Azadegan, 2020

MBA Boot camp

Supply Chain Management

Azadegan, 2020

MBA Boot camp

Supply Chain Management

1:30 PM Welcome: Lian Qi – Welcome Note

1:40 PM Arash Azadegan - “What is SCM and what can you do with it?”

2:00 PM Warren Cohen – Practical factors in supply chain management

2:40 PM John Hellriegel – An exercise in supply chain management

3:15 PM Question and Answers

3:25 PM “Concluding Remarks”

3:30 PM Adjourn

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WHAT IS SUPPLY CHAIN?WHY IS IT IMPORTANT TO BUSINESS?

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Agenda

What is Supply Chain Management?

A SCM Framework

Key Concepts in SCM

Important Trends in SCM

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The Global Supply Chain Forum, 2013

Supply Chain Management

… is the management ofrelationships in the network oforganizations, from endcustomers through originalsuppliers, using key cross-functional business processesto create value for customersand other stakeholders.

Source: Douglas M. Lambert, Editor, Supply Chain Management: Processes, Partnerships, Performance, Fourth Edition, Ponte Vedra Beach , FL: Supply Chain Management Institute, 2014, p. 2.

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SIMPLE LINEAR SUPPLY CHAIN

PROCESS

Manufacturer

Original

Raw

MaterialsDistributor Retailer Customer

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Tier 1

SupplierTier 2

Supplier

Tier 3

SupplierTier 3

Custom

er

Tier 2

Custome

r

Tier 1

Custom

er

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Three Primary Flows in Supply Chains

Material

Finances

Information

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Multifaceted nature of each link in the Chain

IT

Service

Provider

Banks

Risk and

Insurance

Government

RegulationsInbound

Logistics

Outbound

Logistics

Warehousing

3PLs

goods

Funds

Information

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Milestones and objectives in Flows in supply

chain

Fulfill to Order ProcessChain from receipt of build/ manufacture order until

received by the customer

Procure to Pay Process Purchase, receiving and payment of goods and services

Order to cash cycle Process Receiving and processing sales order for goods and

services

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Milestones and objectives in Flows in supply chain

CRM CRM CRM

SRM SRM CRM

Tier 2

Supplier

Manufactur

er

Tier 1

Supplier

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Why Supply Chain

Management?

SCM is the key to success for most companies:

More complex supply chains

More uncertainty

Increased competitive landscape

Integration of all business functions (Accounting, Finance, Marketing, Operations, Purchasing, Logistics,

HR, etc.)

Collaboration with customers and suppliers.

New and different challenges

andsolving these issues requires creativity and innovation.

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Key Concepts in SCM

Collaboration among upstream and downstream members

Trust

Commitment

Long term contract with key members

Technology

Enhanced Communication & Data Sharing

ERP (SAP), EDI, SRM, CRM

Developing cross-organizational Capabilities

Supplier Development

Supplier/Customer Involvement in NPD

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Key Concepts in SCM

Network and Structural Optimization

Supplier/Customer Locations

Warehouse/Distribution Locations

Number of suppliers/structure of the network (deep, wide, multiple, etc.)

Managing Supply Chain Risk

Developing Resilience

Developing Visibility and Transparency

Supplier Evaluation

Supply Management Strategies

Supplier Segmentation

Supplier Monitoring

Sustainability

Supplier Dependence/Customer Dependence

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The Diamond-Shaped Supply Chain

Auto company executives

gathered at a conference to

discuss the shortage.

CDT is a main component for manufacturing a nylon resin (PA-

12 or Nylon-12), used in auto fuel

and brake lines.

“High Possibility of Interruptions”

https://drive.google.com/file/d/0B3xtS93

CbKIQQWIxbDUyYUdjNVE/view?usp=shari

ng

Evonik Explosion:

Explosion at chemical

plant in Germany.

Expected to cause

shortage that could disrupt

worldwide car production.

Source:

https://www.mysanantonio.com/business/arti

cle/Plant-blast-hits-automakers-

3489369.php

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Diamond Shaped Supply Chain

Resin Manufacturer –

Tier 2

Tubing Suppliers –

Tier 1

Ford

Chrysle

r

Toyota

General

Motors

"Verona is burning 2" by Sleeping Grey is licensed under CC BY-NC-ND 2.0

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WHY HAS

MODERN SUPPLY CHAIN MANAGEMENT

BECOME IMPORTANT?

