U3 & CHAPTER 10 : Extending The Organizational Supply Chain Management ( 15th February 2017, 10.44a.m.)

Assalamaualaikum Dear Bloggers,

I need to be as well prepared as possible  to update this blog because since yesterday 2 hours class, my lecturer speed up her lecturers upon chapter 10, 11 and 12 in one class. So need to be well updated before the WEEK 14 arrives where all the assignment in individual or group will be handed in that is between 13 March 2017 - 17 March 2017.

As you can recall, we have already studied the pre-face of this chapter which its subtopic is Supply Chain Management (SCM).

But now, you guys are gonna dive in the topic more detailed on what is SCM is all about and what it does..

* SUPPLY CHAIN MANAGEMENT *

-  An 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.

THE BASICS...

- The 3 basics links

• Materials flow from suppliers and their upstream suppliers at all levels.
• Transformation of materials into semi-finished and finished products through the organization;s own production process
• Distribution of products to customers and the downstream customers to all levels.

- Plan

A company must have a plan for managing all the resources that go toward meeting customer demand for products and services

- Source

Companies must have carefully choose reliable suppliers that will deliver goods and services required for making their products.

- Make 

This is the step where companies manufacture their products of services. This can include scheduling the activities necessary for production , testing, packaging, and preparing for delivery.

- Deliver (Logistic)

Companies must be able to receive orders from customers, fulfill those orders via a network of warehouses, pick transportation companies to deliver the products, and implement a billing and invoicing system to facilitate payments.

- Return 

This is typically the most problematic step in the supply chain. Companies must create a network for receiving defective and excess products and support customers who have problems with delivered products.

THE FACTORS...

 

- Visibility

More visible models of different ways to do things in the supply chain have emerged. High visibility in the supply chain is changing industries, as Wal-Mart demonstrated.

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

Supply chain visibility allows all organizations to eliminate the bullwhip effects

Example of Bullwhip effects

Diapers, the need of diapers is constant, it does not increase on festive seasons and it is a demand for all year long. The number of  newborn babies determines diaper demand and that number is constant. Retailers order diapers from distributors when their inventory falls below a certain level, they might order a few extra just to be safe. Distributors order diapers from manufactures when their inventory level falls below a certain level, they might order a few extra just to be safe. Manufactures order diapers from manufactures when their inventory level falls below a certain level, they might order a few extra just to be safe. Eventually,, the on or two extra boxes ordered from a few retailers becomes several thousand boxes for the manufacturer. This is the bullwhip effect, a small ripple at one end makes a large wave at the other end of the whip.

- Consumer Behavior

Companies can respond faster and more effectively to consumer demands through supply chain enhances. Once an organization understands customer demand and its effect on the supply chain it can begin to estimate the impact that its supply chain will have on its customers and ultimately the organizations performance.

Demand Planning Software = Generates demand forecasts using statistical tools and forcasting techniques

- Competition 

Supply Chain Planning software SCP  =  used advanced mathematical algorithms to improve the flow and efficiency of the supply chain

Supply Chain Execution software SCE  = automates the different steps and stages of the supply chain

SCP and SCE both increases a companies's ability to compete

SCP depends entirely on information for its accuracy

SCE can be as simple as electronically routing orders from a manufacture to a supplier.

- Speed

3 main factors that fostering speed

• Pleasing a customer has become something of a corporate obsession. Serving the customer in the best, most efficient, and most effective manner has become critical and information about issues such as order status, product availability , delivery schedules. and invoices has become a necessary part of the total customer service experience.
• Information is crucial to manager's abilities to reduce inventory and human resource requirements to a competitive level.
• Information flows are essential to strategic planning for and deployment of resources.

THE SUCCESS FACTORS...

1.) Make the sale to suppliers
2.) Wean employees off traditional business practices
3.) Ensure the SCM system supports the organizational goals
4.) Deploy in incremental phases and measure and communicate success
5.) Be future oriented

Thank You...