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VILLANOVA MBA PROGRAM. (VMBA). Virtual Supply Chain Management. Dr. Mohammad K. Najdawi College of Commerce & Finance Villanova University Villanova, PA 19085 Tel: (610) 519-5030 Email: [email protected] VMBA. What is a Supply Chain?. The sequence of suppliers that contribute

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Virtual Supply Chain Management

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VILLANOVA MBA PROGRAM

(VMBA)

Virtual Supply Chain Management

Dr. Mohammad K. Najdawi

College of Commerce & Finance

Villanova University

Villanova, PA 19085

Tel: (610) 519-5030

Email: [email protected]


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VMBA

What is a Supply Chain?

The sequence of suppliers that contribute

to the creation and delivery of a good or

a service to end customers.


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VMBA

Supply Chain Activities

The SC activities are planned, executed, and

monitored under the guidelines set by the company’s chosen customer service levels and in line with the company’s other operating goals.


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VMBA

Supply Chain Activities (2)

The supply chain of a company consists of different departments, ranging from procurement of materials to customer service.

The supply chain includes activities associated with inventory (materials) acquisition, storing, use in production, transit, and delivery to customers.


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VMBA

What is Logistics?

  • The management of the storage and

  • flow of goods, services, and information

  • throughout the organization.


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VMBA

Elements of Logistics

  • Materials management:

    • sourcing and receiving of raw materials or unfinished products for subsequent use

  • Material flow system:

    • the ability to locate and schedule material through to end production and disposition

  • Physical distribution:

    • the delivery of finished goods to customers


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VEMBA

Logistics Goal &

Objectives

The right

products

The right

quantity

The right

moment

At minimal

cost

Flexibility

Delivery

reliability

Delivery time/

lead time

Inventory

level


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VMBA

Logistics Steps

  • Logistics steps:

    • accepting a customer order

      • receive and enter

      • credit clearance / authorize

      • delivery commitment

  • supplier ordering

  • forecasting demand

  • scheduling manufacturing

  • inventory management

  • delivery to customer.


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    VMBA

    What is Supply Chain Management?

    Organizing the cost effective flow and storage

    of materials, in-process inventory, finished goods,

    and related information from point of origin to point

    of consumption to satisfy customer requirements.


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    Quality products

    Lowest possible cost

    VMBA

    Order fulfillment

    Integration of supply chains

    Customer service

    Preferred partners

    Communication

    Supply chain communities

    Common goals, objectives

    Supply Chain Evolution


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    VMBA

    Supply Chain Management Goal

    To evolve a company’s supply chain into an

    optimally efficient, customer-satisfying process,

    where the effectiveness of the whole supply chain is

    more important than the effectiveness of each

    individual department.


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    VMBA

    Supply Chain Management focus

    • Supply Chain Management focuses on business processes:

      • product change

      • planning

      • order management

      • stock management

    • instead of functions:

      • sales

      • purchasing

      • production


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    VMBA

    Supply Chain Management Functions

    • Forecasting demand

    • Selecting suppliers

    • Ordering material

    • Managing inventory

    • Scheduling production

    • Shipping and delivery

    • Organizing information exchange


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    VMBA

    Understand the

    customer

    Understand the

    product

    Understand the

    information flow

    Understand the

    process

    Supply Chain Analysis


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    VMBA

    SC Analysis

    Understand the Customer(1)

    • Know and understand the customers:

      • Your existing customers, i.e...

        • demographics

        • existing and potential number

        • income levels?

      • Who are your potential customers?

      • How might these customers be grouped?

      • For which percentage of sales is each group responsible?


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    VMBA

    AnalysisUnderstand the Customer (2)

    • What is the effect of various methods of communications (i.e., telephone, fax, e-mail, internet telephony systems) in your relation with your customers?

    • What do your customers want from you?

    • How well do your competitors meet customers needs?


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    VMBA

    AnalysisUnderstand the Products

    • Understand the products:

      • How many?

      • Where are they?

      • Which percentage of sales?

      • What is the product life cycle?

      • What is the product mix?


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    VMBA

    Analysis

    Understand the Process

    • Understand the production process:

      • process flow

        • linear flow

        • job shop - batch flow

        • assembly line

        • continuous flow

        • project flow

      • order fulfillment strategy

        • make-to-order

        • make-to-stock.


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    VMBA

    AnalysisUnderstand the Information Flow

    • Understand the information flow

      • What information is required for effective decision-making at each stage in the supply chain?

      • What data has to flow between each part of the supply chain?


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    VMBA

    Performance Indicators (1)

    • A total view must be taken in assessing performance.

    • Performance measures need to be focused on what factors add to total performance, total value or total cost.

    • The principle measure of performance is customer service. Optimum service levels are necessary from each supplier to each customer throughout the supply chain.


