全英文课《DesigningandManagingSupplyChainSystem》授课教案Chapter 1(Lecture 1) Introduction to supply chain managementOBJECTIVESstudent should understand the following issues:(1) the main of SC and SCM(2) the difference and correlation between SCM and LM(3) The challenges in SCM(4)Thecritical aspects of SCMTEACHINGCONTENT1.1 SCThrough the cases of tea SC and bicycle SC, it can be found that supply chain is anintegrated network of resources and processes, or logistics network, that is responsible forthe acquisition of raw materials, the transformation of these materials into intermediate andfinished products, and the distribution of the finished products to the final customers.The key points in a supply chain:1)Flows of products and services from/between raw materials manufacturers/suppliersintermediateproducts manufacturers、end product manufacturers andwholesalers and distributors and retailers,2)Connected by transportation and storage activities,3) Integrated through information, planning, and integration activities .1.2 SCM1.2.1 Definition of SCMThere are a lot kinds of definition for SCM.Students should know the definition ofSCM by CSCMP that SCM encompasses the planning and management of all.activitiesinvolvedinsourcingandprocurement,conversion,andallLogisticsManagementactivities.Importantly, it also includes coordination and collaboration with channel partners, which canbe suppliers, intermediaries, third-party service providers, and customers.In essence, SCM integrates supply and demand management within and acrosscompanies. It includes all of the logistics management activities and manufacturingoperations, and it drives coordination of processes and activities across marketing, salesproduct design, finance, and information technology.1.2.2 Activities in SCMThe activities in SCM can be divided into three level. First is strategic activitiesincluding network design, transportation strategy,coordination and so on;the next is tacticalactivities including sourcing,suppliersmanagement,replenishmentplanningandinventoryplanning,the thirdis operational activitiesincludingtransportationmanagementwarehousingmanagement,inventorymanagementandordermanagement
全英文课《Designing and Managin1g Supply Chain System》 授课教案 Chapter 1(Lecture 1) Introduction to supply chain management OBJECTIVES student should understand the following issues： (1) the main of SC and SCM (2) the difference and correlation between SCM and LM (3) The challenges in SCM (4) The critical aspects of SCM TEACHING CONTENT 1.1 SC Through the cases of tea SC and bicycle SC, it can be found that supply chain is an integrated network of resources and processes, or logistics network, that is responsible for the acquisition of raw materials, the transformation of these materials into intermediate and finished products, and the distribution of the finished products to the final customers. The key points in a supply chain: 1) Flows of products and services from/between raw materials manufacturers /suppliers 、 intermediate products manufacturers 、 end product manufacturers and wholesalers and distributors and retailers; 2) Connected by transportation and storage activities; 3) Integrated through information, planning, and integration activities . 1.2 SCM 1.2.1 Definition of SCM There are a lot kinds of definition for SCM.Students should know the definition of SCM by CSCMP that SCM encompasses the planning and management of all.activities involved in sourcing and procurement, conversion,and all Logistics Management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, SCM integrates supply and demand management within and across companies. It includes all of the logistics management activities and manufacturing operations, and it drives coordination of processes and activities across marketing, sales, product design, finance, and information technology. 1.2.2 Activities in SCM The activities in SCM can be divided into three level. First is strategic activities including network design, transportation strategy, coordination and so on;the next is tactical activities including sourcing, suppliers management,replenishment planning and inventory planning;the third is operational activities including transportation management, warehousing management, inventory management and order management
全英文课《DesigningandManagingSupplyChainSystem》授课教案Throughout these activities, students could find the outcomes or consequences ofSupply Chain Management:1)Improvedcustomervalueandsatisfaction2)Profitability(lowercostsand/orincreasedrevenues)3)Differentialadvantage(potentiallysustainable)1.3 The differences and connections between SCM and LMFirstly,students shouldknowwhat'smeansoflogisticsandLM.TheCSCMPdefinesthat the logistics is the a process of planning, implementing, and controlling procedures fortheefficientand effectivetransportationand storageofgoodsincludingservices,andrelatedinformationfromthepointoforigin to thepointof consumptionforthepurposeofconforming to customer requirements. This definition includes inbound, outbound, internal,and external movements,And LM is that part of sCM that plans,implements, and controlsthe efficient, effective forward and reverse flow and storage of goods,services and relatedinformation between the point of origin and the point of consumption in order to meetcustomers'requirements.Comparing between SCM and LM, it could be found :1) SC is a network consisting firms collaborating to improve operating efficiency;2) Logistics is the process required to move and geographically position inventory, andisasubsetoftheframeworkofSCM3) Supply chain strategy establishes a operating framework within which logistics isperformed (Figure 1).DemandforecastingPurchasing19852000Requirements planningMaterialProduction planningManagementManufacturing inventoryWarehousingLogisticsMaterials handlingIndustrial packagingFinishedgoods inventoryPhysicalDistribution planningDistributionOrderprocessingSupplyChainManagementTransportationCustomer serviceStrategic planningInformation technology..Marketing...Sales.FigureITheEvolutionofLogistics/SupplyChainManagement1.4 The challenges in SCMAlthoughwewilldiscussavarietyofreasonsthroughoutthistext,they canallberelated to some of the following observations: 1)It is challenging to design and operate a
