Chapter 1: Introductory chapter

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Master Management Stratégique et Logistique S3 2017-2018

Mesure de la performance logistique Pr. Lhoussaine OUABOUCH FSJES Agadir

Chapter 1: Introductory chapter Outline  Performance  Supply Chain  Supply Chain Management  SCM & Supply Chain performance requirements  SC integration & opportunities in terms of SC Performance  Conclusion  Discussion & Review questions Pr. L. Ouabouch – FSJES – Agadir – Master MSL – 2017-2018

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Performance Definition  How successful an investment, company, etc. is and how much profit it makes. Cambridge Dictionary https://dictionary.cambridge.org

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Pr. L. Ouabouch – FSJES – Agadir – Master MSL – 2017-2018

Performance Definition  Efficient: – using resources such as time, materials, or energy well without wasting any – working well and quickly (efficient logictics operations/services/ systems)

 Effective: – successful in achieving the result that the company/supply chain manager wants Cambridge Dictionary https://dictionary.cambridge.org

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Performance Performance measures & metrics  All managers use metrics to manage and control operations.  There are many metrics in use, including those related to profits, costs, quality, productivity, flexibility, assets, inventories, schedules, and forecast accuracy.

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Performance SCOR metrics

Perspective Reliability

On-time delivery Order fulfillment lead time Fill rate (fraction of demand met from stock) Perfect order fulfillment

Flexibility

Supply chain response time Upside production flexibility

Expenses

Supply chain management costs Warranty cost as a percent of revenue Value added per employee

Assets/utilization 6

Metrics

Total inventory days of supply Cash-to-cash cycle time Net asset turns


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Supply chain

commons.wikimedia.org 7


Supply chain Definition (1)  SC = The system of people and things that are involved in getting a product from the place where it is made to the person who buys it.

Cambridge Dictionary https://dictionary.cambridge.org

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Supply chain Definition (1) – system: • a set of connected things or devices that operate together; • a group of organizations that work together for a particular purpose, or have similar activities;

– people – product: • manufactured or grown to be sold

– person – buys 9


Example1

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HP Supply chain

Supply Chains are inherently complex Pr. L. Ouabouch – FSJES – Agadir – Master MSL – 2017-2018

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Supply chain Definition (2)  SC = The sequence of organizations involved in the transformation of raw materials into finished goods and the delivery of those goods to the customer. – raw materials  finished goods – labor resource  service


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Example2

The Coffee Supply Chain

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lecturehub.ie

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Supply chain Definition (3)  “A supply chain is the network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services delivered to the ultimate consumer (Christopher ,1992)”. ..”In other words, a supply chain consists of multiple firms, both upstream (i.e., supply) and downstream (i.e., distribution), and the ultimate consumer” (Mentzer et al., 2001).

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‘’Supply Chain’’ Vs ‘’Value Chain’’

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agriculturenigeria.com

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Supply chain The Need to Manage the Supply Chain

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 Supply chain management is being given increasing attention as business organizations face mounting pressure to improve management of their supply chains.  In the past, most organizations did little to manage their supply chains. Instead, they tended to concentrate on their own operations and on their immediate suppliers.  As a result, supply chains experienced a range of problems that were seemingly beyond the control of individual organizations. The problems included large oscillations of inventories, inventory stockouts, late deliveries, and quality problems. (Stevenson, 2012)

Supply chain The Need to Manage the Supply Chain  These and other issues now make it clear that management of supply chains is essential to business success. The other issues include the following:

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– – – – – – – –

The need to improve operations Increasing levels of outsourcing Increasing transportation costs Competitive pressures Increasing globalization Increasing importance of e-business The complexity of supply chains The need to manage inventories

(Stevenson, 2012)

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Supply chain management

The Science of Better, Faster, and Cheaper

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Supply chain management Definition (1)  SCM = The activity of being in charge of and controlling the process of getting a product from the place where it is made to customers.


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Supply chain management Definition (1) – activity: • a situation in which a lot of things are happening or being done; – situation: the conditions that exist at a particular time and place.


