SCM: 供應鏈子管理 Introduction and Its Technology

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SCM: 供應供應鏈鏈子管理子管理 Introduction and Its Technology Research Trends

Heung-Suk Hwang ( 黃興錫 )

Department of Business and Administration,

Kainan University, Taiwan

2005. 11. 22.2005. 11. 22.

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Characteristics of Consumer ProdCharacteristics of Consumer Product Goods Industryuct Goods Industry

• Global Supply Chain / Complex Distribution Networks

• High Volume - Low Margins• Competitive Environment / Promotions• High Customer Service / Make to Stock• Demand exceeds Supply / Product Mix Optimiz

ation• Seasonal Demands / Inventory Build Ups• Value Added Service for Customers (Retailers)

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5 Steps of e-Business Progress Model

ContentsContents Managing policyManaging policy

Step 1Step 1 Internet Application, only for com. PR Internet Application, only for com. PR Homepage Dev.Homepage Dev.

Step 2Step 2 Start to develop new product and services according to internet level

Start to develop new product and services according to internet level

e-mail, MarketingCo-invest with

venture co.

e-mail, MarketingCo-invest with

venture co.

Step 3Step 3 Implementing the internet technology into industry works

Implementing the internet technology into industry works

Development ofIntra-net

Development ofIntra-net

Step 4Step 4 Using internet suppliers, co-relate customers and business partners

Using internet suppliers, co-relate customers and business partners

Cooperation,networking

Cooperation,networking

Step 5Step 5 Customer’s information delivered in real time

Customer’s information delivered in real time Data marketingData marketing

物流管理發展的段階

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Change patterns of e-Business: Sales and circulation

分配

分配

小買業

小買業

消備者

消備者

Conventional BusinessConventional Business e- Business e- Business

▶ For the customers, needs several steps between suppliers and customers ▶ The cost of several steps distributed to the customers▶ Generally the sales model is based on sales commission

製造業

供給者

▶ Direct sales between producers and customers▶ Cost down portion by on-line trade is returned to customers▶ Producers transfer the sales cost into marketing cost

製造業者製造業者消費者消費者

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ERP

MRPII

MRP Materials Requirement Planning

Manufacturing Resource Planning

Enterprise Resource Planning

Integrate by Value Chain Management

Evolution to Logistics/SCM

1960’s

1970’s

2000’s

1980’s WithinCompany

BetweenCompany

SCMSupply Chain Management1990’s

e-Logistics

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• By predetermined business rule, the logistics process system is completed within a few seconds

• Tracing and controls/confirms by order unit

• Shorter leadtime, fewer errors, inventory reduction

• Some obstacles, but inevitable move

Order Inv. Checking

Production Schedule

Check

Suppliers CheckCustomer service

Distribution

New Wave of Net-centric Logistics

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Supply Chain: from Original Supply to Final Consumption

Increase Customer Responsiveness at Least Cost

Manufacturing DistributionSupplier

INFORMATION FLOW

Retail Outlet Consumer

Supply Chain Optimization

CASH FLOW

Transfer Transfer Transfer Transfer

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SCM(Supply Chain Management)

• Integration of key business processes from end user through original suppliers that provides products, services, and information that add value for customers and other stakeholders

global optimum

- The Global Supply Chain Forum(GSCF)

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Logistics( 物流 )

• Part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point-of-origin to the point-of-consumption in order to meet customers’ requirements local optimum

(Council of Logistics Management )

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Key Objectives of Supply Chain

• Maximize responsiveness to customer– Flexibility– On time delivery

• Minimize total supply chain costs– Procurement– Manufacturing– Transportation– Administrative

• Optimize asset utilization– Raw material, WIP and finished goods

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Strategic Objectives of SCMStrategic Objectives of SCM

Costs

Market Share

Sales Volume

Growth Rate

CustomerSatisfaction

Product Quality

Time to Market

Profits

Important drivers are customer satisfaction and profits.

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Perceived Benefit of SCM-related Investments

Perceived Benefit of SCM-related Investments

DemandForecasting

Marketing

Sales

ProductDevelopment

WarehousingTransportation

InventoryManagement

Purchasing

Manufacturing

2

4

6

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Survey of Fortune 1000 companies (by Lockheed Martin and Penn State’s Center

for Logistics Research) Approximately 33% of the respondents

indicated they were engaging in SCM improvements in 1995.

64% were making improvements in 1997. 45% of respondents believe they will be making

SCM improvements in the each of the next three years

“Leading” companies showed a pattern of continued investment in SCM Improvements

Investment for SCMInvestment for SCM

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Supply Chain Business Processes

Supply Chain Management Components

Supply Chain Network Structure

SCM Framework

What process should be linked with each of thesekey supply chain members ?

