CHAPTER 10 : EXTENDING THE ORGANIZATION SUPPLY CHAIN MANAGEMENT

10.1  List and describe the components of a typical       

          supply chain

10.2  Define the relationship between decision

         making and supply chain management

10.3  Describe the four changes resulting from advances in IT that are driving supply chains

10.4  Summarize the best practices for implementing a  

         successful supply chain management system

Supply Chain Management

The average company spends nearly half of every dollar that it earns on production 

In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains

Basics of Supply Chain

The supply chain has three main links:

1. Materials flow from suppliers and their “upstream” suppliers at all levels
2. Transformation of materials into semifinished and finished products through the organization’s own production process
3. Distribution of products to customers and their “downstream” customers at all levels

Information Technology’s Role in the Supply Chain

IT’s primary role is to create integrations or tight process and information linkages between functions within a firm

Visibility

Supply chain visibility – the ability to view all areas up and down the supply chain

Bullwhip effect – occurs when distorted product demand information passes from one entity to the next throughout the supply chain

Consumer Behavior

Companies can respond faster and more effectively to consumer demands through supply chain enhances 

Demand planning software – generates demand forecasts using statistical tools and forecasting techniques

Competition

Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain

Supply chain execution (SCE) software – automates the different steps and stages of the supply chain

Speed

Three factors fostering speed

Supply Chain Management Success Factors

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