1 Intro To SCM Strategy and Value
1 Intro To SCM Strategy and Value
1 Intro To SCM Strategy and Value
Why do we care?
Supply Chain Management
• “The business discipline responsible
for buying everything an
organization needs to function,
converting it into a form that
customers might want to use, and
getting it to customers.”
The Supply Chain Network
History of Supply Chain
Management
Trading (pre-1750)
• Talent Management
Disruptive Technologies
What else?
Geopolitical and Social Change
What else?
Talent Management
What else?
Summary
• Supply Chain Management
• Value
• Evolution
• Challenges
Module 2: Integrating the
Internal Supply Chain
© Business eLearning
Group Work
How do you plan to complete the group
project?
Total Value Optimization
Organizational Strategy
Functional Strategy
• Plan
– Inputs
– Capacity
• Implement
– Processes
– Activities
The SCOR Model
• Horizontal Hand-Offs
• Functional Goals
• Multi-Level Alignment
Traditional Outputs
• “Stack it high and let it fly”
• Long-term Forecasts
• Economies of Scale
• Advanced Positioning
Traditional Integration
Traditional Supply Chain
Management
When does it work?
• Costs
– Lost Customers
– Customer Service
Prod.
A B C “Average” supplier to
Type key accounts
A 95% 95% 95% “Superior supplier to
other customers
B 95% 95% 95%
High inventories
Excessive expediting
C 95% 95% 95%
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Tailored Customer Service
Product Type
Customer
A B C Stronger franchise
Classification
with best customers
I 1 2 6
Lower logistics costs
II 3 4 7
Higher inventory
III 5 8 11 turns
IV 9 12 13 Reduced expediting
V 10 14 15
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Balanced Management
Fine-line (ABC) analysis
Stratified management guidelines
5%
15%
% of Sales or Profits
80%
% of Products or Customers
Summary
• Traditional Internal Organization
• Customer Value