What level of integration and management should be applied for each process link ?

Who are the key supplychain members with whomto link processes ?

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Tier 3 toinitialsuppliers

Tier 2 suppliers

Tier 1suppliers

Tier 1Customers

Tier 2Customers

Tier 3 toConsumers/End-Customers

Focal Company Members of the Focal company’s Supply Chain

Init

ial S

uppl

iers

Tie

r 3

to n

sup

plie

rs

2

1

n

1

n

2

1

1

n

3

n

1

2

3

n

1

2

n2

1

n

1

n

2

1

n Tie

r 3

to n

cus

tom

ers

Con

sum

ers

/ End

-cus

tom

ers

Supply chain network structureSupply chain network structure

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Primary Aspects of Primary Aspects of Supply Chain Network StructureSupply Chain Network Structure

• Members of the supply chain

• structural Dimension of the NetworkNetwork

• different types of Process links across the supply chain

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Members of supply chainMembers of supply chain• Primary members of a supply chain: autonomous companies or strategic business units

who carry out Value-adding activities in the business processes designed to produce a specific output for a particular customer or market.

• Supporting members:

companies that Simply provide resources, knowledge, utilities, or assets for the primary members of the supply chain.

Ex) companies leasing trucks, banks, owner of warehouse space etc.

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Structural dimension of networkStructural dimension of network• horizontal structure: number of tiers across the supply chain. Ex) the network structure for bulk cement is relatively short.

Raw materials are taken from the ground, combined with other materials, moved a short distance, and used to construct buildings

• vertical structure: number of suppliers/customers represented within each tier. A company can have a narrow vertical structure, with few companies at each tier level, or a wide vertical structure with many suppliers and/or customers at each tier level.

• horizontal position within the supply chain: position of focal company at near the initial source of supply, or near to the ultimate customer.

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KeyKey supply chain processes supply chain processes

• Customer relationship management• Customer service management• Demand management• Order fulfillment• Manufacturing flow management• Procurement• Product development and commercialization• Returns

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Supply Chain Business ProcessesSupply Chain Business Processes

• Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes.

• Traditionally, both upstream and downstream portions of the supply chain have interacted as disconnected entities receiving sporadic flows of information over time

• Operating an integrated supply chain requires continuous information flows, which in turn help to create the best product flows.

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Su

pp

ly C

hai

n B

usi

nes

s P

roce

sses

Information Flow

LogisticsPurchasing Marketing & Sales

R&DProduction Finance

PRODUCT FLOW

CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER SERVICE MANAGEMENT

DEMAND MANAGEMENT

ORDER FILFILLMENT

MANUFACTURING FLOW MANAGEMENT

PROCUREMENT

PRODUCT DEVELOPMENT AND COMMERCIALIZATION

RETURNS

ManufacturerTier 1

Supplier

Tier 2

SupplierCustomer Customer

End-Customer

SCM: Integrating and managing business processes across the supply chainSCM: Integrating and managing business processes across the supply chain

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Tier 3 toinitialsuppliers

Tier 2 suppliers Tier 1

suppliers Tier 1Customers

Tier 2Customers

Tier 3 toConsumers/End-Customers

Focal Company Non-Members of the Focal company’s Supply Chain

Init

ial S

up

pli

ers

Tie

r 3

to n

su

ppli

ers

2

1

n

1

n

2

1

1

n

3

n

1

2

3

n

1

2

n2

1

n

1

n

2

1

n Tie

r 3

to n

cu

stom

ers

Con

sum

ers

/ En

d-c

ust

omer

s

Types of intercompany business process links

Members of the Focal company’s Supply Chain

1

n

1

nManaged process link Not-Managed process link

Monitor process link Not-member process link

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Sup

ply

Cha

in B

usin

ess

Pro

cess

es

Information Flow

LogisticsPurchasing Marketing & Sales

R&DProduction Finance

PRODUCT FLOW

CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER SERVICE MANAGEMENT

DEMAND MANAGEMENT

ORDER FILFILLMENT

MANUFACTURING FLOW MANAGEMENT

PROCUREMENT

PRODUCT DEVELOPMENT AND COMMERCIALIZATION

RETURNS

ManufacturerTier 1

Supplier

Tier 2

SupplierCustomer Customer

End-Customer

SCM: disconnectsSCM: disconnects

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Management Components for Management Components for Successful SCMSuccessful SCM

((physical and technical components)physical and technical components)• planning and control of operations;

moving supply chain in a desired direction• work flow/activity structure;

how the firm performs its tasks and activities.• organization structure;

individual firm and the supply chain, the use of cross-functional teams

• product flow facility structure; network structure for sourcing, manufacturing, and distributing across the supply chain.

