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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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slide1

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]

slide2

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.

slide3

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.

slide4

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.

slide5

VMBA

What is Logistics?

  • The management of the storage and
  • flow of goods, services, and information
  • throughout the organization.
slide6

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
slide7

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

slide8

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.
slide9

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.

slide10

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

slide11

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.

slide12

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
slide13

VMBA

Supply Chain Management Functions

  • Forecasting demand
  • Selecting suppliers
  • Ordering material
  • Managing inventory
  • Scheduling production
  • Shipping and delivery
  • Organizing information exchange
slide14

VMBA

Understand the

customer

Understand the

product

Understand the

information flow

Understand the

process

Supply Chain Analysis

slide15

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?
slide16

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?
slide17

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?
slide18

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.
slide19

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?
slide20

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.
slide21

Customer Service + Quality

VMBA

Efficiency

Effectiveness

Suppliers

Inputs

Adding

value

Outputs

Customers

Results

Productivity

Customer

Service

Profitability

Performance Indicators (2)

slide22

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.
slide23

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.
slide24

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
slide25

VMBA

Supply Chain Management

Drivers of Change (2)

New technologies

  • Electronic Data Interchange (EDI)
  • internet, intranet, extranet
  • wireless communications
  • teleconferencing and telecommuting
  • bar coding.
slide26

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
slide27

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
slide28

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.

slide29

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
slide30

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
slide31

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
slide32

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
slide33

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
slide34

VMBA

ERP VENDORS

  • SAP
  • ORACLE
  • JD EDWARDS
  • PROPLESOFT
  • Baan
slide35

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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