Presented by:

S.M.TABATABAEE NASAB

Supply

Chain

flow

The supply chain- 1

The global environment- 2Inter – corporate coordination -

15Inte

r- fun

ction

al

Coord

inatio

n- 1

4

Marketing - 4

Sales -5

R&D - 6

Forecasting - 7

Production - 8

Purchasing - 9

Logistics - 10

Information systems-11

Finance -12

Customer Service - 13

Products

Services

Information

Financial resource

s

Demand

forecasts

Customer satisfaction

Value

Profitability

Differential advantage

-3

A model of supply chain management

INTRODUCTIONForrester(1985) introduced a theory of

management that recognized the integrated nature of organizational relationships in distribution channels.

He argued that system dynamics can influence the performance of functions such as research, ingineering , sales & promotion.

The reasons for popularity of SCMGlobal sourcingCompetition on the basis of time & qualityThis global orientation & increased

performance –based competition combined with rapidly changing technology and economic conditions all contribute to marketplace uncertainty.

Confusion in SCM definitionSome authors define SCM in operational terms

involving the flow of materials & products. (tyndall, gopal, partsch,

kamauff, 1998)Others view it as a management philosophy. (ellram &

cooper, 1990)some view it as a management process. (la

londe, 1997)

Defining the supply chain La londe & masters(1994) proposed that a

supply chain is a set of firms that pass materials forward.

Lambert, Stock & Ellram (1998) define a supply chain as the alignment of firms that brings products or services to market.

Christopher(1992) defines a supply chain as the network of organizations that are involved, through upstream & downstream linkages, in the different processes and activities that produce value in the form of products & services in the hands of the ultimate consumer.

Supply chain definitionA set of three or more companies directly

linked by one or more of the upstream & downstream flows of products, services , finances, and information from a source to a customer.

Basic Supply ChainConsists of a company, an immediate

supplier, and an immediate customer directly linked by one or more of the upstream & downstream flows of products, services , finances, and information.

extended Supply ChainIncludes suppliers of the immediate supplier,

and customers of the immediate customer , all linked by one or more of the upstream & downstream flows of products, services , finances, and information.

ultimate Supply ChainIncludes all the companies involved in all the

upstream & downstream flows of products, services , finances, and information from the initial supplier to the ultimate customer.

Real competition is not company against

company, but rather supply chain against

supply chain.Christopher (1992)

Supply Chain ManagementSCM deals with the total flow of a materials

from suppliers through end users. Jones &

riley(1985)

Supply Chain ManagementThe objective of managing the supply chain is

to synchronize the requirements of the customer with the flow of materials from suppliers in order to effect a balance between what are often seen as conflicting goals of high customer service, low inventory management, and low unit cost.

Stevens(1989)

Supply Chain ManagementReferring to Stevens(1989) , Jones &

riley(1985) , houlihan (1985,1988), Ellram & Cooper(1990) SCM define as:

an integrative philosophy to manage the total flow of a distribution channel from

supplier to the ultimate user.

SCM as a management philosophyAs a philosophy, SCM takes a systems approach

to viewing channel as a single entity, rather than as a fragmented parts.

(ellram & cooper,1990)

SCM as a philosophy of channel management seeks synchronization and convergence of intrafirm and interfirm operational & strategic capabilities into unified , compelling marketplace force.

(ross,1998)

SCM activities (to implement a management philosophy)

Integrated behaviorMutually sharing informationMutually sharing channel risks & rewardsCooperationThe same goal and the same focus of serving

customersIntegration of processesPartners to build & maintain long0term

relationships

SCM versus SCO

SCM is the implementation of a SCO across supplier and customer.

SCO is a management philosophy & SCM is the total management action undertaken to realize that philosophy

SCO-Systemic view-Strategic view

scm - 3 or mor firms

with sco- sharing information-sharing channel risks & rewards-Cooperation-The same goal and the same focus of serving customers-Integration of processes-long0term relationships- coordination

Consequences

•Improved customer value &

satisfaction

•Profitability

•Differential

advantage

Single company antecedentsWillingness to

adress:•Trust

•Commitment•Interdependence

•Vision•Key process

•LeaderTop management

support

Drivers for globalization

of firms-Access to

market-Access to raw

materials-Economies of scope & scale

-Access to technology

Global environmental

factors- Uncertainty- complexity- Asymmetry

Drivers for economic globalization-Decreasing tariffs-Economic regionalism-Improving transportation , communications & IT-Globalization of products and services- global competition

Global diversity- Political- Cultural

- Economic

Global strategic thrust

-Local responsiveness- global efficiency- transfer of knowledge & competencies

Approach to globalization-Multinational

firms-International

firms-Global firms

-transnational

Factors influencing the globalization of firms

unitMultinationalStrategic thrustLocal responsiveness

Configuration of assets & capabilities

Decentralized & nationally self sufficient

Role of overseas operationsSensing & exploiting local opportunities

Development & diffusion of knowledge

Knowledge developed and retained within each unit

Supply chain implications

-Multiple domestic supply chains operating in different political economic and cultural contexts-Decentralized development of SCM capability - limited sharing of knowledge & resources across borders

unitinternationalStrategic thrustTransfer of knowledge & competencies

Configuration of assets & capabilities

Sources of core competencies centralized, others decentralized

Role of overseas operationsAdapting & leveraging parent company competencies

Development & diffusion of knowledge

Knowledge developed at the center & transferred

Supply chain implications

- supply chains operation across multiple borders & multiple countries- centralized development of SCMcapability- transfer of knowledge from corporate headquarter to other countries

unitglobalStrategic thrustGlobal efficiency

Configuration of assets & capabilities

Centralized & globally scaled

Role of overseas operationsimplementing parent company strategies

Development & diffusion of knowledge

Knowledge developed & retained at the center

Supply chain implications

- integrated management of a global network of supply & demand- SCM aimed at efficiency & operating flexibility- Centralized development of SCM capability- SCM processes & policies dictated by corporate headquarters

unitglobal

Strategic thrust Balance of Local responsiveness,Global efficiency &

Transfer of knowledge & competencies

Configuration of assets & capabilities

Dispersed, interdependent, and specialized

Role of overseas operationsDifferentiated contributions by national units to

integrated world wide operationsDevelopment & diffusion of

knowledgeKnowledge developed jointly & shared worldwide

Supply chain implications

- supply chain network itegrated to achieve economies of scale but locally responsive to different markets- skill & capabilities developed & shared worldwide-Joint decision making, with appropriate global/local balancing

Approach to

globalization

-Multinational firms

-International firms

-Global firms-transnational

Global diversity- Political- Cultural

- Economic

Global environmental factors

- Uncertainty- complexity- Asymmetry

Corporate supply chain strategy

-multiple domestic supply chains-multiple international supply chains- global network & supply & demand- flexible ,interdependent ,balance of locally responsive & globally efficient supply chains

Supply chain process-Strategic fit-Risk management-Knowledge management- relationship management- financial management-Development of organizational capability-Technology management-Channel management/outsourcing decisions- information management

Factors influencing global supply chain management

Q&A