

supply chain managements

• the average company spends nearly half of every dollar that it earns on production
• in the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains

basics of supply chain

• the supply chain has three main links
1. materials flow from suppliers and their 'upstream' suppliers at all levels
2. transformation of materials into semifinished and finished product through the organization's own production process
3. distribution of products to customers and their 'downstream' customers at all levels
• organizations must embrace technologies that can effectively manage supply chain

visibility

• supply chain visibility - the ability to view all areas up and down the supply chain
• bullwhip effect - occurs when distorted product demand information passes from one entity to the next throughout the supply chain

consumer behavior

• companies can respond faster and more effectively to consumer demands through supply chain enhances
• demand planning software - generates demand forecasts using statiscal tools and forecasting techniques 

competition

• supply chain planning (SCP) software - uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain
• supply chain execution (SCE) software - automates the different steps and stages of the supply chain

speed

• there factors fostering speed
1. pleasing customers has become something of a corporate obsession. serving the customer in the best, most efficient, and most effective manner has become critical, and informaion about issues such as order status, product availability, delivery schedules, and invoices has become a necessary a part of the total customer service experience.
2. information is crucial to managers' abilities to reduce inventory and human resource requirements to a competitive level.
3. information flows are essential to strategic planning for and deployment of resources.

supply chain management success factors

seven principles of supply chain management

1. segment customers by service needs, regardless of industry and then tailor services to those particular segments
2. customize the logistics network and focus intensively on the service requirements and on the profitability of the preidentified customer segments
3. listen to signals of market demand and plan accordingly. planning must span the entire chain to detect signals and changing demand.
4. differentiate products closer to the customer, since companies can no longer afford to hold inventory to compensate for poor demand forecasting.
5. strategically manage sources of supply, by working with key suppliers to reduce overall costs of owning materials and sevices
6. develop a supply chain information technology strategy that supports different levels of decision making and provides a clear view (visibility) of the flow of products, services and information.
7. adopt performances evaluation measures that apply to every link in the supply chain and measure true profitability at every stage.

SCM industry best practices include:

1. make the sale to suppliers
2. wean employees off traditional business practices 
3. ensure the SCM system supports the organizational goals
4. deploy in incremental phases and measure and communicate success
5. be future oriented

SCM success stories

• top reasons why more and more executives are turning to SCM to manage their extended enterprises
• numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of intergrated supply chains
• DSSs allow managers to examine performance and relationships over the supply chain and among:
• suppliers
• manufacturers
• distributors
• other factors that optimize supply chain performance
• companies using supply chain to drive operations
• dull
• nokia
• procter & gamble
• wal-mart stores
• toyota motor 
• the home deposit
• best buy
• marks & spencer