全英文课《Designing and Managin2g Supply Chain System》 授课教案 Throughout these activities, students could find the outcomes or consequences of Supply Chain Management: 1) Improved customer value and satisfaction 2) Profitability (lower costs and/or increased revenues) 3) Differential advantage (potentially sustainable) 1.3 The differences and connections between SCM and LM Firstly, students should know what’s means of logistics and LM.The CSCMP defines that the logistics is the a process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements;And LM is that part of SCM that plans,implements, and controls the efficient, effective forward and reverse flow and storage of goods,services and related information between the point of origin and the point of consumption in order to meet customers’ requirements. Comparing between SCM and LM, it could be found : 1) SC is a network consisting firms collaborating to improve operating efficiency; 2) Logistics is the process required to move and geographically position inventory, and is a subset of the framework of SCM. 3) Supply chain strategy establishes a operating framework within which logistics is performed (Figure 1). Figure 1The Evolution of Logistics / Supply Chain Management 1.4 The challenges in SCM Although we will discuss a variety of reasons throughout this text, they can all be related to some of the following observations: 1)It is challenging to design and operate a
全英文课《DesigningandManagingSupplyChainSystem》授课教案supply chain so that total systemwide costs are minimized,and systemwide service levels aremaintained. 2)Uncertainty and risk are inherent in every supply chain. And these could beconcluded into global optimization and managing uncertainty in short.1.4.1 Global optimizationWhat makes finding the best systemwide, or globally optimal, integrated solution sodifficult? A variety of factors make this a challenging problem:1) The supply chain is a complex network of facilities dispersed over a large geographyand, in many cases, all over the globe.(learning from the case of Li&Fung);2) Different facilities in the supply chain frequently have different, conflictingobjectives;3)The supply chain is a dynamic system that evolves over time. Indeed, not only docustomerdemand and supplier capabilities change over time,but supply chain relationshipsalso evolve over time.1.4.2 SC uncertain and riskGlobal optimization is made even more difficult because supply chains need to bedesigned for, and operated in, uncertain environments, thus creating sometimes enormousrisks to the organization. A variety of factors contribute to this:1)Matching Supply and Demand is a major Challenge;REASONSEXAMPLESRawmaterial shortagesBoeing Aircraft's inventory write-downof $2.6billionInternalandsupplierpartsshortagesProductivity inefficienciesSales and earnings shortfallSales atU.S.Surgical Corporationdeclined25percent,resultinginaLargerthananticipatedinventorieslossof$22millionHigherthan expected orders forEMCCorp.missed itsrevenueguidanceof$2.66billionforthenew products overexistingproductssecondquarterof2006byaround$100million2)Inventory and back-order levels fluctuate considerably across the supply chain, evenwhen customer demand for specific products does not vary greatly,3)Forecasting is not a solution (always wrong).Indeed, we will argue that the firstprinciple of forecasting is that"forecasts are always wrong."Thus, it is impossible to predictthe precise demandfor a specific item,even with themost advanced forecasting techniques.;4)Demand is not the only source of uncertainty.Delivery lead times, manufacturingyields,transportation times, and component availability also can have significant supplychain impact,5)Recent trends such as lean manufacturing, outsourcing, and offshoring that focus oncostreductionincreaserisks significantly
全英文课《Designing and Managin3g Supply Chain System》 授课教案 supply chain so that total systemwide costs are minimized,and systemwide service levels are maintained. 2)Uncertainty and risk are inherent in every supply chain. And these could be concluded into global optimization and managing uncertainty in short. 1.4.1 Global optimization What makes finding the best systemwide, or globally optimal, integrated solution so difficult? A variety of factors make this a challenging problem: 1) The supply chain is a complex network of facilities dispersed over a large geography, and, in many cases, all over the globe.