* What is a supply chain?
The interconnected businesses that convert raw materials into consumer products via the transfer of materials, information and cash. * Draw a hypothetical milk supply chain
* What is supply chain management?
The management of upstream and downstream suppliers working together to create high value products for consumers as efficiently as possible to the benefit of the whole supply chain. It operates on three different levels, Strategic, Tactical an Operational. At a strategic level, the decisions are made regarding long term objectives, company direction and distribution of resources, at a tactical level this revolves around functional decisions, production decisions and short-term forecasting. The operational level of SC management deals with the day to day supply chain functions like inventory management and procurement. * How is supply chain management like a rowing eight?
Like a rowing 8, supply chain management requires all members to give up their own goals and work together in unison for the common good. Timing is critical, and improved with practice. Members are reliant on each other, one person (cox/supply chain manager) keeps the team on task. Communication is vital. All members have similar strengths, and they know each oters weaknesses. To get the best from the whole team, they need to collaborate. * What's wrong with the term ‘supply chain’?
The term is misleading, it suggests a supply chain is linear, when in fact it is a network of inter connected businesses intersecting from various direction. * Why is the term ‘supply chain’ misleading?
Not every business ‘supplies’ some businesses transform, it is a complex network, not a linear process, the focus of the phrase is on SUPPLY when really, it is a DEMAND driven network * What would be a more appropriate term for a ‘supply chain’? Demand Chain?
* How is SCM like a chain
weakest link | links | start and end | Value is an emergent property| without the links, it’s just a pile of scrap, but in many ways it is unlike a chain; not all links same size, not linear, in a SC the links can choose who to partner with. The power of the more than one. * State two of Dell’s value advantages
Bespoke configuration, each machine is configured exactly to customers specification, although the company has the option to steer customers toward specific available configurations when excess stock exists Co location is another Value advantage, Dell has chosen to work with suppliers that are in close proximity to its manufacturing plants, this ensures compressed lead times for customers, typically PC is in dispatch within 36hrs of order. * State two of Dell’s productivity advantages
Dell have streamlined the number of suppliers, and have benefited from some efficiencies of cash flow, Dell is paid for the PC upon order, orders parts from suppliers and pays the supplier 45 days later. Another productivity advantage comes from co-location, they have managed to compress delivery times of parts by ensurng suppliers re located in close proximity to their own manufacturing plants. * Place Dell on Christopher's 2 by 2 matrix
* Justify the location you selected on the matrix
Dell have extremely high productivity advantages, this is evidenced by their time compression techniques, not only within their own business, but also along the supply chain. They have a fast inventory turnover, holding no more than 11 days, and retain their cashflow for longer by receiving payment upfront from purchaser but paying suppliers 45 days later. We also see evidence of Value advantages for Dell, again through co-location and made to order bespoke products, they can ship what the customer wants fast, a clear competitive advantage. * Would you buy an Ikea wardrobe (explain your answer)?
* Use each of the customer value equations to discuss the Ikea case Perception of benefits...