Supply Chain Management & Operations
Inhoudsopgave
MODULE 1: SUPPLY CHAIN MANAGEMENT .................................................................................................................... 3
Challenges ....................................................................................................................................................................................................... 3
MANAGING SUPPLY CHAIN COMPLEXITIES ................................................................................................................................................... 4
New product introductions ...................................................................................................................................................................... 5
Product life cycle .......................................................................................................................................................................................... 5
INTERNATIONAL CONTEXT OF SUPPLY CHAINS............................................................................................................................................ 6
European supply chain .............................................................................................................................................................................. 6
PUSH VERSUS PULL SYSTEMS ......................................................................................................................................................................... 7
THE 3 V’S OF SCM .......................................................................................................................................................................................... 7
SILO ORGANIZATION VERSUS END-TO-END SUPPLY CHAIN OPTIMIZATION............................................................................................. 8
Theory of constraints.................................................................................................................................................................................. 8
CASE STUDY ZARA............................................................................................................................................................................................ 8
MODULE 2: OPERATIONS MANAGEMENT & STRATEGY ............................................................................................. 9
DEFINITIONS ..................................................................................................................................................................................................... 9
OPERATIONS AS A SOURCE OF COMPETITIVE ADVANTAGE ...................................................................................................................... 10
From corporate strategy to operational strategy .......................................................................................................................10
OM strategies ...............................................................................................................................................................................................11
CASE STUDY VB.............................................................................................................................................................................................. 11
MODULE 3: PROCESS MANAGEMENT & ANALYSIS .................................................................................................... 12
MODULE 4 – MANAGING DEMAND IN OPERATIONS ................................................................................................. 15
Forecast ..........................................................................................................................................................................................................16
Forward Integration.................................................................................................................................................................................16
Vendor Managed Inventory (VMI) – Push system........................................................................................................................17
Outsourced or own operation ...............................................................................................................................................................18
OPERATION LEVEL ........................................................................................................................................................................................ 18
ORGANIZATION OF CUSTOMER SERVICE (CS) .......................................................................................................................................... 18
PERFORMANCE MEASUREMENT (KPIS) .................................................................................................................................................... 18
MODULE 5: MANAGING SUPPLY IN OPERATIONS ...................................................................................................... 19
INTERNAL INTEGRATION .............................................................................................................................................................................. 19
Concept and process .................................................................................................................................................................................19
Planning & Control ....................................................................................................................................................................................20
Logistics organisation ..............................................................................................................................................................................21
.......................................................................................................................................................................................................................... 22
EXTERNAL INTEGRATION.............................................................................................................................................................................. 22
Supply Chain Management (SCM) .....................................................................................................................................................23
BENEFITS OF SCM ......................................................................................................................................................................................... 23
LEAD TIME (LT) ............................................................................................................................................................................................ 23
INTEGRATION TECHNOLOGY......................................................................................................................................................................... 24
Data integration .........................................................................................................................................................................................24
CASE STUDY .................................................................................................................................................................................................... 24
,MODULE 6: QUALITY MANAGEMENT IN OPERATIONS ............................................................................................ 25
THE IMPORTANCE OF QUALITY ................................................................................................................................................................... 25
Cost of quality ..............................................................................................................................................................................................25
QUALITY MANAGEMENT ............................................................................................................................................................................... 25
Total Quality Management (TQM) .....................................................................................................................................................25
Continuous Improvement (CI) ..............................................................................................................................................................25
