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SupplyChainManagementYuhuaZhangProfessorofGuangdongUniversityofForeignStudiesTeleferencesDesigningandManagingtheSupplyChain,DavidSimchi-Levietal,McGrawHill,2011.SupplyChainManagement,MaShihua,HigherEducationPress,2011.SupplyChainManagement:Strategy,Planning,andOperation,SunilChopraetal,PrenticeHall,2011.SupplyChainManagementfromVisiontoImplementation,StanleyE.Fawcettetal,PrenticeHall,2007.EvaluationMode

Checkonclassattendance:20%Casestudy20%Classassignment20%FinalTest:40%Chapter1IntroductiontoSupplyChainManagementChapter2InventoryManagement,SupplyContractsandRiskPoolingChapter3LogisticsNetworkConfigurationChapter4TheValueofInformationChapter5SupplyChainIntegration,StrategicAlliancesChapter6ProcurementandOutsourcing,InternationalIssuesinSCMChapter7DesignforSupplyChainManagementChapter8PricingandCustomerValueChapter1IntroductiontoSupplyChainManagement©CopyrightMeditechSurgicalCasedescribesascenariowithtypicalsymptoms–inventoriesaretoohighandcustomerserviceispoor.Initialexplanationisthattheproblemsareduetopoorforecastingofcustomerdemand.There’saperceptionthatdemandishighlyvariableandunpredictable,possiblyduetoirrationalcustomerbehavior,e.g.,panicordering.…ifonlyMeditechcouldforecastwhatthecustomerswillorder,thentheycouldimprovecustomerserviceandreduceinventories….Case1©CopyrightOutlineIntent