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    Customer Service + Quality

    VMBA

    Efficiency

    Effectiveness

    Suppliers

    Inputs

    Adding

    value

    Outputs

    Customers

    Results

    Productivity

    Customer

    Service

    Profitability

    Performance Indicators (2)


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    VMBA

    Performance Indicators (3)

    • Effectiveness:

      • accomplishment of the right things, on time, within the requirements specified.

    • Efficiency:

      • resources expected to be consumed divided by resources actually consumed.


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    VMBA

    Performance Indicators (4)

    • Productivity:

      • measures of output divided by measures of input for a given period of time.

    • Profitability:

      • relationship between revenues and costs.


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    VMBA

    Supply Chain Management

    Drivers of Change (1)

    • Drivers of change:

      • outsourcing trend

      • actual customer demand: speed, flexibility and cheap products

      • new software: ERP, sophisticated application software


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    VMBA

    Supply Chain Management

    Drivers of Change (2)

    New technologies

    • Electronic Data Interchange (EDI)

    • internet, intranet, extranet

    • wireless communications

    • teleconferencing and telecommuting

    • bar coding.


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    VMBA

    Supply Chain Management

    Drivers of Change (3)

    • Shorter Product Life-Cycles

    • Product Proliferation and Mass Customization

    • Reduced Product Costs

    • Competition

    • Increased Customer Needs

    • Need to survive in the Age of the Virtual Enterprise


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    VMBA

    Virtual Supply Chain Management

    VSCM

    • The Web is The Medium Through Which the Essential Processes of Managing and Synchronizing SCs is Carried Out

    • VSCM Critical to E-Business Implementations

    • VSCM Will Change the Nature of Business


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    VMBA

    Virtual Supply Chain Management

    VSCM

    VSCM Will Change Nature of Business

    XYZ Company misses on VSCM will find itself celebrating the squeezing of supplier margins at auction or the reduction in inbound inventory by sharing forecasts. Competitor might shut XYZ out of the channel completely.


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    VMBA

    Virtual Supply Chain Management

    &

    Customer Demands

    • Cost is not Sole Arbiter of Value

    • Customers Demand Personalization of Products, Services, and Delivery

    • Customers Demand Innovation of Products, Services, and Delivery

    • Customers Demand More Flexibility

    • Grants More Competitive Power (Network of Business Partners)

    • Requires Tight Synchronization of SC Activities With the Demands of Marketplace

    • Needs to manage Complexity & Immediacy of Synchronization


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    VMBA

    VIRTUAL SUPPLY

    CHAIN MANAGEMENT

    • e Design

      • Product Innovation on the Web

  • e Mediaries and Exchanges

    • Using Online Markets to Revolutionize Buying and Selling

  • e Web-Based Collaboration Planning

    • The Virtualization of The Supply Chain

  • e Fulfillment

    • Matching the Performance of Physical Activities to the Virtual World


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    VMBA

    Virtual Supply Chain Management

    • Provides Mass Customization

    • Allows Massive Scalability

    • Grants Faster Fulfillment

    • Provides More Flexible Fulfillment

    • Enhances the Ability to Develop New Channels

    • Grants More Competitive Power (Network of Business Partners)

    • Requires Tight Synchronization of SC Activities With the Demands of Marketplace

    • The Need arises to manage Complexity & Immediacy of Synchronization


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    VMBA

    Virtual Supply Chain Management

    • Creates New Value Derived From:

      • Synchronized Supply Chain

      • Enhanced SC Performance

      • Reach out Bigger Markets

      • Mass Customization

      • New Products and Services

    • Changes SC Management, Planning, Control

    • Information, Decisions, Processes on the Web

    • New Paradigms of Inter-Company Boundaries

    • New Roles For Upstart Specialist Providers of Virtual and Physical Activities

    • New Virtual Competitive Capabilities


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    Supply Chain Management

    &

    ERP Systems

    VMBA

    • ERP is an Internal System that Automates Internal Processing Transactions

    • SCM is an Information Decision Making System

    • Implementation of an ERP System is Controlled by the Enterprise

    • Implementation of a SCM System Requires the Cooperation of many different Entities with Different Information Systems


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    VMBA

    ERP VENDORS

    • SAP

    • ORACLE

    • JD EDWARDS

    • PROPLESOFT

    • Baan


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    VMBA

    SCM VENDORS

    • Agile: Agile Anywhere, Agile Buyer

    • Cognos: Cognos EBI

    • I2 Technologies: TradeMatrix

    • Industri-Matematic International: Vivaldi

    • Manugistics: NetWorks, WebWorks

    • Verano: Supply Chain Portal


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    VMBA

    THANK YOU

    [email protected]


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