l7 supple network management

8/19/2019 L7 Supple Network Management

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Slack, Brandon-Jones and Johnston, Essentials of Operations Management , 1st Edition, © Slack, Brandon-Jones and Johnston, 2011

Chapter 7

Supply network management


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Design

Deliver

Direct

Develop

Operations

Management

Slack et al’ s model o operations management

!ean

s"nchronis-

ation

#lanning

and control

$apacit"

manag-

ement

S%ppl"

net&orkmanagement

'nventor"

management


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'n $hapter ( - S%ppl" net&ork management ) Slack et* al*

identi" the ollo&ing ke" +%estions*

Why should an organization take a supply network

perspective?

What is involved in managing supply networks?

What is involved in designing a supply network?

What are the types of relationships between operations in

supply networks?

What is the ‘natural’ dynamic of a supply network?

ow can supply networks be improved?

e" operations +%estions


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‘!upply chain management is the management

of the interconnection of organizations that relate

to each other through upstream and downstream

linkages between the processes that produce

value to the ultimate consumer in the form of

products and services’"

.hat is s%ppl" chain management/


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#lastic

home&areman%act%rer

Operations net&ork or a plastic home&are compan"

irst tier

s%ppliers

#ackaging

s%pplier

#lastic

stockist

irst tier

c%stomers

.holesaler

Second tier

s%ppliers

'nk

s%pplier

$ardoardcompan"

$hemical

compan"

Second tier

c%stomers

etailer

etailer

Direct s%ppl"'normation


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Operations net&ork or a shopping mall

irst tier

s%ppliers

$leaning

services

Sec%rit"

services

Maintenance

services

Shopping

mall

irst tier

c%stomers

etailers

Second tier

c%stomers

etail

c%stomers

Direct s%ppl"'normation

Second tier

s%ppliers

ecr%itment

agenc"

$leaningmaterials

s%pplier

E+%ipment

s%pplier


7/21Slack, Brandon-Jones and Johnston, Essentials of Operations Management , 1st Edition, © Slack, Brandon-Jones and Johnston, 2011

*******is concerned &ith managing the lo& o materials and inormation et&een

a string o operations, that orm the strands or 3chains4 o a s%ppl" net&ork

lo& et&een processes

lo& et&een processeslo& et&een processes

S%ppl" chain

management concerns

lo& et&een a string o

operations

S%ppl" net&ork

management concerns

lo& et&een operations

lo& et&een processes lo& et&een processes



S%ppl" chain planning and control


8/21Slack, Brandon-Jones and Johnston, Essentials of Operations Management , 1st Edition, © Slack, Brandon-Jones and Johnston, 2011

S%ppl" chains management is concerned &ith the lo&

o inormation and the lo& o prod%cts and services

• #rod%cts and services• 5e& prod%cts and services• Deliver" inormation• #a"ment re+%est 6 $redit

3Do&nstream4 lo& o prod%cts

and services or c%stomer

#ulfilment

37pstream4 lo& oc%stomer

$e%uirements

• !ong-term plans and re+%irements• Market research inormation• 'ndivid%al orders• #a"ment• #otential ne& prod%cts and services

lo& et&een

processes

$ons%mer

lo& et&een

processes

lo& et&een

processes

Operation 1 Operation 2 Operation 8


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irst tier

s%pplier

Second tier

s%pplier

irst tier

c%stomer

Second tier

c%stomer

End

c%stomer

Demand

side

S%ppl" side

#%rchasing ands%ppl"

management

#h"sical distri%tionmanagement

!ogistics

Materials management

S%ppl" chain management

'normation

lo&

#h"sical

lo&

S%ppl" chain planning and control


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90

20

:

5

#rod%ct6

serviceavailale/

(0

10

:

5

Meets priceand deliver"

re+%irements/

20

;0:

5

10

5

10

:

5

rom the operation4s perspectiveaking a c%stomer perspective o s%ppl" perormance

can lead to ver" dierent concl%sions$%stomersatisaction

9

#rod%ced aspromised/ <

1

:

5$%stomerorders/ 10

:

?0

<

1:

5

eceived

aspromised/

9

1

:

5

9

1:

5

$%stomerre+%irements

#rod%ct6service

appropriate/

100


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>he decision logic o o%tso%rcing

's activit" o

strategic

importance

E@plore keeping this activit" in-ho%se

:es :es

Does

compan"

have

specialiAedkno&ledge

5o's compan"4s

operations

perormance

s%perior/

:es

5o

's signiicant

operations

perormance

improvementlikel"/

:es

5o E@plore

o%tso%rcing

this activit"

5o


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Matching the s%ppl" chain &ith market re+%irements

