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Slide 4.1

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

Structure and Supply Chains

An organization structure is the sum total of the ways

in which the enterprise divides its labor into distinct

tasks and achieves co-ordination among them.

Mintzberg Definition

Control Requires:

1. A power base

2. A control mechanism that may take the

form of one of the following:

Centralization

Formalization

Output control

Cultural control

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Slide 4.2

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

Structure and Supply Chains

McKinseys 7S Model

Seven interrelated factors that organizations wishing to become

more customer orientated need to address

SharedValues

Skills Style Systems

Structure Strategy Staff

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Slide 4.4

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

Structure and Supply Chains

A network structure is a series of strategic alliances that anorganization forms with suppliers, manufacturers and distributors

to produce and market a product.

A network is not a world of individual and isolated transactions.

Network structures allow organizations to bring resources together

on a long-term basis to reduce costs.

Networks relate to all aspects of the supply chain, including

marketing and distribution.

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Slide 4.5

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

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Slide 4.6

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

Target costing work backwards to meet target

Use of value engineering/value analysis

Use of cross functional teams

Just-in-time pull system

Zero defects

Assembler and first-tier supplier co-operation

Lean Production Key Aspects

1

2

3

4

5

6

Structure and Supply Chains

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Slide 4.7

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

Enablers of Agile Manufacturing

Structure and Supply Chains

Directly collects customer requirements through on-line communications

systems

Electronic commerce

Provides a quick response to the need for shorter product development cyclesConcurrent engineering

This includes CAD, CAE and CE to reduce product development timesRapid prototyping tools

The integration of diverse systems of participating organizationsIntegrated

product/production

systems

Achievable through tools such as IT and QFD techniquesRapid partnership

formation tools

A temporary alliance of partner enterprises located all over the worldPhysically distributed

teams & manufacturing

Each Functional aspect may be performed by many different organisations

using Internet

Virtual enterprise

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Slide 4.8

Lysons & Farrington, Purchasing and Supply Chain Management, 7thedition, Pearson Education Limited 2005

Structure and Supply Chains

Hines and Rich Value Stream Mapping Tools

Provides overviews of a particular supply chain from an industry perspectivePhysical structure

Identification for the purpose of improvementQuality filter mapping

Identifies when products stop being made in accordance with actual demandDecision point analysis

Identification of demand changes along the supply chainDemand amplification

Targeting of inventory reductionsProduction variety funnel

Reduction of lead times and inventorySupply chain response

matrix

Reduction of wasteProcess activity mapping