Supplementary on SCM Supply Chain n A network

Supplementary on SCM

Supply Chain n A network model q q q n Industrial structure q q n n n Product supply chain Service supply chain Product/Service supply chain Potential suppliers and customers Competitors and collaborators Visualize the current environment Identify the role of a company in the industry Informal model for analysis

Suppliers Manufacturers Transportation Costs Material Costs Warehouses & Distribution Centers Transportation Costs Manufacturing Costs Customers Transportation Costs Inventory Costs

S 1 Rd 1 Sd 1 M 1 S 2 Ss-1 R 2 Manufacturing Dd 2 Rdr-2 Di R 3 Rd r-1 Sd s-1 Rr-1 Dd ds S Dd d Rd Mm Rd 2 Sd s-2 Ss-2 D 1 1 Dd R 1 r Waste Ss Supplier Manufacturers Oversea Rr Recycle Distributors Retailers

Germany Trading company 1 Packaging Company Italy Trading company 2 Plastic Company France Chewren India Cutter Company Oversea New. York Wal-Mart Waste Metal Company Supplier Germany Recycle Suppliers Manufacturers Distributors Retailers

Simchi-Levi viewpoints on forces putting on executives n n n Global supply chains with long lead time suggests that supply chain pipelines are full of inventory. Customer demand is shifting, and there is a lot of pressure to increase service levels. Labor costs in developing countries are increasing - annually, the costs in China have raised 20%, in Mexico 5%, and U. S. 3% over the last five year. Higher energy prices which affect their transportation costs. As transportation increases, companies try to bulk up their shipping amounts - which is great for transportation but bad for inventory. Volatility in commodity prices begs the questions of what contracts companies should sign. Executives need to manage their supply chain in an environment that is uncertain so as to make the company more sustainable.

Evolution of SC n Single factory q q n Multiple factories q q q n Production plan, floor plan, cost reduction (by managing material cost) Customer satisfaction is not a big concern Production plan, floor plan, cost reduction (by cutting headcounts and outsourcing) Logistics control & managing information Customer satisfaction is a concern (thus CRM) Multiple factories (global network) q q Production plan, floor plan, cost reduction, production outsourcing, logistic control Channel outsourcing Customer satisfaction is a big concern Workers satisfaction is a concern

n CMM q q q 5. Optimizing Level 4. Managed Level 3. Defined Level 2. Repeatable Level 1. Initial Level

Difficulties in Supply Chain Management n n n Mapping strategy decision to operational design Multiple perspectives and hence multiple models Multiple enterprises are involved Business environment change SC integration is complicated

Customer perception: New product design & production process Customer Service R&D Services from suppliers -Quality Control -Schedule Tracking Bank Administration Buss. Development Enterprise Core Process -Repeated every months -Repeated every week -Repeated every day Technologies needed Services/Products Management Processes Finance/Acct. (Process) Support Processes People Tools Process HR (Process) Marketing/Sales IT management

Organization as a Composition of Service Units Organization Service Unit Organization can be defined as a PS System. Each department can then be defined as a Service Unit. Working Teams (color blocks) can also be viewed as service units. 24

Organization as a Composition of Service Units Tools include (i) hardware like plastic molding machine, rice cookers, computers, scanners; and (ii) information systems. 25

Business Environment 2010 FALL EC Websites Development 26

Business Environment (70’s – 90’s) 2010 FALL EC Websites Development 27

Business Environment (00’s – Present) 2010 FALL EC Websites Development 28

Business Environment (Beyond) 2010 FALL EC Websites Development 29

Organization as a Service Unit Industry is a network of organizations. An organization can be defined as a service unit which serves other organizations in the network. 30

Business Environment (Beyond) 2010 FALL EC Websites Development 31

Complex Business Environment 2010 FALL EC Websites Development 32

Service Engineering

Service Engineering