(learning from the case of Li&Fung); 2) Different facilities in the supply chain frequently have different, conflicting objectives; 3)The supply chain is a dynamic system that evolves over time. Indeed, not only do customer demand and supplier capabilities change over time, but supply chain relationships also evolve over time. 1.4.2 SC uncertain and risk Global optimization is made even more difficult because supply chains need to be designed for, and operated in, uncertain environments, thus creating sometimes enormous risks to the organization. A variety of factors contribute to this: 1)Matching Supply and Demand is a major Challenge; 2)Inventory and back-order levels fluctuate considerably across the supply chain, even when customer demand for specific products does not vary greatly; 3)Forecasting is not a solution (always wrong).Indeed, we will argue that the first principle of forecasting is that“forecasts are always wrong.” Thus, it is impossible to predict the precise demand for a specific item, even with the most advanced forecasting techniques.; 4)Demand is not the only source of uncertainty.Delivery lead times, manufacturing yields, transportation times, and component availability also can have significant supply chain impact; 5)Recent trends such as lean manufacturing, outsourcing, and offshoring that focus on cost reduction increase risks significantly
全英文课《DesigningandManagingSupplyChainSystem》授课教案1.5The critical aspects of SCMDistribution Network Configuration Consider several plants producing products toserve a set of geographically dispersed retailers. The current set of warehouses is deemedinappropriate, and management wants to reorganize or redesign the distribution network.However, how to change to minimize total production, inventory, and transportation costsandsatisfyservicelevelrequirements?ThisisacomplexoptimizationproblemforSCMInventory ControlConsider a retailer that maintains an inventoryof aparticularproduct.Sincecustomerdemand changesovertime,theretailer can useonlyhistorical datato predict demand. The retailer should decide at what point to reorder a newbatch of theproduct, and how much to order so as to minimize inventory ordering and holding costs.Production Sourcing In many industries, there is a need to carefully balancetransportation and manufacturing costs. Finding the right balance between the two costcomponents is difficult but needs to be done monthly or quarterly.Supply Contracts Relationships between suppliers and buyers are established bymeans of supply contracts that specify pricing and volume discounts,delivery lead times.quality, returns, and so forth. The question is whether supply contracts also can be used toreplace the traditional supply chain strategy with one that optimizes the entire supply chainperformance.Distribution Strategies What is the impact of each strategy on inventory levels andtransportation costs? What about the impact on service levels? And, when should products betransported by air from centralized locations to the various demand points? These questionsare important not only for a single firm determining its distribution strategy, but also forcompeting retailers that need to decide how much they can collaborate with each other.Supply Chain Integration and Strategic Partnering As observed earlier, designingand implementing a globally optimal supply chain is quite difficult because of its dynamicsand the conflicting objectives employed by different facilities and partners.However, intoday's competitive markets, most companies are forced to integrate their supply chain andengage in strategic partnering because of the pressure from both their customers and theirsupply chain partners. But how to do this is quiet a question.Outsourcing and Offshoring Strategies Rethinking your supply chain strategyinvolves not only coordinating the different activities in the supply chain, but also decidingwhattomakeinternallyandwhattobuyfromoutsidesources.HowcanafirmidentifywhichtodoorbuytoimprovetheircorecompetenceandcutdowntheircostishardProduct Design Effective design plays several critical roles in the supply chain. Mostobviously, certain product designs may increase inventory holding or transportation costsrelative to other designs, while other designs may facilitate a shorter manufacturing lead time.Unfortunately,productredesignisoftenexpensive.Information Technology and Decision-Support Systems Information technology is acritical enabler of effective supply chain management.Customer Value Customer value is the measure of a company's contribution to itscustomer,based ontheentirerangeof products,services,and intangiblesthat constitutethecompany's offerings.In recentyears,this measurehas superseded measures such as qualityand customer satisfaction. Effective supply chain management is critical if a firm wishes tofulfill customer needs and providevalue
全英文课《Designing and Managin4g Supply Chain System》 授课教案 1.5 The critical aspects of SCM Distribution Network Configuration Consider several plants producing products to serve a set of geographically dispersed retailers. The current set of warehouses is deemed inappropriate, and management wants to reorganize or redesign the distribution network. However, how to change to minimize total production, inventory, and transportation costs and satisfy service level requirements? This is a complex optimization problem for SCM. Inventory Control Consider a retailer that maintains an inventory of a particular product. Since customer demand changes over time, the retailer can use only historical data to predict demand. The retailer should decide at what point to reorder a new batch of the product, and how much to order so as to minimize inventory ordering and holding costs. Production Sourcing In many industries, there is a need to carefully balance transportation and manufacturing costs. Finding the right balance between the two cost components