Improvement tools (SPC tools).............................................................................................................................................................26
- The Shingo System ("fail-safe" design): avoids defects by giving workers feedback on their errors ..........26
o SMED (single-minute exchange or die): important savings in set-up times, e.g. Formula 1 ..........................26
o Poka-yoke: using tools and resources to ensure that you can prevent those errors ..........................................26
STATISTICAL PROCESS CONTROL (SPC).................................................................................................................................................... 27
Statistics quality control (SQC) ............................................................................................................................................................27
Capability index (Cpk) ...............................................................................................................................................................................27
Acceptance sampling ................................................................................................................................................................................28
SIX SIGMA ........................................................................................................................................................................................................ 28
MODULE 7: MANAGEMENT OF CAPACITY IN OPERATIONS .................................................................................... 29
DEFINING AND MEASURING CAPACITY ...................................................................................................................................................... 29
Types of capacity ........................................................................................................................................................................................29
CAPACITY STRATEGIES ................................................................................................................................................................................. 29
Capacity buffer ............................................................................................................................................................................................29
Expansion Strategies: ...............................................................................................................................................................................29
TOOLS FOR CAPACITY PLANNING ................................................................................................................................................................ 30
Waiting line management......................................................................................................................................................................30
Waiting line models ..................................................................................................................................................................................31
Simulation .....................................................................................................................................................................................................31
MODULE 8: CHOICE OF LOCATIONS FOR OPERATIONS ........................................................................................... 32
MOTIVATION AND STRATEGIC IMPORTANCE ............................................................................................................................................ 32
FACTORS INFLUENCING LOCALIZATION ..................................................................................................................................................... 32
LOCALIZATION CONCEPTS ............................................................................................................................................................................ 32
LOCALIZATION METHODS (PLANT LOCATION METHODOLOGY) ........................................................................................................... 33
Example of exercise: ..................................................................................................................................................................................33
............................................................................................................................................................................................................................33
MODULE 9: LOGISTICS MANAGEMENT .......................................................................................................................... 34
MANUFACTURING PLANNING AND CONTROL (MPC) .............................................................................................................................. 34
PURCHASING MANAGEMENT ....................................................................................................................................................................... 34
Supply positioning: Kraljic Matric ......................................................................................................................................................34
STO -Pyramid (Strategic,Tactictal, Operational) ........................................................................................................................34
,Module 1: Supply Chain Management
Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers,
warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the
right locations, and at the right time, in order to minimize system-wide costs while satisfying service level
requirements”
Supply Chain Management (SCM) is the coordination and management of all activities required to move products
and services from raw materials to the final customer across multiple organizations.
Key elements: sourcing, manufacturing en customer sales where information, product and money flows occur
Challenges
= evolution from traditional, transaction-based supply chains to integrated and responsive networks
- Faster time-to-market
- Wider product range
- More sales and models
Tier 2: suplliers of our suplliers Tier 1: our suplliers à impirtance of knowing what happens on both ends
Multiple suppliers = higher complexity
- Different transports, different time for in and outbound of the logistics
- Longer supply chains as an result of:
o Offshoring: relocating business activities to another country (where?)
o Outsourcing: delegating business activities to an external company (who?)
Demand characteristics
= building in redundance will reduce uncertainty (2 manufacturing plants, multiple suppliers) this
can be through data analytics to avoid disruptive events
Functional (food products) Innovative (trend products)
= coffee = starbucks
Demand uncertainties Low High
Demand Low High
Product life Low High
Inventory cost Low High
Profit margins Low High
Profit variety Low High
Stock out cost Low High
Obsolescence (throw away) Low High
Volume per SKU High Low
Demand predictability More Difficult
+ importance of finding the right match for your products can create more flexibility and reducing uncertainty
, Process Physically efficient Market responsive
Primary purpose Supply predictable demand Respond quickly to
efficiently at lowest cost unpredictable demand in
order to minimise stockouts,
forced markdowns and
obsolete inventory
Manufacturing focus Maintain high average Deploy excess buffer
utilisation rate capacity
Inventory strategy Generate high turns and Deploy significant buffer
minimise inventory thourgout stock of parts or finished
stockturns (indication of how chains goods
much time is needed to create
revenu) : revenu / inventory value
Lead-time focus Shorten lead time as long as it Invest aggressively in ways to
t does not add cost reduce lead time
Approach to choosing suppliers Select primarily for cost and Select primarily for speed
quality flexibility and quality
Product-design strategy Maximise performance and Use modular design and
minimise cost postpone differentiation as
much as possible
Managing supply chain complexities
= trade off between costs and customer service
à the competitive factors (quality, price, time, cost) have an impact on the benefits and results (revenue, sales
volume, profit, margin) where the variety of items impacting this is needed to be optimized from one singe
perspective
Alignment: establish incentives to improve entire chain
Adaptability: ability to change chain design due to market changes
Agility: response to short term problems