• Communication & information flow facility structure; kind of information passed among channel members

and the frequency of information updating

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Management Components for Management Components for Successful SCM (cont.)Successful SCM (cont.)

((managerial and behavioral components)managerial and behavioral components)

• management methods; corporate philosophy and management techniques, a top-down organization structure with a bottom-up structure

• power and leadership structure; • risk and reward structure; • culture and attitude

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SCM Decision Areas through Internet

• Purchasing/procurement

• Inventory management

• Transportation

• Order processing

• Customer service

• Production scheduling

• Relations with vendors

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Purchase/Procurement Decision Areas

• EDI programs with vendors• On-line purchasing from vendor catalogs• Communicating with vendors• Negotiation with vendors• Checking price quotations of vendors• Arranging for returned/damaged products to

vendors• Dealing with warranty issues of vendors

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Inventory Management Decision Areas

• EDI programs with vendors• Coordination of JIT delivery programs• Communication with customers on out-of-stocks, etc.• Notification of delays in order ship dates to customers• Communication with vendors on raw-material

inventory levels• Communication with customers on emergency

situations affecting inventory levels• Communication with vendors on finished-goods

inventory levels• Communication with field warehouses and depots on field inventory levels• Communication with field depots on out-of-stock

situations, emergencies, etc.

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Transportation Management Decision Areas

• Scheduling pickups at regional distribution centers

• Scheduling drop-offs at regional distribution centers

• Monitoring on-time arrivals of carriers

• Managing claims status and processing communication with carriers on overall performance

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Order Processing Management Decision Areas

• Communication with customers on order status• Communication with vendors on order efforts• Communication with customers on out-of-stocks• Check credit status of customers• Check credit status of vendors• Communication with customers on returned

merchandise• Providing total order-cycle performance for customers• Providing credit processing status to customers• Obtaining price quotes from vendors• Providing price quotes to customers

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Customer Service Management Decision Areas

• Receipt of customer complaints• Providing technical service• Notifying customers of emergencies in

the supply• chain—strikes, fires, etc.• Use of Internet to sell to customers• Manage the outsourcing of customer

service functions

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Production Scheduling Decision Areas

• Coordination of production schedules with vendors• Coordination of production schedules with field

depots• Coordination of production schedules with JIT

schedules of vendors• Coordination of production schedules of multiple

manufacturing sites in the United States• Coordination of production schedules of multiple

manufacturing sites at international locations

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Vendor Relations Decision Areas

• Coordination of deliveries of vendors to field warehouses and depots

• Communication with vendors regarding raw-material stock levels at their plant sites

• Purchasing of items from vendor on-line catalogs–supply lists

• Receipt of information queries from vendors

• Provision of information regarding vendor queries

• Providing vendors with service ratings on their overall performance

• Processing of returned materials, damaged products to vendors

• Providing vendors with ratings of the on-time performance of their carriers

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Research Groups for SCM

• Supply Chain Council

- Supply Chain Operations Reference (SCOR) Model

- www.supply-chain.org

- Korea chapter (한국능률협회컨설팅 )

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Research Groups for SCM (cont.)Research Groups for SCM (cont.)

• The Global Supply Chain Forum(GSCF)

- A group of non-competing firms and a team of academic researchers

- To improve theory and practice of SCM

- Director: Prof. Lambert at Ohio St. U.

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Research Groups for SCM (cont.)

• Council of Logistics Management

• http://www.CLM1.org

• Journal of Business Logistics

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Suggestions For Future Research

• What are the operational definitions of the key business processes and what are the relationships among these processes?

• How do you obtain the functional areas in order to implement a process approach within the firm?

• How can the various participants in a company be encouraged to work toward a common goal?

• Beyond internal integration, how should inter-organizational change management be implemented?

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suggestions for future research (cont.)

• How should the existing supply chain be mapped?• Should the map include all connected firms or only

the primary firms? • Are there other means of determining who should

and should not be part of the supply chain map? • What are the implications for good SCM practice

based upon the horizontal structure, the vertical structure, and focal company position in the supply chain?

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• What is the value proposition at the consumer level or end point of the supply chain?

• What are the methods that should be used to determine value?

• How should the various firms in the supply chain share the costs and the benefits?

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• What metrics should be used to evaluate the performance of the entire supply chain, individual members or subsets of members?

• What are the potential barriers to implementation and how should they be overcome?

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• What is the process to take the map of the existing supply chain and to modify it to obtain the best supply chain given the desired outputs?

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• What determines with whom to link business processes?

• What are the steps to take to determine with whom to link?

