SUPPLY CHAIN MANAGEMENT:. An Organizational Competency INTRODUCTION TO THE COURSE http://awhitebread.ba.ttu.edu [email protected] ALAN L. WHITEBREAD. IB 3353. Learning and doing in a business environment – always prepared! 4 TESTS EXERCISES / HOMEWORK
SUPPLY CHAIN MANAGEMENTSECTION 1Understanding the Market – Supply Chain Relationship1 – UNDERSTANDING AND CREATING VALUEALAN L. WHITEBREAD
It is the seamless end-to-end management of a complex set of decisions requiring the exchange and flow of information, products, services, and money.
Regulatory compliance and corporate governance
Customer, planning, quality, research, supplier, systems
Human Resource Development
Staffing and compensation
Education and skill development: change, education, professional development, team
Knowledge Management, MRP/ERP, JIT
Inventory & Logistics
The Aromatics (Thailand) Public Co. Ltd.
plus every other company, governmental agency, and organization.
Mining companies – Manufacturers – Suppliers – Assemblers – Services
Resellers of all kinds or final purchasers
Final purchasers of Resellers
NEW PRODUCT DEVELOPMENT
If you change one thing in a supply chain, you know that one or more other things will be affected. So you must make decisions for the good of the entire supply chain, not for a specific area.
For instance, the system losses in all other areas may greatly exceed the benefit to the one area. This causes the supply chain to lose efficiency.
In what mix?
When is it made?
How is it scheduled?
How is it delivered?
Warehouses or Distribution Centers
B2C is business-to-consumer.
B2B is business-to-business.
B2B or B2C Consumers
Planning and forecasting accuracy are critical as any delay in the system has a ripple effect! That ripple effect costs members time, money, and damaged relationships.
These are some of the tools available to you to create and increase customer value. A great SCM system will strive to add value throughout the supply chain with everything it does.
LC = Standard Cost + Transportation1 +
Insurance + Duties + Other Fees
1 Inland location to outbound port + port fees + transportation to inbound port + port fees
See my website for the brochure or your advisor for degree plan information.
SUPPLY CHAIN MANAGEMENTOnline/Distance Learning CourseSECTION 1Understanding the Market – Supply Chain Relationship2 – THE SUPPLY CHAIN: AN OVERVIEWALAN L. WHITEBREAD
THE PROCESS IS SOUND.
THAT IS WHY WE USE CONTINGENCY THEORY.
What will they do?
What will they buy?
Lack of water
Lack of food
Very poor infrastructure
Rapid increase in population
Normal increase in population
Entities and their Roles
PLUS – Information Requirements – Flows and Processes – Repelling Competitive Thrusts – Building Relationships
Manage all other tiers.
Suppliers accessing Wal-Mart’s store data.
Toyota suppliers advising deliveries will be short due to the earthquake.
The connected set of all
entities and flows that
perform or support the
required for production.
Focus on upstream
supplier and producer
and waste reduction.
All discrete and
[regardless of ownership]
that seek to enhance
in every single event,
process, and/or system
from raw materials
Focus on downstream
value creation for the
SUPPLY CHAIN MANAGEMENTOnline/Distance Learning CourseSECTION 1Understanding the Market – Supply Chain Relationship3 – INFORMATION [research for the supply chain]ALAN L. WHITEBREAD
SUPPLY CHAIN MANAGEMENTSECTION 1Understanding the Market – Supply Chain Relationship4 – MARKET DEFINITION, SEGMENTATION, AND TARGET MARKETINGALAN L. WHITEBREAD
In this example, the key attributes are Hispanic, ages 25-34, with household income over $50,000 per year having one or more children. The target market segment is the intersection of all four attributes. It is the small colored area named TARGET.
[Oxford - MacDonald - video]
When a firm uses the market segment approach it usually has between three and eight market segments.
Market segments that are not nearly unique result in lack of brand loyalty and consumers being less brand loyal [cannibalization]. Venn diagram explanation.
Remember - the number of market segments is a function of your market segmentation, not some arbitrary range. The more segments you have the more complex and expensive the marketing effort is likely to be.