–diagnosisofsupplychainBusinessoverviewSupplychainProductionplanningWhat’swrong?Howtofixit?Case1©CopyrightEndoscopicSurgicalInstrumentsPermitsminimallyinvasivesurgeryMarketcreatedinearly80’s,rapidlygrowingOldproductscontinuallyupdatedandreplacedwithnewproductintroductionsCase1©CopyrightBusinessOverviewNationalandMeditechsplitthemarketCompetebasedonproductinnovations,customerservice,costNationalsellstophysicians;MeditechsellstomaterialmanagersCustomerpreferenceschangeslowlyCase1ExternalSupplyChainPartsuppliersMeditechAssemblyplantsMeditechWarehouse:autonomousregionalwarehousesDomesticDealersInt’lMeditechAffiliatesHospitalsHospitalsCase1InternalSupplyChainPartsInventoryAssemblyBulkInventoryFGInventoryPackaging&Sterilization2-16weeks2weeks1weekCase1Assemblyorganizedintomultipleflexiblelines,manual.PackagingandsterilizationhaveadequatecapacityProductionPlanningAnnualForecastMonthlyRevisionTransferRequirementsMonthlyPlanMRPPartsProcurementPlanWeeklyAssemblyScheduleCase1AnnualforecastdeterminedbymarketingandfinanceRevisiondoneatbeginningofmonthbymarketingandcentralplanningTransferrequirements=forecast–FGinventory+safetystock(3weeksofdemand),donebycentralplanningMonthlyplansenttobusinessunits,whoinputitintoMRPtogetmaterialplansandassemblyschedulesProductionPlanningPartsInventoryAssemblyBulkInventoryPackaging&SterilizationFGinventoryMonthlyPlanMRPOrderpoint;OrderquantityMaterialPlanfocusingoninformationflows©CopyrightWhat’swrong?PoorservicefornewproductintroductionsPoorforecasting?Panicordering?AndhighFGinventoryCase1©CopyrightWhatisgoingon?DemandisquitepredictableUsageinhospitalsisquitestableMarketsharemovesslowlyovertimeWitheachnewproduct,dealermustbuildinventorytofillpipelineCase1©CopyrightWhydidMeditechthinkdemandwasunpredictable?PoorinformationsystemsNoonelookedatdemandNoonehadresponsibilityforforecasterrorsTendencytoshifttheblameBuilt-indelaysandmonthlybucketsinplanningsystemAmplifierinplanningsystemCase1©CopyrightWhattodo?RecognizethatdemandisstableandpredictableEstablishaccountabilityforforecastEliminateplanningdelaysand/orreducetimebucketAlternatively,putassemblywithinpullsystemandeliminatebulkinventoryCase1©CopyrightWrapUpCaseillustratesasupplychainchallenge–understandwhyMeditechhaspoorcustomerserviceandhighinventory,particularfornewproducts.Contextischaracterizedbylackofdataandasomewhatarchaic,albeittypical,planningsystemthatobscurestheproblem.Case1©CopyrightWhatIsASupplyChain?SCMArchitectureStrategiesforSCMWhySupplyChainManagement?KeyIssuesOutline©Copyright1.1WhatIsASupplyChain?Thesystemofsuppliers,manufacturers,transportation,distributors,andvendorsthatexiststotransformrawmaterialstofinalproductsandsupplythoseproductstocustomers.SupplierManufacturerDistributorRetailerCustomerUpstreamDownstreamWhatisSCM?BuyingWhatisSCM?SellingMakingMovingWarehousingSCMisabusinessnetworkcoveringfrombuying,making,moving,warehousingtosellingSCM©CopyrightWhatIstheGoalofSupplyChainManagement?Supplychainmanagementisconcernedwiththeefficientintegrationofsuppliers,factories,warehousesandstoressothatmerchandiseisproducedanddistributed:IntherightquantitiesTotherightlocationsAttherighttimeInordertoMinimizetotalsystemcostSatisfycustomerservicerequirementsTherightProductHigherProfitsTherightTimeTherightCustomerTherightQuantityTherightStoreTherightPrice=+++++©CopyrightThepowerandthepotentialimpactofsupplychainmanagementtomakeorganizationsmoregloballycompetitiveandtoincreasemarketsharewithconsequentimprovementinshare-holdervalue.SupplyChainmanagementConcept©CopyrightDevelopmentoftheConceptAnumberofstudiesdoneduringthe1950sand1960sindicatedthepotentialofthesystemsconceptifitwereappliedinbusiness-relatedsituations.Thefocusofphysicaldistributionmanagementwasonthesystemcostsandanalyzingtrade-offscenariostoarriveatthebestorlowestphysicaldistributionsystemcost.Thesystemrelationshipsthatexistamongtransportation,inventorylevels,warehousing,exteriorpackaging,materialshandling,andcustomerservicecostcenterswereanalyzedandevaluated.Theinitialfocusonphysicaldistributionoroutboundlogisticswaslogicalsincefinishedgoodswereusuallyhigherinvalue,whichmeantthattheirinventory,warehousing,materialshandling,andpackagingcostswererelativelyhigherthanforinboundrawmaterials.©CopyrightDevelopmentoftheConceptThe1980swereadecadeofchangewiththederegulationoftransportation,financialinstitution,andthecommunicationindustry.Thetechnologyrevolutionwasalsowellunderway.Duringthe1980s,thebusinesslogisticsorintegratedlogisticsmanagementconceptdevelopedinagrowingnumberoforganizations.Logisticsinitssimplestformaddedtheinboundsidetooutboundlogisticsofphysicaldistributionmanagement.Theunderlyinglogicofthesystemsconceptwasalsotherationaleforthedevelopmentofthelogisticsmanagementconcept,becauseinadditiontoanalyzingtrade-offsfortotalcostitcouldalsoincludethevalueordemandaspectsofcustomerserviceeffectiveness.©CopyrightDevelopmentoftheConceptAfter1990s,supplychainmanagementcanbeviewedasapipelineorconduitfortheefficientandeffectiveflowofproductsandmaterials,services,information,andfinancials(usuallycash)fromthesupplier’ssupplierthroughthevariousimmediateorganizationsouttothecustomer’scustomer.Itisasystemofconnectednetworksbetweentheoriginalvendorandtheultimatefinalcustomer.Theextendedenterpriseorboundaryspanningperspectiveofsupplychainmanagementrepresentsalogicalextensionofthelogisticsconcept,providinganopportunitytoviewtototalsystemofinterrelatedcompaniesandtheirimpactforthefinalproductinthemarketplaceintermsofitsprice-valuerelationship.©CopyrightImportantPointsExtendedenterpriseCoordinatedorintegratedtwo-wayflowofgoodsReverselogisticssystemsInformationBullwhipeffectAdvancedshipmentnoticesFinancials(especiallycash)“Free”cashflowSupplyChainStatusTIER2TIER1SupplierSupplierSupplierOEMManualcommunication(Phone/Fax/EDI)SpontaneousplanningHypotheticalplanningTierToTierEnormousinventorybufferSupplyChainStatusProspectofsupplychainFax/E-mailEDIOn-line78%65%28%60%60%88%20002002ForresterResearch,2000TIER3Yetexistingsupplychainismanagedmanually,causingseriouslossofefficiencyandcostSCMBackgroundofSCManditseffectBackgroundEmergingnewchannelSeverecompetitionSpeedmanagementInternetboomingEffectsShorterproductlifecycleChannelintegrationSpeedyadaptiontochangesupplychainEnhancedcustomersatisfactionSupplychainintegrationthruwebProductlifecyclemanagement“Competitionamongsupplychainsnotamongcompanies”ThechangeintheindustrialenvironmentdemandsthebusinesstoadopttoSCManditcanbringthefollowingeffectsStandardizationofproductandtechSCMComponentsofSCMSupplyChainPlanningSupplyChainExecutionCollaborativePlanningSupplyChainNetworkDesignDemandPlanning&ForecastingSupplyPlanningDistributionPlanningManufacturingPlanning&SchedulingWarehouseManagementTransportationManagementInventoryManagementOrderManagementFacilitatingcollaborationamongparticipantsDesignCollaborationDemandCollaborationProcurementCollaborationRetailerCollaborationDeliverthe

