Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

CSCP Module 1 - Fundamentals of SCM

No description
by

Rafael Ochoa

on 17 October 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of CSCP Module 1 - Fundamentals of SCM

APICS CSCP
MODULE 1
Fundamentals of
Supply Chain Management

Section A :
Supply Chain Management Concepts

Section B:
Supply Chain Alignment with Business Strategy

Section C:
Supply Chain Design and Improvement Considerations

Section D :
Inventory Management

Section E :
Logistics Fundamentals

Section F :
Market Segmentation

Section G :
Demand Planning

Section H :
Customer Relationship Management (CRM) Concepts

Section I :
Supply Management Concepts

SCOR
Model
Types and
Stages of SCM
SCM
Benefits
Accounting
and Financial Statement Basics
Basic
Supply Chain
SCM
Objectives
Supply Chain entities, structures, flow, and processes
The SCOR Model
Types and Stages of Supply Chain management
SCM objectives, key terms, and benefits
Accounting and finance overview
SUPPLY CHAIN
is "a global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash."
Basic Supply Chain
3 Entities
Raw Materials
Energy
Services
Components
Products
Power
Professional Services
Government Services
Educational Services
Retailer
Wholesaler
Distributor
End User
SUPPLIERS
PRODUCER
CUSTOMER
<---- Upstream
Downstream --->
Stable
Reactive
Efficient Reactive
3 Supply Chain Structures
Significant Stability
Focused on Execution, efficiency and cost
Simple Technology and No real-time information
Demand fulfillment from partners' sales and mkt
Chain is a cost center
Minimal connectivity technologies and capital assets
Focus on Throughput
Competitive positioning serving as an efficient, low-cost and integrated unit
Focused on total delivered cost of finished goods
Uses High Technology and new equipment to reduce labor costs and improve capacity and Throughput
Must
Guarantee steady flow
Reduce Supply Chain costs
INFORMATION FLOW
PRIMARY PRODUCT FLOW
PRIMARY CASH FLOW
REVERSE PRODUCT FLOW *
Invoices, sales lit, specs, blueprints, receipts,orders,rules and regs, etc.
Material, components, supplies, services, energy, finished products
Payments for products, supplies, etc.
Returns for repair, replacement, recycling, disposal, etc
Basic Supply Chain: 4 Flows
* Reverse Supply Chain managed by Reverse Logistics
<---- Upstream
Downstream --->
Service Supply Chain Example
A FIRM IN SERVICE INDUSTRY is "an organization that provides an intangible product such as medical or legal advice." Includes retail trade, wholesale trade, transportation and utilities, finance, insurance and real state, construction, social services and goverment.
Manufacturing Supply Chain Model
Demand History - Business Focus - Needs Connectivity/Technology
SCOR - SUPPLY CHAIN OPERATIONS REFERENCE MODEL
is "a process reference model developed and endorsed by the Supply Chain Council (SCC), as the cross-industry standard diagnostic tool for SCM."
Focus on SCM processes :
Plan, Source, Make, Deliver and Return
Vertical
Integration
Horizontal
Integration
Direct control (ownership) of multiple links in the supply chain from raw material extraction to retail sales.
Coordinated management of separately owned links in the supply chain: "Outsourcing". Each link focus on own core competences.
Distribution
Raw Materials Extraction
Production
Retail Sales
Components/Products/Services
Distribution