“Lubbock’s leading radio station”
ATTITUDES, INTERESTS, & OPINIONS [AIO] for instance:
Spends 1+ hours per day on the Internet, heavy e-mail user
Buys on the Internet, goes to stores only as required
Professional, income above $75,000 per year
Belongs to multiple frequent traveler programs
The market profile should provide almost everyone that reads it a very similar picture of the people in this target market segment!
You must define every term so there is a clear understanding of the profile!
CHANNELS OF DISTRIBUTION
TWO LARGEST TARGET MARKET SEGMENTS
MARKETS / SEGMENTS
In this example, you have to decide which target market segments are good for your firm. #1 needs a channel of distribution you are either not in or have a very weak position. That is very hard to do. #2 and #4 are nice size. A large firm will attack #2, but #1, #3, and #4 may be too small to be of interest. #3 is the hardest of all because it has channel and product mix issues.
YOU ALWAYS NEED TO IDENTIFY A UNIQUE OR NEARLY UNIQUE RESPONSE / BEHAVIOR PATTERN FOR EVERY SEGMENT!
UNDIFFERENTIATED [MASS] MARKETING
The firm decides to ignore market segment differences.
One marketing mix
Same product to all segments
Salt Sugar Early Ford
DIFFERENTIATED [SEGMENTED] MARKETING
The firm decides to target several [large] market [s] segment[s]
Each market or segment has a marketing mix
Different products for each market segment
Proctor & Gamble detergents Current auto manufacturers
CONCENTRATED [NICHE] MARKETING
The firm decides to pursue a larger market share of selected [smaller]
market segments, sub-segments, or niches
Different products to the [sub-]segments
Different marketing mix for each segment or sub-segment
SUV’s standard to family to luxury
Specialized products for individuals and locations
LOCAL MARKETING INDIVIDUAL MARKETING
[Brands, promotions] [1:1 marketing]
Local chain grocery stores Amazon, Dell
TRANSITIONED TO CONCENTRATED [NICHE] MARKETING [beginning in 2008 -13 brands]
GROW, BUILD, OR MAKE
Real Estate Professional
Product[s] or Process[es] or Technology[ies]
-Level of technology
of Products / Services
-What are they used for?
-How they are used?
You get the same result using products within applications or applications within products.
-The extent to which marketing and business strengths compare to current and expected competitive and technology states
-The extent to which target market segments respond to elements of the marketing mix
SUPPLY CHAIN MANAGEMENTOnline/Distance Learning CourseSECTION 1Understanding the Market – Supply Chain Relationship5 – SYSTEMS THINKING AND SUPPLY CHAINSALAN L. WHITEBREAD
Metrics: Standard cost [SC], PPV
Metrics: SC / volume / automation
Metrics: Average unit price [AUP]
Metrics: Inventory & transportation
Your firm and your major competitors
Low cost structure
Take advantage of the firm’s strengths
Use the firm’s strengths to offset competitive threats
New markets, channels
Breadth of offering
Lack of management talent
Offset the firm’s weaknesses
Rapidly changing market
Customer Perceived Uniqueness
Low Cost Position
Focus on perceived value.
Examples = ?
Hard to maintain
Examples = ?
Understanding and focus.
No direct battles with major competitors.
Examples = ?
You are deciding between two alternatives with the following payoffs, states of nature, and probabilities. Which alternative should you choose?
SUBSIDIARY PIECE PART PURCHASE OPTIONS
10.00 / 100% = 10.00
Buy from U.S.
[10.00 landed cost]
9.80 / .96 = 10.21
Buy from qualified local supplier
[9.80 delivered cost]
9.60 / .9 = 10.67
Manufacture the product
[customer receives finished goods]
Process mapping has its own set of diagram symbols.
Receive customer specifications
Discuss final specs with customer
Make modifications to improve productivity
Customer approves sample parts
Engineering approves mold
Machine customer tooling
Design customer tooling
Add cooling lines
Make sample parts
Production sample run
Production approves mold
Review customer specifications