RightProductatthe

RightPlaceatthe

RightTimeSCMisdevidedbySCPtoofferoptimizedplanning,SCEtostableexecutionplatform,CPtocollaborateOptimizedplanningforbalancedsupplyforvarieddemandsTimelyexecutionforbuying,moving,makingandorderingSCM©CopyrightRecentSupplyChainStudiesSuggest….“Only7%ofcompaniestodayareeffectivelymanagingtheirsupplychain.However,thesecompaniesare73%moreprofitablethanothermanufacturers.……”Deloitte&ToucheStudy,October2003““©CopyrightNoticeWhoisinvolved?Whatisthegoal?Whatlevelofactivitiesareinvolved?Whatdowemeanbyintegration?2SCMArchitectureSCMSupplySources:plantsvendorsportsRegionalWarehouses:stockingpointsFieldWarehouses:stockingpointsCustomers,demandcenterssinksProduction/purchasecostsInventory&warehousingcostsTransportationcostsInventory&warehousingcostsTransportationcosts©Copyright2004D.Simchi-LeviWhatmakessupplychainmanagementdifficult?Supplychainstrategiescannotbedeterminedinisolation.Theyaredirectlyaffectedbyanotherchainthatmostorganizationshave,thedevelopmentchain.Itischallengingtodesignandoperateasupplychainsothattotalsystemwidecostsareminimized,andsystemwideservicelevelsaremaintained.Uncertaintyandriskareinherentineverysupplychain.©Copyright2004D.Simchi-LeviThedevelopmentchainThedevelopmentchainisthesetofactivitiesandprocessesassociatedwithnewproductintroduction.©Copyright1.3StrategiesforSCMAlloftheadvancedstrategies,techniques,andapproachesforSupplyChainManagementfocuson:GlobalOptimizationManagingUncertainty©Copyright1.3.1GlobalOptimizationWhatisit?Whyisitdifferent/betterthanlocaloptimization?Whatareconflictingsupplychainobjectives?Whattoolsandapproacheshelpwithglobaloptimization?ProcurementPlanningManufacturingPlanningDistributionPlanningDemandPlanningSequentialOptimizationSupplyContracts/Collaboration/InformationSystemsandDSSProcurementPlanningManufacturingPlanningDistributionPlanningDemandPlanningGlobalOptimizationSequentialOptimizationvs.GlobalOptimizationSource:DuncanMcFarlane©CopyrightGlobalOptimizationTheprocessoffindingthebestsystemwidestrategyisknownasglobaloptimization.©CopyrightWhyisGlobalOptimizationHard?ThesupplychainisacomplexnetworkDifferentfacilitiesinthesupplychainfrequentlyhavedifferent,conflictingobjectivesThesupplychainisadynamicsystemThepowerstructurechangesSystemvariationsovertime©CopyrightSupplyChain:TheComplexityNationalSemiconductors:Production:Produceschipsinsixdifferentlocations:fourintheUS,oneinBritainandoneinIsraelChipsareshippedtosevenassemblylocationsinSoutheastAsia.DistributionThefinalproductisshippedtohundredsoffacilitiesallovertheworld20,000differentroutes12differentairlinesareinvolved95%oftheproductsaredeliveredwithin45days5%aredeliveredwithin90days.©CopyrightConflictingObjectives

