“SCM, CRM, and ERP”
Henry C. Co Technology and Operations Management, California Polytechnic and State University
Outline
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Supply Chain Management
The Beer Game –the Bullwhip Effect What Is SCM? Why Is SCM Important? E-Enabled SCM Solutions Collaborative Planning, Forecasting and Replenishment
“Supply Chain Management Primer,”
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Features
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Includes all activities and processes to supply a product or service to a final customer. Any number of companies can be linked in the supply chain. A customer can be a supplier to another customer so the total chain can have a number of supplier-customer relationships. Depending on the products and markets, the distribution system can be direct (supplier to customer) or indirect (involving distributors, warehouses, and retailers).
Lee and Billington
A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Ganeshan and Harrison
EDI and the Internet
The information available to supply chain partners, and the speed with which it is available, has the potential to radically reduce inventories and increase customer service.
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What is the Supply Chain?
A network of autonomous or semi-autonomous business entities collectively responsible for procurement, manufacturing, and distribution activities associated with one or more families of related products. Jayashankar et al. A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through a distribution system.
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The VMI Partnership
The supplier—usually the manufacturer but sometimes a reseller or distributor—makes the main inventory replenishment decisions for the consuming organization.
U.S. transportation & warehousing expense: ≈ 10% of GDP U.S. companies: 25% of corporate budgets on SCM
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The supply chain is a series of links and shared processes that exist between suppliers and customers. Link and processes – all activities from the acquisition of raw materials to the delivery of finished goods to the the end consumer.
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Customer Relationship Management
What Is CRM? Why Is CRM Important? CRM Components and Technologies
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Enterprise Resources Planning
What Is ERP? Why ERP? The Major Players ERP Market Outlook
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Vendor Managed Inventory
Wal-Mart and Procter & Gamble, Late 1980s Other companies in the United States, including Campbell Soup and Johnson & Johnson, and by European firms like Barilla (the pasta manufacturer). VMI became one of the key programs in the grocery industry’s pursuit of “efficient consumer response” and the garment industry’s “quick response.”
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Information Flow
Products or services usually flow from supplier to to customer. Design and demand information usually flow from customer to supplier.
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An Illustration of the Bullwhip Effect
Source: Johnson & Pike, 1999
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Mitigating the Bullwhip Effect
“Supply Chain Management Primer,”
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What is Supply Chain Management?
Management of flow of materials, information, and funds across the entire supply chain.
The supplier monitors the buyer’s inventory levels (physically or via electronic messaging) and makes periodic resupply decisions regarding order quantities, shipping, and timing. Transactions customarily initiated by the buyer (like purchase orders) are initiated by the supplier instead. The purchase order acknowledgment from the supplier may be the first indication that a transaction is taking place; an advance shipping notice informs the buyer of materials in transit.
Everyday low pricing eliminate forward buying of bulk orders Changes in pricing and trade promotions and channel initiatives, such as VMI, CPFR, continuous replenishment can significantly reduce demand variance. Postponement Etc.