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Supply Chain

Management
Jossey Menswear
By

Gunawan AS
Endang Kusnandar
Dyah
Mahardhika
To Accompany Russell and Taylor, Operations Management, 4th Edition,

2003 Prentice-Hall, Inc. All rights reserved.

Outline

The management of supply chains


Key Element Of Supply Chain
Jossey Menswear Supply Chain
Conclusion

WHAT IS SUPPLY CHAIN MANAGEMENT


" Is the strategic management of activities involved in
the acquisition and conversion of materials to finished
products delivered to the customer"

Supplier
Management

Schedule /
Resources

Material Flow
Information Flow

Conversion

Stock
Deployment

Customer
Management

Delivery

Leads to Business Process Integration

Supply chain is the system by which


organizations source, make and deliver
their products or services according to
market demand.
Supply chain management operations
and decisions are ultimately triggered
by demand signals at the ultimate
consumer level.
Supply chain as defined by
experienced practitioners extends
from suppliers to customers.

The Supply Chain


Information
Suppliers

Producers

Distributors

Customers

Materials,
parts, subassemblies,
and
services

Finished
goods, end
products
and services

Package
and delivery

Total
satisfaction
with quality,
price,
delivery, and
service

Inventory

Products
and
Services

Products
and
Services

Inventory

Inventory

Cash

Products
and
Services

Losing Sight of the Common


Objective
I'm glad that the hole
is not on our side!

Typical Supply Chain for a


Manufacturer
Supplier
Supplier
Supplier

Storage

Mfg.

Storage

Dist.

Retailer

Customer

Typical Supply Chain for a Service


Supplier

Supplier

Storage

Service

Customer

Supply chain Ilustration

Supply Chain Illustration


10-9

Supply Chain Management


A total system approach to managing the entire flow of
information, materials, and services from raw-material
suppliers through factories and warehouses to the end
user (planning, organizing, directing and controlling flows
of materials)
Encompasses all activities associated with the flow and
transformation of goods and services from raw materials
to the end user, the customer

Goals of Supply Chain Management


(1 of 2)
Synchronization of activities required to achieve
maximum competitive benefits
Coordination, cooperation, and communication and
timing among SC members
Ensuring rapid flow of information among members

Goals of Supply Chain Management


(2 of 2)
Linking the market, distribution channels, processes and
suppliers so that market demand is met as efficiently as
possible across the chain
Matching supply and demand at each stage of the chain
Ultimate goal: Achieving customer satisfaction

The steps involved


Step1- Designing the supply chain
Determine the supply chain network
Identify the levels of service required

Step 2 - Optimizing the supply chain


Determine pathways from suppliers to
the end customer

Customer markets to Distribution centers


Distribution centers to production plants
Raw material sources to production plants
Identify constraints at vendors, plants and
distribution centers
Get the big picture
Plan the procurement, production and
distribution of product groups rather than
individual products in large time periodsquarters or years

Step 3- Material flow planning


Determine the exact flow and timing of
materials
Arrive at decisions by working back from
the projected demand through the supply
chain to the raw material resources
Techniques
ERP

Step 4 - Transaction processing and


short term scheduling
Customer orders arrive at random
This is a day to day accounting system which
tracks and schedules every order to meet
customer demand
Order entry, order fulfillment and physical
replenishment

Strategic or Operational
Two types of decisions in supply chain management
Strategic design and policy
Operational day-to-day activities

Functions and Activities Involved in SCM


Forecasting
Scheduling
Purchasing
Inventory management
Information management
Quality assurance
Production and delivery
Logistics
Customer service

Key Elements of SCM


Strategic Issues
Tactical Issues
Operating Issues

Strategic Issues
Design of Supply Chain
Selection of supply chain members,
locations, outsourcing decisions, etc
Strategic Alliance
Alliance conceptualization
Alliance pursuance
Alliance confirmation
Alliance implementation

Tactical Issues
Strategies and policies on inventories,
purchasing, transportation, quality, etc.
Design of supply chain information systems
Inter-organizational information systems
Intra-organizational information system

What Are the Inter-Organizational


Information Systems?

What Are the Inter-Organizational


Information Systems?
Internet
Extranet
Electronic Data Interchange
(EDI)
Satellite systems
SCM software systems

What Are the Intra-Organizational


Information Systems?