Inhoudsopgave
MODULE 1: SUPPLY CHAIN MANAGEMENT .................................................................................................................... 3
Challenges ....................................................................................................................................................................................................... 3
MANAGING SUPPLY CHAIN COMPLEXITIES ................................................................................................................................................... 4
New product introductions ...................................................................................................................................................................... 5
Product life cycle .......................................................................................................................................................................................... 5
INTERNATIONAL CONTEXT OF SUPPLY CHAINS............................................................................................................................................ 6
European supply chain .............................................................................................................................................................................. 6
PUSH VERSUS PULL SYSTEMS ......................................................................................................................................................................... 7
THE 3 V’S OF SCM .......................................................................................................................................................................................... 7
SILO ORGANIZATION VERSUS END-TO-END SUPPLY CHAIN OPTIMIZATION............................................................................................. 8
Theory of constraints.................................................................................................................................................................................. 8
CASE STUDY ZARA............................................................................................................................................................................................ 8
MODULE 2: OPERATIONS MANAGEMENT & STRATEGY ............................................................................................. 9
DEFINITIONS ..................................................................................................................................................................................................... 9
OPERATIONS AS A SOURCE OF COMPETITIVE ADVANTAGE ...................................................................................................................... 10
From corporate strategy to operational strategy .......................................................................................................................10
OM strategies ...............................................................................................................................................................................................11
CASE STUDY VB.............................................................................................................................................................................................. 11
MODULE 3: PROCESS MANAGEMENT & ANALYSIS .................................................................................................... 12
MODULE 4 – MANAGING DEMAND IN OPERATIONS ................................................................................................. 15
Forecast ..........................................................................................................................................................................................................16
Forward Integration.................................................................................................................................................................................16
Vendor Managed Inventory (VMI) – Push system........................................................................................................................17
Outsourced or own operation ...............................................................................................................................................................18
OPERATION LEVEL ........................................................................................................................................................................................ 18
ORGANIZATION OF CUSTOMER SERVICE (CS) .......................................................................................................................................... 18
PERFORMANCE MEASUREMENT (KPIS) .................................................................................................................................................... 18
MODULE 5: MANAGING SUPPLY IN OPERATIONS ...................................................................................................... 19
INTERNAL INTEGRATION .............................................................................................................................................................................. 19
Concept and process .................................................................................................................................................................................19
Planning & Control ....................................................................................................................................................................................20
Logistics organisation ..............................................................................................................................................................................21
.......................................................................................................................................................................................................................... 22
EXTERNAL INTEGRATION.............................................................................................................................................................................. 22
Supply Chain Management (SCM) .....................................................................................................................................................23
BENEFITS OF SCM ......................................................................................................................................................................................... 23
LEAD TIME (LT) ............................................................................................................................................................................................ 23
INTEGRATION TECHNOLOGY......................................................................................................................................................................... 24
Data integration .........................................................................................................................................................................................24
CASE STUDY .................................................................................................................................................................................................... 24
,MODULE 6: QUALITY MANAGEMENT IN OPERATIONS ............................................................................................ 25
THE IMPORTANCE OF QUALITY ................................................................................................................................................................... 25
Cost of quality ..............................................................................................................................................................................................25
QUALITY MANAGEMENT ............................................................................................................................................................................... 25
Total Quality Management (TQM) .....................................................................................................................................................25
Continuous Improvement (CI) ..............................................................................................................................................................25
