supply chain management 1

5/23/2018 Supply Chain Management 1

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Operations Management and Organisational

Improvement: Session 4

Supply Chain Management 1

Professor David Oglethorpe

Logistics & Supply Chain Management

Core text for this session:

Slack, Chambers, Johnston and Betts, (2006), Operations andProcess Management, 1st edition, Pearson Education

Chapter 3,4,5 & 7

This is also a Reference source for many of the following slides


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Session Aims

To appreciate the need for good supply chainmanagement;

To appreciate key SCM principles;

To begin to understand how to match demand andsupply chains;

To be introduced to supply chain strategies.


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Diagnostic Question:

What is supply chain management?

Supply chain management is concerned with managing the flow of materials and

information between the operations that form the chains of a supply network


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Supply chain management is concerned with the flow of information as well as the

flow of products and services

Your ability to manage supplywill foremost depend

on your ability to respond to demand


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Input supplier

Marketer/Merchant

Processor

Manufacturer

Primary Producer

Consumer

The Food Supply Chain

Distributor

Exports

Impo

rts

Retailer Caterer

Demand

Chain

Supply

Chain
http://www.whitbread.co.uk/index.cfmhttp://www.bocmpauls.co.uk/bocmpauls/main/homepage.jhtmlhttp://www.3663.co.uk/gen/default.aspxhttp://www.whitbread.co.uk/index.cfm


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http://www.yourtechtv.com/viewVideo.php?video_id=457&title=Ocado_Supply_Chain__part_

1_

http://www.yourtechtv.com/viewVideo.php?vi

deo_id=458&title=Ocado_Supply_Chain__

part_2_
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Supply Chain Evolution

Successful Supply Chains evolve through a process of Co-operation, Co-ordination, Collaboration and finallyConsolidation


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Co-operation, Co-ordination, Collaboration,

Consolidation

S1

S2

S3S4

S5

S6

S7

S8

2S1

2S4

2S2

2S3

R2

R1


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Consolidation

1

st

Tier SuppliersS1

S2

S3S4

S5

S6

S7

S8

2S1

2S4

2S2

2S3

R2

R1


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Consolidation

1

st

Tier SuppliersS1

S2

S3S4

S5

S6

S7

S8

2S1

2S4

2S2

2S3

R2

R1


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Consolidation

1

st

Tier SuppliersS1

S2

S3S4

S5

S6

S7

S8

2S1

2S4

2S2

2S3

R2

R1


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Consolidation

1

st

Tier Suppliers

SX

(S7, S8 relocate

)

2SA

(2S4 relocates)

R2

R1

SY

(S1, S2, relocate)

2SB

(2S1 relocates)

Richard Wilding
http://www.yourtechtv.com/viewVideo.php?video_id=443&title=Building_Collaborative_Supply_Chainshttp://www.yourtechtv.com/viewVideo.php?video_id=443&title=Building_Collaborative_Supply_Chains


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E.g. Warburtons Supply Chain


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Supply Chain Strategies

Supply chain strategies need to be set so that value isadded to product.

Where product is varied and differentiation is possible,

value can be in output; Where product is homogenous, value is achieved

through streamlining, cost reduction and qualitymanagement of inputsthe value chain.

Key strategies to deliver the value chain are lean and

agile processes.


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Lean Supply Chains

As the name suggests, lean systems areones with minimal waste;

The seven wastes: Overproduction;

Waiting time;

Transportation;

Inappropriate or unnecessary manufacture;

Unnecessary inventory;

Unnecessary movement of goods;

Defective products.

Push versus Pull.


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Agile Supply Chains

Mass productioncustomised productionmass customisation;

Flexibility and responsiveness with

standardisation;

Leave final product specification to the latest

stage of production as possible

Postponement

E.g. Toyota, Citron & Peugeot:


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Toyota Aygo, Citroen C1 and

Peugeot 107 all produced in a

purpose-built joint-owned

factory.

The 3 cars share 92% of the

same components.

P&C responsible for sourcing &

procurement, T for assembly.


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Choice of SC Strategy

Long lead time

Lean, planning &

execution(e.g. artificial

Christmas trees)

Leagile,

postponement(e.g. Toyota, Citroen,

Peugeot)

Short lead time

Lean, continuous

replenishment(e.g. Tesco fresh

produce)

Agile, quick

response(e.g. Zara)

Predictable

demand

Unpredictable

demand

Typically

outsourced

Typically

in-house


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Demand fluctuations become progressively amplified back up through the supply

chain bullwhip effect

EPOS systems used by many retailers can help up-stream operations see real-

time movements in market place Typical supply chain dynamics

Major Supply Chain Problemsthe bullwhip effect

Typical supply chain dynamics

supply chain management 1

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