What Are the Intra-Organizational


Information Systems?
Intranet
Bar coding and scanners
RFID
Cable and wireless systems
ERP systems
Database and data warehouse systems

Operating Issues
External supply chain process mapping
and improvement
Business Process Reengineering
Benchmarking
Integrated logistics
Third-party logistics
Disintermediation
Reverse logistics

SUPPLY CHAIN ELEMENTS


Strategic

Tactical

Supply Chain Design


Resource Acquisition
Long Term Planning
(1 Year ++)

Production/ Distribution
Planning
Resource Allocation
Medium Term Planning
(Qtrly,Monthly)

Shipment Scheduling
Operational
Resource Scheduling
Short Term Planning (Weekly,Da

Elements of Supply Chain


Management
Element

Typical Issues

Customers

Determining what customers want

Forecasting

Predicting quantity and timing of demand

Design

Incorporating customer wants, mfg., and time

Processing

Controlling quality, scheduling work

Inventory

Meeting demand while managing inventory costs

Purchasing

Evaluating suppliers and supporting operations

Suppliers

Monitoring supplier quality, delivery, and relations

Location

Determining location of facilities

Logistics

Deciding how to best move and store materials

Factors That Contribute to the Increased


Need for Effective Supply Chain
Management:
improve operations
increased levels of outsourcing
increasing transportation costs
competitive pressures
increasing globalization
increasing importance of e-commerce
increasing complexity of supply chains
increasing pressure to decrease inventories

Benefits of Supply Chain Management


Lower inventories
Lower costs
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty
Integration of seperate organizations into a cohesive
operating system

What Are the Key Requirements for A


Successful Supply Chain?

Requirements for A
Successful Supply
Chain
Share goals and interests
Trust
Information sharing
Long-term commitment
Strong individual members

Global Supply Chain Problems


National and regional differences
Customs, business practices, and
regulations
Foreign markets are
not homogeneous
Quality can be a
major issue

Some Issues in Global Supply Chains


Language
Culture
Currency fluctuations
Political
Transportation costs
Local capabilities
Finance and economics
Environmental

Infrastructure Obstacles to Global


Trade
Some emerging markets lack suitable distribution
systems, i.e. roads, rail systems
Existing roads and
ports may be inadequate
Market instability,
political instability
Vertical integration is a common solution

Creating an Effective Supply Chain


1. Develop strategic objectives and tactics
2. Integrate and coordinate activities in the internal
supply chain
3. Coordinate activities with suppliers & with customers
4. Coordinate planning and execution across the supply
chain
5. Form strategic partnerships

Supply Chain Performance Drivers


1. Quality
2. Cost
3. Flexibility
4. Velocity
5. Customer service

Challenges to Optimizing SCs


Barriers to integration of organizations
Getting top management on board
Small businesses
Variability and uncertainty
Long lead times
Dealing with trade-offs

ABOUT JOSSEY MENSWEAR


Founded more than a century ago, and now part of
Amedox Fashion Retail division .
Design, Manufacturing and Merchandising functions
Operated in the mid-range fashion sector
Tailored products jackets, trousers and suits
David Jossey, Managing Director, Jossey Menswear.

JOSSEY MENSWEAR OVERVIEW


Market, demand and products
Supply chain management and quick
response
The Cornwall plant
Forming the teams
The payment system barrier
Not everyone liked the changes
Measuring supply chain performance
The future

Market, demand and products

Products

Supply chain for Trousers

Supply Chain Management Strategy


Build Quick Response Team
The Quick Response (QR) approach
improves the manufacturing of the jacket
and trouser assembly in the plant
Payment system and supply chain
performance
Individuals were moved towards team
working system.
30 percent of the factory resources
assembly was converted to quick response
(QR)

Supply Chain Strategy


Additional Plant ( Cornwall Plant )
Production Increasing (from 1200 suit
equivalents (SE) to 1900 suit equivalents
(SE) per week
Improving limited factory space, a rigid
payment system, limited skills flexibility
and specialist machinery
Two QR teams were made, one for the
jacket assembly and other for the trouser
assembly

Supply Chain Strategy


Collaboration With Supplier
Work on cloth development with suppliers.
Understanding which characteristics of a
cloth make it more or less machinable
Improve lead times and Availabilty of cloth
Manpower
Payment Improvement ( Basis vs
Competency )
Competency Development

Q and A