SUPPLY CHAIN MANAGEMENT

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March 2013 Canadian yoga pant manufacturer Lululemon received an enourmous amount of publicity because a supplier of the material used in their black yoga pants made a mistake and the material in one batch ended up being somewhat "see through". While the company promised to "get to the bottom" of the situation, the publicity was (as their customers say) "awesome !" and Google was innundated by people searching for "lululemon black yoga pants see-through". Apparently this was a "legit" mistake of the supplier, but............ garment industry experts say Lululemon was able to turn the publicity into a positive spin.

What is the Supply Chain?  www.supply-chain.org/Resources/faq.htm  "The supply chain -- a term now commonly used internationally -- encompasses every effort involved in producing and delivering a final product or service, from the supplier's  supplier to the customer's customer. Supply Chain Management includes managing supply and demand, sourcing raw materials and parts, manufacturing and assembly,   warehousing and inventory tracking, order entry and order management, distribution  across all channels, and delivery to the customer." Why is the supply chain important?   "In years past, manufacturers were the drivers of the supply chain -- managing the pace  at which products were manufactured and distributed. Today, customers are calling the shots, and manufacturers are scrambling to meet customer demands for  options / styles / features, quick order fulfillment, and fast delivery."

Management  Information  Systems 4th Cdn Edition Haag et al p. 38

Chpt 2 Supply Chain Management Definition "Supply Chain Management involves  planning,  implementing,  and controlling / monitoring the supply chain in order to increase effeciency." "Supply chain management controls the  movement and storage of raw materials,  work-in-progress inventory,  and finished goods from suppliers through to producers and consumers" "Supply chain management can also involve supply chain management software, which automates and manages supplier relationships and other crucial business processes."

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Supply Chain  Management an industry term !                   Supply Chain  Management an industry term !

Supply-Chain Management as explained in the FAQ of the  Center for Electronic Commerce  http://cism.bus.utexas.edu/resources/ecfaq/ecfaqc2.html Q. What is supply chain management? "A supply chain is a collection of inter-dependent steps that, when followed, accomplish a certain objective such as meeting customer requirements. Supply-chain management is a generic term that encompasses the coordination of order generation, order taking, and offer fulfillment/distribution of products, services, or information. Numerous, independent firms and customers are involved in a supply chain (e.g., manufacturers and parts suppliers; parcel shippers, senders and receivers; wholesalers and retailers). The WWW and extranets (connected intranets) have  shown a great potential in linking and managing these entities into a virtual organization." key points, as translated by witiger coordination of order generation order taking offer fulfillment distribution of products, services, or information who is involved suppliers (at three different levels) parcel shippers (documents) wholesalers - on the pull side retailers - on the pull side What might be missing from the definition above order taking and offer fulfillment can sometimes be considered "information" you also have to have some words noting the money required to make it all happen

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Definition of terms

Global Manufacturing &  Supply Chain Mgmnt "a company's supply chain encompasses the coordination of materials information and funds from the initial raw material supplier to the ultimate customer"  Daniels p. 628 this definition is OK, on a general level, but it is not complete enough for a full understanding

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Definition of terms Expanded

Supply Chain Mgmnt - expanded definition (our MGTC44 / MRK 200 / MGT C11 expanded version)  "a company's supply chain encompasses the coordination of materials time of the materials arrival location related to the production process warehousing storage packaging of the materials inbound information information about materials  dimensions and other specifics quality quantity that the right number of component parts are available price fluctuations currency exchange rate considerations and funds borrowing money from the bank to pay for  materials before they are assembled then sold labour to assemble the product from the initial raw material supplier to the ultimate customer"

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Definition of terms Expanded

Supply Chain Mgmnt - expanded definition when we say "... from the initial raw material supplier to the ultimate customer"  - the suppliers are broken down into 3 categories.  These terms are used in all types of manufacturing industries but are particularly common in the automotive and electronic consumer products industries. third tier supplier - raw materials  (eg. the polyethylene [plastic] pellets which get heated, then blowmoulded into the shape of the fan blades) (eg. the company that takes the raw copper ingots and extrudes them into copper wire, which is used to make the motor) second tier supplier - subcomponents (eg. motor in the fan assembly) first tier supplier - complete components  (eg. cooling fan assembly in a computer)

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Supply Chain Component Parts

Supply Chain Management as explained in the Schneider and Perry book,  Chapter 9 - the component parts Purchasing Activities Logistics Activities Support Activities,  Purchasing Activities include,  identifying people who will sell parts and materials to you evaluating those potential suppliers quality cost competitiveness delivery costs and time of delivery selecting particular parts and materials placing the order resolving issues that arise (ie. late shipment, parts missing, wrong colour etc.)