Improvement tools (SPC tools).............................................................................................................................................................26
- The Shingo System ("fail-safe" design): avoids defects by giving workers feedback on their errors ..........26
o SMED (single-minute exchange or die): important savings in set-up times, e.g. Formula 1 ..........................26
o Poka-yoke: using tools and resources to ensure that you can prevent those errors ..........................................26
STATISTICAL PROCESS CONTROL (SPC).................................................................................................................................................... 27
Statistics quality control (SQC) ............................................................................................................................................................27
Capability index (Cpk) ...............................................................................................................................................................................27
Acceptance sampling ................................................................................................................................................................................28
SIX SIGMA ........................................................................................................................................................................................................ 28
MODULE 7: MANAGEMENT OF CAPACITY IN OPERATIONS .................................................................................... 29
DEFINING AND MEASURING CAPACITY ...................................................................................................................................................... 29
Types of capacity ........................................................................................................................................................................................29
CAPACITY STRATEGIES ................................................................................................................................................................................. 29
Capacity buffer ............................................................................................................................................................................................29
Expansion Strategies: ...............................................................................................................................................................................29
TOOLS FOR CAPACITY PLANNING ................................................................................................................................................................ 30
Waiting line management......................................................................................................................................................................30
Waiting line models ..................................................................................................................................................................................31
Simulation .....................................................................................................................................................................................................31
MODULE 8: CHOICE OF LOCATIONS FOR OPERATIONS ........................................................................................... 32
MOTIVATION AND STRATEGIC IMPORTANCE ............................................................................................................................................ 32
FACTORS INFLUENCING LOCALIZATION ..................................................................................................................................................... 32
LOCALIZATION CONCEPTS ............................................................................................................................................................................ 32
LOCALIZATION METHODS (PLANT LOCATION METHODOLOGY) ........................................................................................................... 33
Example of exercise: ..................................................................................................................................................................................33
............................................................................................................................................................................................................................33
MODULE 9: LOGISTICS MANAGEMENT .......................................................................................................................... 34
MANUFACTURING PLANNING AND CONTROL (MPC) .............................................................................................................................. 34
PURCHASING MANAGEMENT ....................................................................................................................................................................... 34
Supply positioning: Kraljic Matric ......................................................................................................................................................34
STO -Pyramid (Strategic,Tactictal, Operational) ........................................................................................................................34
,Module 1: Supply Chain Management
Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers,
warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the
right locations, and at the right time, in order to minimize system-wide costs while satisfying service level
requirements”
Supply Chain Management (SCM) is the coordination and management of all activities required to move products
and services from raw materials to the final customer across multiple organizations.
Key elements: sourcing, manufacturing en customer sales where information, product and money flows occur
Challenges
= evolution from traditional, transaction-based supply chains to integrated and responsive networks
- Faster time-to-market
- Wider product range
- More sales and models
Tier 2: suplliers of our suplliers Tier 1: our suplliers à impirtance of knowing what happens on both ends
Multiple suppliers = higher complexity
- Different transports, different time for in and outbound of the logistics
- Longer supply chains as an result of:
o Offshoring: relocating business activities to another country (where?)
o Outsourcing: delegating business activities to an external company (who?)
Demand characteristics
= building in redundance will reduce uncertainty (2 manufacturing plants, multiple suppliers) this
can be through data analytics to avoid disruptive events
Functional (food products) Innovative (trend products)
= coffee = starbucks
Demand uncertainties Low High
Demand Low High
Product life Low High
Inventory cost Low High
Profit margins Low High
Profit variety Low High
Stock out cost Low High
Obsolescence (throw away) Low High
Volume per SKU High Low
Demand predictability More Difficult
+ importance of finding the right match for your products can create more flexibility and reducing uncertainty
, Process Physically efficient Market responsive
Primary purpose Supply predictable demand Respond quickly to
efficiently at lowest cost unpredictable demand in
order to minimise stockouts,
forced markdowns and
obsolete inventory
Manufacturing focus Maintain high average Deploy excess buffer
utilisation rate capacity
Inventory strategy Generate high turns and Deploy significant buffer
minimise inventory thourgout stock of parts or finished
stockturns (indication of how chains goods
much time is needed to create
revenu) : revenu / inventory value
Lead-time focus Shorten lead time as long as it Invest aggressively in ways to
t does not add cost reduce lead time
Approach to choosing suppliers Select primarily for cost and Select primarily for speed
quality flexibility and quality
Product-design strategy Maximise performance and Use modular design and
minimise cost postpone differentiation as
much as possible
Managing supply chain complexities
= trade off between costs and customer service
à the competitive factors (quality, price, time, cost) have an impact on the benefits and results (revenue, sales
volume, profit, margin) where the variety of items impacting this is needed to be optimized from one singe
perspective
Alignment: establish incentives to improve entire chain
Adaptability: ability to change chain design due to market changes
Agility: response to short term problems
