Principles of Supply Chain Management Chapter 1
Review of Last Class • Supply Chain Management – THEN & NOW –Ford versus Auto Industry Today • Growing Demands – One, Two, and Three Dimensions – Ford versus Today – Laundry Detergent – Customer Demands • Supply Chain Tiers • Bullwhip • ERRORS and DEMAND VARIANCE • Expansion of Needs – Onion Skin Growth of SCM • Productivity Math – RISK vs BENEFIT – Blanket, Expense Initiatives, Growth • Vertical versus HorizaNTAL • Supply Chain Definitions
WHY SUPPLY CHAIN MANAGEMENT? 1.Increased Complexity of Products (diversity) 2.Increased Competition competing for Market 3.Increased Complexity of Supply Chain Network 4.Increased Innovation in Products 5.Benefit of Best in Class Time to Market 6.Globalization 7.Supply Chain Mgmt controls 90% of COGS 8.… more
SUPPLY CHAIN CONTROLS 90% of COGS -IT IS THE DOORWAY TO PROFIT
GROWING DEMANDS As Diversity grows, so does Complexity and Difficulty of Planning and controlling Inventory Levels
APROCESS IMPROVEMENT – PRODUCTIVITY MATH Graph REDUCE EXPENSE or INCREASE PRODUCTION?
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