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Supply Chain Component Parts

Logistics Activities include,  managing the inbound movements of parts and materials outbound completed products warehousing inventory control vehicle scheduling

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Supply Chain Component Parts

Support Activities include,  HR resources ie. employee travel policies document storage finance payroll processing technology development larger firms are building some of these functions into their Intranet systems, like information to track customers who have not paid

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Supply Chain Component Parts LOGISTICS

Supply Chain Management Logistics Activities include, [added by witiger] managing the inbound movements of parts and materials outbound completed products warehousing inventory control vehicle scheduling

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Supply Chain Component Parts LOGISTICS

Supply Chain Management logistics = materials management Logistics is that 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 customer's requirements"   exploded to see more clearly what this long statement means "Logistics is that 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 customer's requirements" this quote comes from the Council of Logistics Management  The Council of Logistics Management IN 2005 CLM is now the Council of Supply Chain Management Professionals (CSCMP).  at  www.cscmp.org

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Supply Chain Component Parts LOGISTICS

Supply Chain Management An interesting rant about why logistics has not been respected as an important part of marketing.formerly posted at http://www.esg.uqam.ca/esg/crg/papers/04-99/04-99.htm   LOGISTICS: THE OTHER HALF OF MARKETING "Mainstream marketing management, also referred to as sales and promotion-based marketing, with its penchant for demand stimulation is almost entirely concerned with demand stimulation, that is creating and obtaining sales. One need only look at any current marketing management textbook to note that the vast majority of topics discussed deal mainly with what firms need to do in order to get sales. The tools used to obtain sales are promotion-based, i.e., advertising, sales promotion, personnel selling, and so forth. These are all mixed with heavy doses of consumer behavior analysis using the tools of marketing research for market and segmentation analysis as well as understanding what makes the consumer buy.  What is missing in demand stimulation is servicing demand, that is the supply side of marketing, or what Converse (1954) called the other half of marketing. Servicing demand, the other half of selling, assures that customers will get what they bought, is almost never discussed in mainstream marketing thought."

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Elements  of  Supply-Chain  Management

Chapter 18 page 634     Supply Chain Management A comprehensive supply chain should include text says 1. customer service requirements 2. plant & distribution network 3. inventory management 4. outsourcing and 3rd party logistics relationships 5. key customer and supplier relationships 6. business processes 7. IT systems 8. organizational design and training requirements 9. performance metrics 10. performance goals } } } } } } this all sounds very much like a list of  } the entire functions of a company } } } } .

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Elements  of  Supply-Chain  Management

another way of looking at the supply chain This is a book written by Kalakota and Whinston which was widely used in e-commerce courses in 1999 and 2000. You are not required to buy this book. We refer just to one part of one chapter.   Planning Systems means having the right product at the right place at the right time requires being able to obtain good "order information" from the customer POS - Point of Sale data gathered at the retail terminal is part of this Demand Forecasting (cause you can't have some products ready instantly) allows you to be more competitive in supplying things 'faster' customer demand triggers order movement up the supply chain to the raw material supplier the trend has been away from Push based systems to Pull based systems Execution Systems facilitate the physical movement of goods and services through the supply chain focus on operational efficiency entails finding new ways to streamline day2day operations reduce costs improve productivity need for cross functional integration execution systems are basically the way you do things to make sure everything done the right way ! Performance Measurement Systems keeps track of how things are going well, or poorly necessary to evaluate good and bad results in a specific way so you can make changes most often this means talking about some specific accounting or financial software package that gives performance numbers Integrating Functions in a Supply Chain the key thing about integrating is getting all the key functions to work together the key functions are Managing Information about demand Managing the flow of physical goods Managing the manufacturing process Managing the money

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Examples of Canadian companies dealing with Supply Chain challenges
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2005 Loblaw grocery stores is one of the biggest retailers in Canada. Operating in an intensely competitive market provides many challenges to Loblaw's profitability. This 2005 story on the CBC website discusses how supply chain problems effected Loblaw's profit.

2006 - Loblaws in the news announcing that they would "close six warehouses and cut 1,400 jobs as it replaced smaller distribution centers with a network of larger facilities" Question - What is the reason for Loblaw's change in strategy?  Answer - Wal-Mart Wal-Mart is the competitive giant that has forced several Canadian retailers to look at how they make changes to their supply chain in order to 1. cut costs 2. cut the time it takes from the producers to the store shelves 3. have better information about the logistical process of "what" is "where", "when" info from  http://www.supplychainer.com/50226711/loblaws_supply_chain_restructuring_is_it_a_nightmare.php

2008 Two years later, in August 2008, Loblaw's stores were in the news again as they made efforts to shorten the supply chain, and improve the competitiveness of their  offerings.

 
 

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By Marc L. Songini Computerworld, carried in www.crmbuyer.com which is part of www.ecommercetimes.com May 24th, 2005 "Supply Chains Hitting Obstacles Overseas" Songini explains "Globalization is having a hefty impact on companies' supply chain  management systems, requiring greater scalability of applications and better integration with far-flung partners...with cheap manufacturing, distribution and supplier resources available overseas -- particularly in the Far East -- even companies with established supply chain backbones are finding that they need to adapt to survive". "These global companies, facing ever-thinner profit margins, see an increasing need for centralized, accurate data, greater integration and the ability to respond nimbly to changes in demand."

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On this page there are several quotes from ecommercetimes.com. Permission was given by Richard Kern, Associate Publisher of the E-Commerce Times,  in an email to Prof. Richardson 2004 Dec 10th, a hard copy of the email is kep on file in Richardson's permissions binder.
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