Raw Materials Extraction
Production

Retail Sales
Components/Products/Services
KEIRETSU
is "a form of cooperative relationship among companies in Japan where the companies largely remain legally and economically independent, even though they work closely in various ways such as single sourcing and financial banking. Usually formed around a bank and a trading company, but distribution (supply chain) keiretsu alliances have been formed of companies ranging from raw material suppliers to retailers"
Benefits of vertical integration
No competitors for supplies
Enhanced visibility into operations
Same ownership and management for all activities
Benefits of lateral integration
Economies of scale and scope
Improved business focus
Leveraging communication and production competences
2 Types of SCM
4 Stages of SCM
Stage 1
Multiple
Dysfunction
Stage 2
Semi-Functional
Enterprise
Stage 3
Integrated
Enterprise
Stage 4
Extended
Enterprise
No planning, Blurry Mission, No Forecast
Warehousing Close to markets, excess Inventory and workers with little training
Very Basic MRP with BOM, Master Schedule, on-hand and Order data
Basic Material Handling
Inventory management, Purchasing, Traffic functions enhanced
Effective Hard Skills/Training
Reliable Forecast by Marketing area and MRPII software in Place
Focus on business processes supported by software
ERP (Enterprise Resource Planning)
Product / service design is a teamwork
Improvements in customer service due to market segmentation and replenishment policies
Strategic inventory
Warehousing and transportation decisions focused on cost effectiveness and customer service
Automated warehousing equiment
Initial Exploratory collaboration channel master and partners
MRP II merged with ERP enterprisewide planning
Networked enterprise built over Internet platforms - synchronized ERPs
CPFR (Collaborative Planning Forcasting and Replenishment) and Periodic S&OP meetings
E-Commerce
Start Integration With External Members.
(Logistics Supplier)
SUPPLY CHAIN MANAGEMENT
is "the design, planning, execution, control, and monitoring of SC activities with the objective of creating net value, building competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally (Globally in this case, mean worldwide or in the entire chain)."
Other aspects:
SCM is about creating net values
There should be value-creating activities that transcend particular entities' activities
SCM requires a balancing act among competing interests.
VALUE CHAIN
is made up of "the functions within a company that add value to the goods or services that the organization sells to customers and for which it receives payment."
VALUE STREAM
is "the processes of creating, producing, and delivering a good or service to the market. For a good, the value stream encompasses the ram material supplier, the manufacture and assembly of the good, and the distribution network."
VALUE STREAM MAPPING
is "drawing the current production process/flow and then attempting to draw the most effective production process/flow."
1. Add Value for customers and Stakeholders
2. Improve Customer Service
3. EFFECTIVELY use systemwide resources
4. EFFICIENTLY use systemwide resources
Leverage
5. Leverage partner strenghts
TBL (Triple Bottom Line)
Customer
GREEN SUPPLY CHAIN
is "a SC that considers environmental impacts on tis operations and takes action along the supply chain to comply with environmental safety regulations and communicate this to customers and partners."
Sustainability !
Government and regulatory pressures (pollution prevention and control)
Good environmental management and sustainability concerns (Conserve energy, reduce waste and recycle)
Public opinion and the power of consumer choice (Consumer awareness to preserve Earth resources)
Potential for competitive advantage (Increased resource efficiency and reduced costs builds eco-friendly reputation)
Cut costs to yield net gain at the bottom line
It takes money to make money - improvements require investments to realize profits and/or revenues (ROI/ROA)
Gains should be equitably distributed
Financial
Social
Quality of product or service -right design, right production, and right materials
Affordability -appropriate price level
Availability -On time delivery
Service -(from design phase)
Sustainability -Environmental and socially responsible
Creating a positive good by delivering socially desirable and useful product or services
Avoiding or reducing negative environmental side effects from extraction, processing, and construction
Integrating sustainability into the supply chain
CUSTOMER SERVICE
is "the ability of a company to adress the needs, inquiries, and request from customers. Also, the measure of the delivery of a product to the customer at the time specified."
Customer
Operational Performance
Customer Satisfaction
Availability
Availability to have the product when it is wanted by a customer
Time needed to deliver a customer order
Meet customer expectations in terms of quality, price and delivery
Attributes
Effectiveness:
Getting the right product and the right amount to the right customer at the right time
Employees
Raw materials
Equipment
Focused on customer's needs and wants!
Tools and metrics:

