The Supply Chain - Chapter 1

Chapter 1: Supply Chain: all parties involved ([in] directly) in fulfilling a customer request dynamic, constant flow of information, products & funds in different stages STAGES vary but usually • direction of materials, products Suppliers customers ← retailers ← wholesalers/ distributors receives product sends output PURPOSE: Satisfy company needs & generate profit for itself 3 KEY FLOWS: INFO, PRODUCT, FUNDS Supplier info Stage Product set of processes & flows used to fulfill Customer request funds OBJECTIVE: max net value generated: difference between the value of final product is to the Customer & the costs the entire Supply chain incurs in filling custo- mer's request willing to pay SUPPLY CHAIN SURPLUS = Customer value - Supply chain cost SUPPLY CHAIN PROFITABILITY= revenue from customer overall cost CONSUMER SURPLUS cost of product & customer's value of product SOURCE OF REVENUE: only one → Customer Customer Stage AKA Supply Chain Decision Phases SUPPLY CHAIN STRATEGY & DESIGN: focus on the structure of supply chain for next years decides configuration, resource allocation, process of each stage decide outsource or in-house functions location & production capacity products stored or manufactured transportation increase supply chain surplus long term, take in future market conditions SUPPLY CHAIN PLANNING: focus on the next quarter to a year Constraints within planning goal is to max Supply chain surplus forecast demand & other factors ($ in markets) decisions on markets Supplied in which locations subcontracting or manufacturing inventory policies timing, marketing, price promotions shorter time better forecast, include flexibility SUPPLY CHAIN OPERATION: Weekly / daily decisions regarding individual customer orders Supply chain config is fixed & planning policy defined allocate inventory/production to orders handle customer orders in best way set order dates, shipping methods, pick warehouse less uncertainty SUPPLY CHAIN VIEWS CYCLE VIEW: processes are divided into series of cycles each performed at interface between 2 successive phases of chain 4 PROCESS CYCLES * customer order cycle * manufacturing cycle * replenishment cycle * procurement cycle CUSTOMER ORDER CYCLE all pull processes RETAILER orders uncertain but projected, retail order trigger retail order entry retail order fulfillment retail order receiving REPLENISHMENT CYCLE all push processes DISTRIBUTOR orders uncertain but projected, production scheduling MANUFACTURING CYCLE all push processes MANUFACTURER orders uncertain but projected, product marketing PROCUREMENT CYCLE all push processes SUPPLIER starts w/ marketing product to customers buyer places order supplier received by buyer supplier stage receives order supplier stage supplies order Buyer stage places order Buyer stage receives supply Supplier stage markets product Supplier returns reverse flows to supplier or third party SCOR MODEL: Source, make, deliver, return process returns Specifies roles & responsibilities of each member PUSH/PULL VIEW: processes are divided into 2 categories, depending on if they're executed in response to customer order or in anticipation of customer orders PULL: processes initiated by an order reactive, uncertain environment PUSH: processes initiated & performed in anticipation of an order Speculative processes, predictive environment individual order #s declines Image Analysis Content: The image presents a diagram illustrating the push/pull view of a supply chain. It divides processes into push and pull categories based on their initiation and execution. The diagram also introduces three macro-processes: Customer Relationship Management (CRM), Internal Supply Chain Management (ISCM), and Supplier Relationship Management (SRM).   Textual Content: push/Pull view of supply chain Push Processes Pull Processes Process Process Process Process Process Process Process 1 2 k +1 N-1 N Customer Order Arrives MACRO PROCESSES CUSTOMER RELATIONSHIP MANAGEMENT CRM: all processes at the interface between the firm & its Customers INTERNAL SUPPLY CHAIN MANAGEMENT ISCm: all processes that are internal to the firm SUPPLIER RELATIONSHIP MANAGEMENT SRM processes at the interface firm & its suppliers all between the   Supplier Finn Customer SRM ISCM CRM • Source • Strategic Planning • Market • Negotiate • Demand Planning • Price Buy Supply Planning • Sell Design Collaboration • Fulfillment • Call Center Supply Collaboration • Field Service • Order Management