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Supply Chain Management

Module 5

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Role of IT in supply chain

Information is a key supply chain driver.

Characteristics of Information in making supply chain decisions

Information must be accurate

Information must be accessible in a timely manner

Information must be of the right kind Information must be shared.

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The Supply chain macro Processes

The classification of macro supply chain are

Customer relationship management (CRM) Its a process focus on donstream interactions

Internal supply chain management (I!CM)

"ocus on internal operations

!upplier relationship management (!RM)

Its a process focus on upstream interactions

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In#$ouse or %utsource

TransactionManagement

"oundation

(TM")

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Customer Relationship Management

The CRM macro process consists of processes that take place

beteen an enterprise and customers.

&ey 'rocesses of CRM

Marketing

!ell %rder Management

Call!ervice center

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I!CM includes all processes involved in planning for fulfilling a

customer order.

'rocesses in I!CM

!trategic planning

emand 'lanning !upply 'lanning

"ulfillment

"ield !ervice

Internal Supply Chain Management

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&ey processes of !RM

esign Collaboration !ource

*egotiate

+uy

!upply Collaboration

Supplier Relationship Management

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3PL 4PL

It targets a function Targets management of entireprocess

,pl as a general manages one ormore functions not all the functions.

-pl as a general contractor homanages other ,pls truckersforarders custom brokers andothers

Third and Fourth Party Logistics providers

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Replenishment lead time

%n#Time performance !upply fle/ibility

elivery fre0uencyminimum lot si1e

!upply 0uality

Inbound transportation cost

'ricing terms

Information coordination capability

esign Collaboration

2/change rates ta/es and duties

!upplier viability

Supplier Scoring and assessment

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%nce supplier have been selected contracts are in place

and the product has been designed the buyer and suppliers

engage in procurement transactions that begin ith buyer

placing the order and end ith the buyer receiving and

paying for the order.

The Procurement Process

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irect Materials Indirect Materials

3se 'roduction Maintenance repair andsupport operations

4ccounting Cost of goods sold !564

Impact on 'roduction 4ny delay ill delay

production

7ess direct impact

'rocessing cost relative tovalue of transaction

7o $igh

*umber of transactions 7o $igh

i!!erences "et#een irect and Indirect Materials

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Product categori$ation "y value and critically

%igh

Lo#

%ighLo# &alue'Cost

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4 classic e/ample of a market ith multiple customer segments is

the airline industry here business travelers are illing to pay a

higher fare to travel a specific schedule hereas leisure travelers

are illing to shift their schedule to take advantage of loer fares.

The firm must solve the folloing to problems for pricing89hat price to charge each segment

8$o to allocate limited capacity among the segments.

Pricing ( Revenue Management !or Multiple Customers

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4 firm must use the folloing tactics effectively:

'rice based on the value assigned by each segment 3se of different prices for each segment

"orecast at the segment level

Revenue Management

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9hat is perishable;

4ny asset that loses its value over time is perishable like fruitsvegetables 6 pharmaceuticals.

2ven computers and cell phones come under perishable.

The revenue management tactics used for perishable assets are

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ynamic pricing the tactic of varying price over time is

suitable for assets such as fashion apparel that have a clear

date beyond hich they lose a lot of their value.

ynamic Pricing

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!easonal peaks of demand are common occurrence in many

supply chains.

Pricing !or seasonal demand

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Most firms face a market in hich some customers purchase

in bulk at a discount and other buy singe units or small lots at a

higher price.

Pricing !or "ul) and spot contracts

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Te*t