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Supply Chain Management:

The Science of Better, Faster, and Cheaper

Bin Zhou

Rutgers Universityzhou@rbs.rutgers.edu

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Outline

What is Supply Chain Management

Why Supply Chain Management is Important

Research and Practice in SCM

Career in Supply Chain Management

What You Can Learn in Supply Chain Management

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A Supply Chain

is the sequence of organizations involved in the transformation of raw materials into finished goods and the delivery of those goods to the customer

Supply Chain Management

is the coordination and integration of the activities: Procure services and materials Transform them into intermediate and final products Deliver them to the customer

What is Supply Chain Management?

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The Supply Chain Network

Material Cash

Information

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What is Supply Chain Management?

Supply Chain Management is also a process management involves

Inter-organizational Cross-functional

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What is Supply Chain Management?

Objective of Supply Chain Management Maximize value & lower waste/cost

Create and sustain competitive advantage (based on the delivery of basic and value-added services)

Achieve “win-win”, global optimal not local optimal

Competition is between supply chains, not single companies

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Components of Supply Chain Management

Production focus on which suppliers to use; how much to produce; when to produce; where to produce…(insource vs. outsource; quantities; time; locations…)

Inventory decide where to store their products and how much to store…(make-to-order vs. make-to-stock; consolidated vs. break bulk; locations…)

Distribution/Logistics address issues about how the products should be moved and stored…(logistic methods; own fleet vs. 3PL…)

Payments look for the best ways to pay suppliers and get paid by customers…(pricing policies; promotion and discounts…)

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Why Supply Chain Management is Important

Huge financial impacts nearly $800 billion on supply chain activities in US and more than $1.4 trillion globally, and it continues to grow

Critical importance to human survivalsupply chain system provides the continuous availability of food,water, medicine, and other key materials people need to survive

Greatly impacts the quality of lifeprovide employment, cost-effective means of sourcing anddistributing goods locally and globally

Affects the success in a wide variety of endeavorsother than the flow of industrial and consumer products, such as Red Cross provides support in life-threatening situations (flood,hurricanes…), military or UN humanitarian activities, Olympic Games…

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Why Supply Chain Management is Important

Supply Chain Opportunities

Typical Benefits From Integrating Supply Chain

17%

55%

40%

52%

13%

25%

15%

0%

10%

20%

30%

40%

50%

60%

70%

Source: Pittiglio Rabin Todd & McGrath

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Why Supply Chain Management is Important

Advances in information technology (IT) and the expanding IT infrastructure are introducing new possibilities to improve service and efficiencies RFID generated cost savings at Wal-Mart

Wal-Mart's CEO Lee Scott said: "We expect RFID to drive down inventory and improve stock turnover, as it helps through the supply chain..."

Source: EAN

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Research and Practice in SCM

Production and Inventory Control Widely used EOQ and (s, S) policies in business practice

Production/inventory policies, single, multiple products Minimum Order Quantity (MOQ)

Single product, multiple product, multiple period Free Shipping Option (FSO)

Single product, multiple product, multiple period

Revenue Management and Pricing Hotel, airline, retail industries Finite and infinite sales horizons Fixed inventory or capacity Pricing policies and timing of price adjustment Resource allocation

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Research and Practice in SCM

Supply Chain Contracts Two-party supply chain Price and order quantities Global and local optimization

Supply Chain Optimization and Consolidation Integrated Production/Inventory/Distribution Multiple modes supply chain Decisions on production, storage, and logistics/routing Global optimization or sub-optimal solutions Consulting projects: General Chemical, Benjamin Moore

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Career in Supply Chain Management

A Variety of Industries to Choose Different Roles and Levels

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Career in Supply Chain Management

Many Functional Areas

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Career in Supply Chain Management

Market Outlook

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Career in Supply Chain Management

Compensation

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Career in Supply Chain Management

Education is critical to successA Recent study by Council of Supply Chain Management Professionals (CSCMP) revealed that “…majority of supply chain managers surveyed hold at least a 4-year degree and an increasing number have graduate degrees. …effective planning is needed. The time for career planning is NOT after college graduation!”

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What You Can Learn

Supply Chain Management builds on several business areas: Accounting, Finance, General Management, Marketing,

and MIS, etc.

Supply Chain Management Cores: Principles/Strategies of Supply Chain Management Supply Chain Logistics and Operations Analysis Supply Chain Information Systems and Enterprise

Resource Planning

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Supply Chain Management Cores

3 Perspectives

Supply Chain Management Strategies (Qualitative)

Principles and concepts in supply chain management including: strategy, sourcing, distribution, performance metrics, international management, and technology management

Supply Chain and Logistics Analysis (Quantitative)

Application of quantitative models in the analysis and design of supply chain systems and in manufacturing, service, and operations environments

Supply Chain IT and Enterprise Resource Planning (Technology)

Enterprise wide process of decreasing operating costs, improving management control, and decreasing cycle time by implementing ERP based solutions and IT systems

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What You Can Learn

Global Sourcing and Procurement

E-Commerce/Marketing

Database Management for Info Systems

Human Resource Management

Quality Management and Control

Project Management

Service Operations Management

And many more…

Functional Electives:

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What You Can Learn

Provide a better understanding of SCM Both educational and professional/practical point of view

Student club/organization Professional societies: APICS, CSCMP, INFORMS Chapters…

“End-to-End” Supply Chain Management training: sourcing and procurement, logistics, operations, strategy, information technology, and organizational alignment

A balanced blend of strategic, tactical, and operational topics

Many choices of functional areas

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What You Can Learn

Opportunities with Corporations 144/500 US biggest companies in NJ/NY US busiest sea port: Port Newark-Elizabeth, I/E Top 5 pharmaceutical companies in US

Assist to pave career path in the Supply Chain Industry Implementation oriented Development of academic/professional plan