intheSupplyChain1.Purchasing•Stablevolumerequirements•Flexibledeliverytime•Littlevariation•Largequantities2.Manufacturing•Longrunproduction•Highquality•Highproductivity•Lowproductioncost©CopyrightConflictingObjectives

intheSupplyChain3.Warehousing•Lowinventory•Reducedtransportationcosts•Quickreplenishmentcapability4.Customers•Shortorderleadtime•Highinstock•Enormousvarietyofproducts•Lowprices©CopyrightToolsandApproachesforGlobalOptimizationEverythingforoptimization,plus…StrategicAlliances/SupplierPartnershipsSupplyContracts/IncentiveSchemes©CopyrightToolsandStrategiesforOptimizationDecisionSupportSystemsInventoryControlNetworkDesignDesignforLogisticsCrossDockingCrossDocking翻译为“直接换装”,定义为:“物品在物流环环节中,不经经过中间仓仓库或者站点点,直接从一一个交通工具具换载到另一一个运输工具具的物流衔接接方式。”©CopyrightWhatisvariation?Whatisrandomness?Whattoolsandapproacheshelpustodealwiththeseissues?©CopyrightCan’tForecastingHelp?ForecastingisalwayswrongThelongertheforecasthorizontheworsetheforecastEnditemforecastsareevenmorewrong©CopyrightWhyIsUncertaintyHardtoDealWith?Matchingsupplyanddemandisamajorchallenge.Forecastingdoesn’tsolvetheproblem.Inventoryandback-orderlevelstypicallyfluctuateconsiderablyacrossthesupplychain,evenwhencustomerdemandforspecificproductsdoesnotvarygreatly.Demandisnottheonlysourceofuncertainty:LeadtimesYieldsTransportationtimesNaturalDisastersComponentAvailabilityRecenttrendssuchasleanmanufacturing,outsourcing,andoffshoringthatfocusonreductionincreaseriskssignificantly.©CopyrightSupplyChainVariabilityVolumesTimeSource:TomMcGuffry,ElectronicCommerceandValueChainManagement,1998ActualConsumerDemandRetailerWarehousetoShopRetailerOrdersProductionPlanManufacturerForecastofSales©CopyrightWhatManagementGets...VolumesTimeSource:TomMcGuffry,ElectronicCommerceandValueChainManagement,1998ConsumerDemandProductionPlan©CopyrightWhatManagementWants…VolumesTimeSource:TomMcGuffry,ElectronicCommerceandValueChainManagement,1998ConsumerDemandProductionPlan©CopyrightDealingwithUncertaintyPullSystemsRiskPoolingCentralizationPostponementStrategicAlliancesCollaborativeForecasting©Copyright1.4WhySupplyChainManagement?©CopyrightSupplyChain:theMagnitudeIn1998,Americancompaniesspent$898billioninsupply-relatedactivities(or10.6%ofgrossdomesticproduct).Transportation58%Inventory38%Management4%Thirdpartylogisticsservicesgrewin1998by15%tonearly$40billion©CopyrightSupplyChain:theMagnitudeItisestimatedthatthegroceryindustrycouldsave$30billion(10%ofoperatingcost)byusingeffectivelogisticsstrategies.Atypicalboxofcerealspendsmorethanthreemonthsgettingfromfactorytosupermarket.Atypicalnewcarspends15daystravelingfromthefa

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