A Strategic Framework for Supply Chain Design, Planning, and Operation.doc

A Strategic Framework for Supply Chain Design, Planning, and Operation
A Strategic Framework for Supply Chain Design, Planning, and Operation
Syllabus
Outline
What is supply chain management?
A supply chain strategy framework
Seven Eleven Japan
Traditional 5>View: Logistics in the Economy (1990, 1996)
Freight Transportation $352, $455 Billion
Inventory Expense $221, $311 Billion
Administrative Expense $28>7, $31 Billion
Logistics related activity 11%, 101>.5% of GNP.
Source: Cass Logistics
Traditional View: Logistics in the Manufacturing Firm
Profit 4%
Logistics Cost 21%
Marketing Cost 27%
Manufacturing Cost 48%
Profit
Logistics
Cost
Marketing
Cost
Manufacturing
Cost
Supply Chain Management: The Magnitude in the Traditional View
Estimated that the grocery industry could save $30 billion (10% of operating cost by using effective logistics and supply chain strategies
A typical box of cereal spends 104 days from factory to sale
A typical car spends 15 days from factory to dealership
Laura Ashley turns its inventory 10 times a year, five times faster than 3 years ago
Supply Chain Management: The True Magnitude
Compaq estimates it lost $ billion to $1 billion in sales in 1995 because laptops were not available when and where needed
When the 1 gig processor was introduced by AMD, the price of the 800 meg processor dropped by 30%
P&G estimates it saved retail customers $65 million by collaboration resulting in a better match of supply and demand
What is a supply chain?
Customer wants
detergent and goes
to Jewel
Jewel
Supermarket
Jewel or third
party DC
P&G or other
manufacturer
Plastic
Producer
Chemical
manufacturer
(. pany)
Tenneco
Packaging
Paper
Manufacturer
Timber
Industry
Chemical
manufacturer
(. pany)
Flows in a Supply Chain
Customer
Information
Product
Funds
Cycle View of Supply Chains
Customer Order Cycle
Replenishment Cycle
Manufacturing Cycle
Procurement Cycle
Customer
Ret