5at%re o Demand

%nctional prod%cts 'nnovative prod%cts

#redictale - 7npredictale

e& changes ) Man" changes!o& variet" ) igh variet"#rice stale ) #rice markdo&ns

!ong lead-times ) Short lead-times!o& margin ) igh margins

S % p p l " $ h a i n O 1 C e c t i v e s

2 e s p o n s

i v e

E i c i e n t

! o & c o

s t - ! o &

t h r o % g h p %

t t i m e s

B i g h % t i l i A a t

i o n - ! o &

% t i l i A a t i o n

M i n i m % m i

n v e n t

o r " - D e p l o " e d i n v e n

t o r "

! o & c o s t s % p p l i e r s - 0 l e @ i 1 l e s % p p l i e

r s

Mismatch

Mismatch gile s%ppl"

chain

management

!ean s%ppl"chain

management


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Business to business (B2B)

Most common, all %t the last

link in the s%ppl" chain

E&commerce e'amples(ED' net&orksB%siness inormation

e@changes

Business to consumer (B2C)

etail operations

$atalog%e operations, etc*

E&commerce e'amples( 'nternet retailers

maAon*com, etc*

Consumer to consumer (C2B)

or ‘peer to peer (P2P)

$ons%mer 3oer4, %siness

responds

E&commerce e'amples(Some airline ticket

operators#riceline*com, etc*

S%ppl" chain relationships

>rading 3s&ap4 and a%ction

transactions

E&commerce e'amples(Specialist 3collector4 sitesEa"*com, etc*

Consumer to business (C2B)

B%siness $ons%mer >o******

B%siness

$ons%mer

rom****


14/21


“Partnership”

Supply

anagement

> h e c h

a r a c t e r o ' n t e r n

a l O p e r a t i o n s

c t i v i t "

D o

5 o t h i n g

D o

E v e r " t h i n g

' m p o r t a n t

D o

E v e r " t h

i n g

>ransactional -

Man" S%ppliers

$lose -

e& S%ppliers>"pe o 'nter-irm $ontact

irt%al

Spot>rading

!ong-term

irt%alOperation

erticall"'ntegrated

Operation

>raditional S%ppl"

Management

>"pes o s%ppl" relationship


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Short-term ailit" to s%ppl" !onger-term ailit" to s%ppl"

•ange o prod%cts or servicesprovided

•#otential or innovation

•F%alit" o prod%cts or services •Ease o doing %siness

•esponsiveness •.illingness to share risk

•

Dependailit" o s%ppl" •

!ong-term commitment to s%ppl"•Deliver" and vol%me le@iilit" • ilit" to transer kno&ledge as

&ell as prod%cts and services

•>otal cost o eing s%pplied •>echnical capailit"

• ilit" to s%ppl" in the re+%ired

+%antit"

•Operations capailit"

•inancial capailit"

•Managerial capailit"

!actors "or rating alternati#e suppliers


16/21


actor .eight S%pplier

score

S%pplier B

score$ost perormance 10 9 G9@10H90I ; G;@10H;0I

F%alit" record 10 ( G(@10H(0I < G


17/21


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18/21


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19/21


O r

d e r s

0>ime

Sales rom

store

$ons%mers

O r

d e r s

0>ime

Store4s orders to

&holesaler

>ime

.holesaler4s

orders to

man%act%rer

O r d

e r s

0

Man%act%rer4s

orders to its

s%ppliers

O r d

e r s

0>ime

etail

Store

.hole

-saler

Man%

-act%rer

S%pplier

>he %ll&hip eect


20/21


'mproved proitailit"

S%ppl" chain time compression

Sched%lechanges impact

market aster

so can

respond tomarket changes

etter

so reven%es

are ma@imiAed

so improved

orecasts

so red%cedstockholding

costs

orecastsmade closer to

demand time

so less need or

saet" stocks

Deects aredetected aster

so easier toimprove +%alit"

so red%ced

&astage costs

5e& prod%ctsand service

aster to market

so e&er lost

sales rom

dela"ed la%nch

so red%ced

risk o

osolescence

so reven%es

are ma@imiAed

so lessdisco%nted

sales

>he eects o s%ppl" chain compression


21/21


So%rce Make Deliver So%rce Make Deliver So%rce Make Deliver Deliver So%rce

#lan

#lan#lan

et%rnet%rn et%rn et%rn

ocal

compan"

$%stomer $%stomer4s

c%stomer

S%pplier4s

s%pplier S%pplier

Scope o the S$O model

>he str%ct%re o s%ppl" chains implicit in the S$O model

sho&ing the relationship et&een #lan, So%rce, Make, Deliver,

et%rn elements o the model

l7 supple network management

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