CHAPTER2
SupplyChainManage ment
Supply Chain Management
2-2
The integration of key business processes from end user through original suppliers, that provides products, services, and information that add value for customers and other stakeholders.
Supply Chain Business Processes
Source: Douglas M. Lambert, Martha C. Cooper, Janus D. Pagh, “Supply Chain Management: Implementation Issues and Research Opportunities”, The International Journal
Tier 1 Customers
Tier 2 Customers
Types of Business Process Links 2-6
• Managed Process Links • Monitored Process Links • Not-Managed Process Links • Nonmember Process Links
McGraw-Hill/Irwin
Tier 3 to n customers Consumers / End-Customers
Supply Chain Network Structure 2-4
Tier 3 to Initial
suppliers
Tier 2 Suppliers
1 2
n
1
n
1 2 3
n
1
n
Focal Company
Types of Inter-company
2-7
Business Process Links
Tier 3 to Initial
suppliers
Tier 2 Suppliers
Tier 1 Suppliers
1
2
n
1
1
n
2
1
2
3
3
n
n
1
n
Managed Process Links Monitor Process Links Not-Managed Process Links Non-Member Process Links
Information Flow
Tier 2 Supplier
Tier 1 Supplier
Manufacturer
Purchasing Production
Logistics
Marketing & Sales
PRODUCT FLOW
R&D
Finance
CUSTOMER RELATIONSHIP MANAGEMENT
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Elements and Key Decisions 2-5
2. What processes should be linked with each of these key supply chain members?
McGraw-Hill/Irwin
1. Who are the key supply chain members with whom
to link processesl Companies, Inc. All rights reserved.
McGroafwL-oHgiilslt/icIrswMinanagement, Vol. 9, No. 2, 1998, p. 2.
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Initial Suppliers Tier 3 to n suppliers
Tier 1 Suppliers
1 2 3
n
Tier 1 Customers
1 2
n
Tier 2 Customers
1 2
n
1
n
1 2
n
Members of the Focal Company’s Supply Chain
Tier 3 to Consumers/ End-Customers
McGraw-Hill/Irwin
Supply chain business processes
Supply chain management components
Supply chain network structure
3. What level of integration and management should be applied or each process link?
Customer
Consumer/ End-user
CUSTOMER SERVICE MANAGEMENT
DEMAND MANAGEMENT
ORDER FULFILLMENT
MANUFACTURING FLOW MANAGEMENT
PROCUREMENT
PRODUCT DEVELOPMENT AND COMMERCIALIZATION RETURNS
McGraw-Hill/Irwin
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
SUPPLY CHAIN MANAGEMENT 2-3
Integrating and Managing Processes Across the Supply Chain
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Initial Suppliers Tier 3 to n suppliers
Tier 3 to n customers Consumers / End-Customers