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Supply chain management Definition (1) – controlling: • having the power to control (the ability to control or influence people, organizations, events,…) • a limit on something, or the act of limiting something in order to stop it from becoming worse • if something is out of control, it cannot be dealt with successfully Cambridge Dictionary https://dictionary.cambridge.org

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Supply chain management Definition (1) – process: • a series of actions that are needed in order to do something or achieve a result (success/profitability/savings).


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Supply chain management Definition (1) – customers: • • • • • •

people/organizations; B-to-C/B-to-B a simple strategy is to focus on the customer the customer is always right!! serve customers more efficiently different customer expectations/needs/preferences Performance=Being able to adapt the services to meet customer needs in different countries. Cambridge Dictionary https://dictionary.cambridge.org

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Supply chain management Definition (2)  SCM = the coordination and integration of the activities: – procure services and materials – transform them into intermediate and final products – deliver to the customer


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Supply chain management Definition (3)  Supply chain management is “... an integrative philosophy to manage the total flow of a distribution channel from supplier to the ultimate user.” (Cooper et al., 1997)  Supply chain strategy includes: “... two or more firms in a supply chain entering into a long-term agreement; ... the development of trust and commitment to the relationship; ... the integration of logistics activities involving the sharing of demand and sales data; ... the potential for a shift in the locus of control of the logistics process.” (La Londe & Masters, 1994). (Mentzer et al., 2001) 24


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Supply chain management Objectives of Supply Chain Management  Maximize value & lower waste/cost,  Create and sustain competitive advantage (based on the delivery of basic and value-added services),  Achieve “win-win”, global optimal not local optimal,  Competition is between Supply Chains not between companies,  “Collaboration” is the name of the game.

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Supply chain management The key functional areas of logistics management  Inventory Planning and Management  Warehousing  Procurement of Goods and Services  Packaging and Storage  Transportation  Customer service (Mentzer et al., 2001)

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SCM & SC Performance requirements SCM & Performance measurement What is an “efficient logistics management”?  There are five tactical characteristics of logistics management: – reliability, A recent analysis of software buyers found that the top reason for buying Supply Chain – responsiveness, Management software was to “automate – agility, and organize processes.” – cost, – and assets

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http://www.softwareadvice.com/scm/ buyerview/report-2014/


SCM & SC Performance requirements SCM & Performance measurement  Supply Chain Management as a process management involves:

Cross-functional Integration

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Inter-organizational Integration


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SCM & SC Performance requirements Cross-functional integration  Hence, there should be greater emphasis on accuracy of data collected.  The basic information should be based on real-time flow of goods and only then can logistics management be utilized to maximize customer satisfaction and reduce costs.

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SCM & SC Performance requirements Inter-organizational integration

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Inter-organizational integration

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SC integration: Opportunities in terms of Performance Benefits of integrating Supply Chains

Bridge gaps

Increase visibility

Optimize operations

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Enhance responsiveness

Improve decision making

Add competitive advantage

Better customer relationship


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SC integration: Opportunities in terms of Performance Example

www.alliance-healthcare.co.uk

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SC integration: Opportunities in terms of Performance Steps to implement End-to-End Supply Chain Visibility

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Conclusion

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Discussion & Review questions 1) 2) 3) 4) 5) 6) 7) 8) 36

What is a supply chain? What are some recent trends in supply chain management? What are the elements of supply chain management? What impact has e-business had on supply chain management? What are some of the advantages of e-business? Why is managing returns important? Explain the importance of supply chain visibility. Describe what purchasing managers do.

Refer to this document + complementary resource (available for download on my website) + search on the internet

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Discussion & Review questions 9) Describe supplier certification and explain why it can be important. 10) Name three different ways that technology has improved the ability to manage supply chains. 11) Explain why each of these is critical for a successful supply chain operation: a) b) c) d) e) f) 37

Integrated technology Real-time information availability Information sharing Event management capability Trust among trading partners Procurement

Refer to this document + complementary resource (available for download on my website) + search on the internet

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