Benchmarking
SCOR
Strategic Goals
Efficiency:
A measurement of the actual output compared to the standard output expected; measures how well something is performing relative to existing standards
Inward-focused, how process can be done less expensively, in less time, and with fewer resources
CAPACITY
is "all about what can be accomplished by employing all the resources in the SC." Also :
(1) The ability of a system to perform its expected funtion
(2) The ability of a worker, machine, work center, plant, or organization to produce output per time period
(3) Required mental ability to enter into a contract
How well...
How useful...
PARTNERSHIP
is "a relationship based on trust, shared risk, and rewards aimed toward achieving a competitive advantage."
Add value to products (shorter time)
Improving market access (new channels)
Build financial strength (shared costs)
Add technological strength
Strengthen operations (low cost)
Enhancing strategic growth
Improve organizational skills (shared learning)
Strengths
Improved market knowledge
The 3 V's : Velocity, Visibility, Variability
Integrated Operations
Improved management of risk
Increased Sustainability
The 3 V's
V
V
V
+
=
Visibility
Velocity
Variability
VISIBILITY
is "the ability to view important information throughout a facility or supply chain no matter where in the facility or supply chain the information is located."
VELOCITY
is "a term used to indicate the relative speed of all transactions, collectively, within a supply chain community. A maximum velocity is most desirable because it indicates a higher asset turnover for stockholders and faster order-to-delivery response for customers"
VARIABILITY
is the natural tendency of the results of all business activities to fluctuate above and below an average value.
VALUE
is "the worth of an item, good, or service."
VALUE ADDED
is "the actual increase of utility from the viewpoint of the customer as a part is transformed from from raw material to finished inventory. It is the contribution made by an operation or a plant to the final usefulness and value of a product, as seen by the customer."
Average
time to completion
number of defects
daily sales
production yields
Variety
Volume
Networks : intranet, extranet, ERP
Automation
Barcodes, RFID
Integrated
SUPPLY CHAIN RISK
is based "on decisions and activities that have outcomes that could negatively affect information or goods within SC."
RISK RESPONSE PLANNING
is "the PROCESS of developing a plan to avoid risks and to mitigate the effect of those that cannot be avoided."
RISK RESPONSE PLAN*
is "a WRITTEN DOCUMENT defining known risks, including description, cause, likelihood, costs, and proposed responses that also identifies the current status of each risk."
RISK MANAGEMENT
is "the PROCESS of identifying risk, analyzing exposures to risk, and determining how to best handle those exposures."
* Also know as BUSINESS CONTINUITY PLAN
Flow of funds
Spend Management
Standard Costing
Goes Upstream
Not Linear
Reduces cash-to-cash cycle time
Improves customer-supplier relationship
Reduces imbalances between larger and smaller supply chain players
Consolidates internal demand across the business and partners to find areas for discounts
Manages the outflow of funds in order to buy goods and services
Coordinates closely with accounts payable
CASH-TO-CASH CYCLE TIME
is "an indicator of how efficiently a company manages its assets to improve the speed or turnover of cash flows."
SPEND MANAGEMENT
is "managing purchases of goods and services in a supply chain, including outsourcing and procurement activities."
STANDARD COST
is "the target of costs of an operation, process, or product, including DIRECT MATERIAL, DIRECT LABOR, and OVERHEAD charges."
STANDARD COST ACCOUNTING SYSTEM
is "a cost accounting system that uses cost units determined before production for estimating the cost of an order or product. For management control purposes, the standards are compared to actual cost, and variances are computed."
COST OF GOODS SOLD (COGS)
is "an accounting classification useful for determining the amount of direct materials, direct labor, and allocated overhead associated with the products sold during a given period of time ."
CURRENT PRICE
is "the price currently being paid as opposed to standard cost. (A related term is market price, which is the going price for an item on the open market."
USAGE VARIANCE
is "the deviation of the actual consumption of materials as compared to the standard."
COST VARIANCE
is "the difference between what has been budgeted for an activity and what it actually costs."
Efficiency =
Standard Hours of Work
Hours Actually Worked
x 100%
1. Balance Sheet
A financial Statement showing the resources owned, the debts owed, and the owners' share of a company at a given point in time
Assets = Liabilities + Owners' Equity