• What are the critical factors to the firm’s success and that enable the firm to link with specific companies?

• What are the barriers to forming these relationships?

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• What determines the processes to link with these key members?

• How should the firm decide which internal processes to link with suppliers and customers?

• What decision criteria determine whose internal business processes prevail across all or part of the supply chain?

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• What determines the type/level of integration that should be applied to each process link?

• Some guidelines regarding what level of management components to apply to achieve the desired relationship and management of a link.

• Do changes in the physical and technical components automatically require changes in the managerial and behavioral components?

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Directions for future research & developing S/W

• e-business and SCM• ERP and SCM• The mapping bet. the existing

logistics system and the ideal SCM

• SCP (SCM Planning)• SCS (supply chain simulator)

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Costs

Assets

CustomerService

Strategic and Financial Impact

SCP is a major component of supply chain improvements.

– In-stock availability – Lead time– Ability to tailor to specific

customer needs

– Fixed– Purchase Cost– Variable Manufacturing– Trans/Distribution– Obsolescence/Markdown– Administrative/Transaction

– Manufacturing– Distribution Centers– Inventory

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Supply Chain Requirements

• New product introductions/innovations

• Cycle time/response time reduction

• Strategic relationships

• Cost effective replenishment and fulfillment

• Customer specific and channel specific service and value delivery

• Dynamic end-to-end decision support

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Advantages of SCM Planning

• Simultaneous material and capacity planning

• Decision support with what-if

• Consider real-world constraints

• Optimizes plan in concert with business goals

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Expected Benefits of SCM Planning

• Improved delivery performance• Decrease in order cycle times• Increase in order fill rates• Reduced planning times• Reduced response times• Improved asset utilization• Inventory reduction• Dynamic profitability determination

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Retail

DistributionCenterManufacturing

Units

Suppliers

Key Processes - Sales and Demand Planning

• Statistical Forecasting• Collaborative

Forecasting• Sales Planning• Life Cycle Planning• Promotion Planning

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$ $$

ManufacturingUnits

Key Processes - Operations Planning

• Long range Planning• Simultaneous materi

al and capacity planning

• Constrained master production scheduling

• Product cost planning

52S u p p l i e r s

C u s t o m e r s

D i s t r i b u t i o n C e n t e r s

M a n u f a c t u r I n g U n i t s

Key Processes - Distribution Planning

• Supply and Distribution Network Planning

• Supply Network Planning and Optimization

• Supply/Demand balancing

• Vendor Managed Inventory (VMI)

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Customer

Key Processes - Production Scheduling

• Interactive shop floor scheduling

• Rate-based scheduling• Flow sequencing and s

cheduling• Line balancing

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Key Processes - Order Fulfillment

• Available to promise (ATP)– Global– Local– Rules-based

• Product Allocation• Material Substitution• Vendor Managed

Inventory

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Supply Chain Simulator

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Supply Chain Simulation Experiments

Financial Impact

Performance Baseline

Performance Impact

Opportunity Assessment

Model

Generic Model For Specific

Industry

Current Performance and

Capabilities Model

Opportunity Estimating

Model

Supply Chain Analysis Logic

Source: Joint Industry Project on ECR. 1994. Performance Measures

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Output 1 Output 2

Output N

Simulation Paradigm

Input 1 Input 2

Input M

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Cycle times Serviceability Shipments and

revenue Turns Costs

– Inventory– Material

handling– Transportatio

n– Manufacturing

Supply Chain Simulation Number and location of

suppliers, manufacturers, DC's

Inventory levels at each site

Manufacturing and replenishment policies:

BTP, BTO, Partial BTO, Continuous, Periodic

Transportation policies Supply planning policies Lead times Supplier reliability Demand variability

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Benefits of Supply Chain Simulation

Quantification of supply chain issues before solution implementation

Nonlinear analysis of supply chain issues Stochastic problems can be addressed General-purpose across supply chain domains

End-to-end analysis

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Supply Chain Simulation Is ...

End-To-End Strategic High Level

differs from typical business process modeling

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Simulation EngineModel DataUser InterfaceReport Generator

InventoryOptimizer

Supply Chain Simulator

Simulation and Optimization Working Together

Supply PlanningOptimizer

FinancialReports

Relational data files

Brid

ge

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結論 A Goal Setting for SCM Suitable to a Scale /

Circumstances, Approach and Level of the Company in Advance.

Not to Disappear while Speaking Prosperous for SCM as the other Different Solutions.

• Rather then Indiscreet Import Foreign S/W, Research and Develop S/W Suitable to Korea Actual Circumstances.

Documents

SCM: 供應鏈子管理 Introduction and Its Technology