is difficult but needs to be done monthly or quarterly. Supply Contracts Relationships between suppliers and buyers are established by means of supply contracts that specify pricing and volume discounts,delivery lead times, quality, returns, and so forth. The question is whether supply contracts also can be used to replace the traditional supply chain strategy with one that optimizes the entire supply chain performance. Distribution Strategies What is the impact of each strategy on inventory levels and transportation costs? What about the impact on service levels? And, when should products be transported by air from centralized locations to the various demand points? These questions are important not only for a single firm determining its distribution strategy, but also for competing retailers that need to decide how much they can collaborate with each other. Supply Chain Integration and Strategic Partnering As observed earlier, designing and implementing a globally optimal supply chain is quite difficult because of its dynamics and the conflicting objectives employed by different facilities and partners.However, in today's competitive markets, most companies are forced to integrate their supply chain and engage in strategic partnering because of the pressure from both their customers and their supply chain partners. But how to do this is quiet a question. Outsourcing and Offshoring Strategies Rethinking your supply chain strategy involves not only coordinating the different activities in the supply chain, but also deciding what to make internally and what to buy from outside sources. How can a firm identify which to do or buy to improve their core competence and cut down their cost is hard. Product Design Effective design plays several critical roles in the supply chain. Most obviously, certain product designs may increase inventory holding or transportation costs relative to other designs, while other designs may facilitate a shorter manufacturing lead time. Unfortunately, product redesign is often expensive. Information Technology and Decision-Support Systems Information technology is a critical enabler of effective supply chain management. Customer Value Customer value is the measure of a company's contribution to its customer, based on the entire range of products, services, and intangibles that constitute the company's offerings. In recent years, this measure has superseded measures such as quality and customer satisfaction. Effective supply chain management is critical if a firm wishes to fulfill customer needs and provide value
全英文课《DesigningandManagingSupplyChainSystem》授课教案Smart Pricing Revenue management strategies have been applied successfully inindustries such as airlines, hotels, and rental cars. In recent years, a number of manufactures.retailers, and carriers have applied a variation of these techniques to improve supply chainperformance. In this case, the firm integrates pricing and inventory (or available capacity) toinfluence market demand and improve the bottom line.QUESTIONS:1.Consider the supply chain for a domestic automobilea. What are the components of the supply chain for the automobile?b. What are the different firms involved in the supply chain?c.Whatarethe objectives of thesefirms?d. Provide examples of conflicting objectives in this supply chaine. What are the risks that rare or unexpected events pose to this supply chain?2.Consider a consumer mortgage offered by a banka. What are the components of the supply chain for the mortgage?b. Is there more than one firm involved in the supply chain? What are the objectives of thefirm or firms?c. What are the similarities between product and service supply chains? What are thedifferences?3.Consider the supply chain for canned peaches sold by a major food processing companyWhat are the sources of uncertainty in this supply chain?Extra questions about logistics management:I) What is three flows in logistics?2) what are the difference and correlation between logistics management and supply chainmanagement?
全英文课《Designing and Managin5g Supply Chain System》 授课教案 Smart Pricing Revenue management strategies have been applied successfully in industries such as airlines, hotels, and rental cars. In recent years, a number of manufactures, retailers, and carriers have applied a variation of these techniques to improve supply chain performance. In this case, the firm integrates pricing and inventory (or available capacity) to influence market demand and improve the bottom line. QUESTIONS: 1.Consider the supply chain for a domestic automobile. a. What are the components of the supply chain for the automobile? b. What are the different firms involved in the supply chain? c. What are the objectives of these firms? d. Provide examples of conflicting objectives in this supply chain. e. What are the risks that rare or unexpected events pose to this supply chain? 2.Consider a consumer mortgage offered by a bank. a. What are the components of the supply chain for the mortgage? b. Is there more than one firm involved in the supply chain? What are the objectives of the firm or firms? c. What are the similarities between product and service supply chains? What are the differences? 3.Consider the supply chain for canned peaches sold by a major food processing company. What are the sources of uncertainty in this supply chain? Extra questions about logistics management: 1) What is three flows in logistics? 2) what are the difference and correlation between logistics management and supply chain management?