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Supply chain management. CHAPTER 6. History. "Supply chain management is essentially the optimization of material flows and associated information flows involved with an organization’s operations” (p. 331) 70s: Manual data entry and primarily custom programming – no common platform

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history
History
  • "Supply chain management is essentially the optimization of material flows and associated information flows involved with an organization’s operations” (p. 331)
  • 70s: Manual data entry and primarily custom programming – no common platform
  • 80s: Common platforms occurred with mini-PCs. Still with custom codes
  • 90s: Common platforms and common codes based on Windows
  • End of 90s: Companies replaced old systems when the corruption was too high
  • Start of 00s: Internet took over as the transaction medium
solutions
solutions
  • The history shows thatapplying information systems, companiescanenhance or radicallyimprovemanyaspects of the supplychain. Such as:
    • Reduction in paperwork, inventoryholdings and time
    • Lower SCM system purchase
    • Management coststhroughuse of online services
    • Sharing of demandas a part of ECR
    • Supplier becomesresponsible for item availability
    • Human errorreduced
upstream downstream
Upstream/downstream
  • Upstream
      • Buy-side e-commerce
  • Downstream
      • Sell-side e-commerce
  • Supply chainnetwork
    • More accuratereflection
logistics
Logistics
  • The time-relatedpositioning of ressource, or the strategic management of the total supplychain
  • Inbound: Management of ressources entering on the buyer-side
  • Outbound: Management of ressources entering on the seller-side
push and pull
Push and Pull
  • Push supplychainmodel: A companycreates a product and pushes it to the costumers. ”This is a great product, now who shall we sell it to?”
  • Modern company using push SC model  Apple
  • Pull supply chain model: A company researches the costumers needs and creates a product upon that.
  • Modern company using pull SC model  custom computers (AlienWare)
value chain
Value Chain
  • A model that considers how supply chain activities can add value to products and services delivered to the customer.
  • Benefits for the customer are created by reducing cost and adding value to customers:
    • within each element of the value chain such as procurement, manufacture, sales and distribution;
    • at the interface between elements of the value chain such as between sales and distribution.
  • In equation form this is: Value = (Benefit of each VC activity – Its cost) + (Benefit of each interface between VC activities – Itscost)
value stream
Value Stream
  • The set of all the specific actions required to bring a specific product through the three critical management tasks of any business:
    • 1 the problem-solving task [the processes of new product development and production launch]
    • 2 the information management task [the processes of order taking, scheduling to delivery]
    • 3 the physical transformation task [the processes of transforming raw materials to finished product delivered to customers]
value network
Value Network
  • Deise et al. (2000) describe value network management as:
      • “the process of effectively deciding what to outsource in a constraint-based, real-time environment based on fluctuation”
  • I.E. when a computer company outsources their information systems to the delivery company (Post Danmark)
virtual organization
Virtual organization
  • An organization which uses information and communications technology to allow it to operate without clearly defined physical boundaries between different functions
  • It provides customized services by outsourcing production and other functions to third parties.