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COMPLEXITY –

McDonald’s Cheeseburger

CHEESE

ManufactureMILK

RENNET

SALT

COLORING

CALF

BREEDING

CHEESE

PACKAGING

BUN

Manufacture

KETCHUP

Manufacture

WRAPPERS

Manufacture

EQUIPMENT

Manufacture

CALF

AUCTION

CATTLE

BREEDING

CATTLE

AUCTION

SLAUGHTER

USDA

INSPECTION

BREAKDOWN

GRINDING

USDA

INSPECTION

FORMATION

OF PATTIES

FREEZING OF

PATTIES

PACKAGING

OF PATTIES

PICKLE

Manufacture

ONION

Manufacture

SALT

Manufacture

PEPPER

Manufacture

ALL THIS Just for a

$1.30 Cheeseburger?

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COMPLEXITY OF COMPETITION

"Ford Model T" by dave_7 is licensed under CC BY-SA 2.0

"Hyundai SUV Key Visuals [UNIVERSIADE2019]" by Roman Lavrov, Victor Skea is licensed under CC BY-NC-ND 4.0

"2009 Ford F-150" by x7media is licensed under CC BY-NC 2.0

"Cadillac BLS Concept & Production" by Ernesto Rupar is licensed under CC BY-NC-ND 4.0

"#Cars RUF CTR2 Club Sport. 1 of 15. Credit to a friend. Cool to see in Michigan, Guy has one of the largest Porsche collections." by junaidrao is licensed under CC BY-NC-ND 2.0

Toyota Corolla Sedan" by crash71100 is licensed under CC0 1.0

"renault-clio-sedan" by irfanasci is licensed under CC BY 2.0

"All-new Ford Fiesta Sedan" by Ford Motor Company is licensed under CC BY-NC 2.0

Front 3/4 view" by James086 is licensed under CC BY-SA 2.0

TODAY’S GLOBAL CAR MARKET

CIRCA 1910

Ford Model T

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Product Variety

"walmart grocery" by robert terrell is licensed under CC BY-NC-ND 2.0

Fruit drinks NOW

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INNOVATION

New Apple Phone" by Antonio De Rosa is licensed under CC BY-NC 4.0

"Dell Pro 8 Windows

Tablet" by JakesTechoman is licensed under CC BY-NC-SA 2.0

The Enemy of Long Product Lifecycle

"Deutsche Museum, München" by InSapphoWeTrust is licensed under CC BY-SA 2.0

Gear VR" by ryan2point0 is licensed under CC BY-NC-SA 2.0

Vacuum Tubes

1904

Transistors

1947

Integrated Circuits

1959

Microprocessors

1971

Mainframe

1950s

Minicomputer

1964

Micro Computer

1975

Commodity PC

1982

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22

MADE domestically– No Longer Exists

MADE AROUND THE WORLD

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23

MARGIN

20%

OVERHEAD

8%

PURCHASING

24%

OPERATIONS

24%

LOGISTICS

24%

SUPPLY CHAIN

WHERE DOES THE MONEY GO?

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24

OVERHEAD

8%

PURCHASING

24%

OPERATIONS

24%

LOGISTICS

24%

COST OF GOODS SOLD (COGS) for $1,000,000

Revenue

$800,000 - Supply Chain controls $720,000

SCMCONTROLS

90% of

COGS

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WHY SUPPLY CHAIN MANAGEMENT?

1. Increased Complexity of Products (diversity)

2. Increased Competition competing for Market

3. Increased Complexity of Supply Chain Network

4. Increased Innovation in Products

5. Benefit of Best in Class Time to Market

6. Globalization

7. Supply Chain Mgmt controls 90% of COGS

8. … more

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SCM Positions

Supply Chain Planners

Buyer/Purchasing Manager

Inventory Control Manager

Demand Planner

Supply Chain Analyst

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SCM Positions across careers

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SCM Positions across careers

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SCM Positions across careers

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Why Rutgers SCM

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Thank you

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