ACCOUNTS RECEIVABLE
are "the value of goods shipped or services redered to a customer on which payment has not been yet received and usually includes an allowance for bad debts."
ACCOUNTS PAYABLE
are "the value of goods and services acquired for which payment hat not yet been made."
WORKING CAPITAL
is "the current assets of a firm minus its current liabilities."
2. Income Statement
A financial Statement showing the net income over a given period of time
PROFIT MARGIN
is "the difference between the sales and cost of goods sold...sometimes expressed as a percentage of sales. In traditional accounting, the product profit margin is the product selling price minus the direct material, direct labor, and allocated overhead for the product, sometimes expressed as a percentage of selling price."
Income = Revenues - Expenses
GROSS PROFIT MARGIN
is "the difference between total revenue and the costs of goods sold."
3. Statement of
Cash Flows
CASH FLOWS
is "the net flow of dollars into or out of the proposed project. The algebraic sum, in any time period, of all cash receipts, expenses, and investments."
Cash-to-cash cycle time = Inventory + accounts receivable - accounts payable
days
days
days
Business
Strategy
A plan for choosing how to compete
Supply Chain Strategy
A plan for how the supply chain will function in its environment to meet the GOALS of the business and its STRATEGIES.
Organizational Strategy
A plan for how a company will function in its environment.
3 Generic Strategies:
1. Least Cost
2. Differentiation
3. Focus
STRATEGIC PLAN
is "a PLAN that describes how to marshal and determine actions to support the mission, goals and, objectives of an organization. It generally includes an organization's explicit MISSION, GOALS and OBJECTIVES and the specific actions needed to achieve those goals."
Hybrid Business Strategies
Best Cost
Low Cost
Broad Differentiation
Focused Differentiation
Focused Low Cost
creates a hybrid, low-cost approach for providing a differentiated product or service
focuses on delivering low price and no-frill basics with prices that are hard to match
creates products and service attributes that appeal to many buyers looking for variaty of goods
develops unique strategies for target market niches to meet unique buyer needs
designed to meet well-defined buyer needs at a low cost
Competitive Advantages
Low-Cost Advantages
Focus Advantages
Differentiation Advantages
Provides the same benefits from a product or service at a lower cost that a competitor
Delivers benefits that exceed those of a competitor's product or service
Creates a product or service that is better suited to a given customer segment that what the competition can offer
Competitive Analysys
Product Differentiation
Specifies how to:
- Satisfy Customers
- Grow the business
- Compete in its environment
- Manage the organization and develop capabilities
- Achieve financial Objectives
Customer focus and alignment
Forecast-driven enterprise
Demand-driven Enterprise
Product-type-driven Enterprise
4 Organizational Strategies
Supply Chain Strategy aligned to deliver
Right product/service
Right Price
Right Time and place
Nucleus firm utilizes a Forecast and
safety stocks in Supply chain to minimize Bullwhip effect
The production process is based on real demand data, not in forecast
- In production, the production of items only as demanded for use or to replace those taken
- In material control, the withdrawal of inventory as demanded by the using operations. Material is not issued until a signal comes from the user.
- In distribution, a system for replenishing field warehouse inventories where replenishment decisions are made at the field warehouse itself, not at the central warehouse.
PULL SYSTEM
- In production, the production of items at required times based on a given schedule planned in advance
- In material control, the issuing of material to a job order at its start time.
- In distribution, a system for replenishing field warehouse inventories where replenishment decision making is centralized, usually at the manufacturing site or central supply facility.
PUSH SYSTEM
Demand-Driven Enterprise
Major Steps
1. Provide ACCESS TO REAL DEMAND data along the chain for greater visibility of the end customer
2. Establish TRUST and promote collaboration among suppy chain partners
3. Increase AGILITY of trade partners
FUNCTIONAL PRODUCTS
INNOVATIVE PRODUCTS
High average utilization rate
Minimal inventory with high turns
Short lead time
Suppliers chosen for cost, quality
Products with maximum performance, minimal cost
Buffer capacity (safety stock)
Aggressive reduction of lead times
suppliers chosen for speed, flexibility, quality (rather than cost)
Modular design with postponement of differentiation.
Emphasize predictability and low cost
Emphasize market responsiveness
Full transcript