Effective Supply Chain Management for Enhanced Customer Value

1. 10 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Supply Chain Management CHAPTER 14

2. Supply Chains LOI Supply Chain The connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function

3. Supply Chains LOI A management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhanced customer and economic value Supply Chain Management

4. Supply Chains LOI

5. Supply Chain Managers • Supply chain managers are responsible for • Making strategic decisions • Management of information through supply chain • Coordinating relationships between company and external partners LOI

6. Benefits of Supply Chain Management • Supply chain oriented companies commonly report: • Lower inventory, transportation, warehousing, and packaging costs • Greater supply chain flexibility • Improved customer service • Higher revenues • Increased profitability LOI

7. LO2 Material and service supplier Integration Relationship Integration Internal Operations Integration Measurement Integration Customer Integration Technology and planning Integration Supply Chain Integration Firm-to-Firm Social Interactions Operational Planning and Control Customer Integration

8. Key Processes LO3

9. Customer Relationship Management The prioritization of a firm’s marketing focus on different customer groups according to each group’s long-term value to the company or supply chain; designed to identify and build relationships with good customers. Customer Relationship Management Process LO3

10. Customer Service Management Customer Service Management Process LO3 A multi-company, unified response system to the customer whenever complaints, concerns, questions, or comments are voiced; designed to ensure that customer relationships remain strong.

11. Demand Management The alignment of supply and demand throughout the supply chain to anticipate customer requirements at each level and create demand-related plans of action prior to actual customer purchasing behavior. Demand Management Process LO3

12. Order Fulfillment A supply chain management process that involves generating, filling, delivering, and providing on-the-spot service for customer orders. Order Fulfillment Process LO3

13. Manufacturing Flow Management Manufacturing Flow Management Process A process that ensures that firms in the supply chain have the resources they need LO3

14. Supplier Relationship Management A supply chain management process that supports manufacturing flow by identifying and maintaining relationships with highly valued suppliers Supplier Relationship Management Process LO3

15. Returns Management A process that enables firms to manage volumes of returned product efficiently, while minimizing costs and maximizing the value of the returned assets to the firms in the supply chain. Returns Management Process LO3

16. Supply Chain Management The strategy that focuses primarily on the removal of waste from the supply chain to achieve the lowest total cost to the members of the supply chain system Lean Supply Chain Management Agile Supply Chain Management LO4 The supply chain strategy that focuses primarily on the ability of the firm to fulfill customer demand, even if this means somewhat higher costs

17. Mapping The Supply Chain LO4

18. Sourcing & Procurement Order Processing SupplyChainTeam Inventory Control Logistics Information System Warehouse & Materials Handling Transportation LO5 Logistical Components of the Supply Chain

19. LO5 Sourcing and Procurement The Role of Purchasing: • Plan purchasing strategies • Develop specifications • Select suppliers • Negotiate price and service levels • Reduce costs

20. Order Processing ElectronicDataInterchange Information technology that replaces paper documents that accompany business transactions with electronic transmission of the information. http://www.walmartstores.com Online LO5

21. Inventory Management and Control Inventory ControlSystem A method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer’s or a customer’s demand. LO5

22. Inventory Management and Control Materials Requirement Planning(MRP) An inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer. Distribution Resource Planning (DRP) An inventory control system that manages the replenishment of goods from the manufacturer to the final consumer. LO5

23. Sleep Right Mattress Retail Store Sleep Right Distribution Center ABC MattressWholesaling Company Great Mattress Company MRP LO5 Inventory Replenishment Example

24. Receive goods into warehouse Identify, sort, and label goods Dispatch the goods to temporary storage Recall, select, or pick the goods for shipment LO5 Materials Handling Functions

25. Airways Water Pipelines Motor Carriers Railroads LO5 Transportation

26. Transportation Mode Choice • Cost • Transit time • Reliability • Capability • Accessibility • Traceability LO5

27. Supply Chain Performance Measurement LO6 • A good metric is characterized by five qualities: • Creates understanding of strategic objectives • and tactical plans • Promotes behaviors that are consistent with • achieving these objectives • Allows for recording of actual results/outcomes • Allows companies to compare themselves to • competitors and customer expectations • Motivates continuous improvement

28. Advanced computer technology Outsourcing of logistics functions Electronic distribution Trends in Supply Chain Management LO7 Globalization of supply chain management Outsourcing of logistics functions

29. Advanced Computer Technology • Automatic identification systems • Bar coding • Radio frequency technology • Communications technology • Supply chain software systems LO7

30. LO7 Outsourcing Logistics Functions Outsourcing Benefits Reduce inventories Locate stock at fewer plants and distribution centers Provide same or better levels of service