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Introduction
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Outline
Qu'est-ce que la gestion de la chaîne
d'approvisionnement ?
Un cadre stratégique pour la chaîne
d'approvisionnement
Les composantes d'une SCM
Principaux obstacles et problèmes courants
Seven Eleven Japon
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Vue traditionnelle : Les chaînes
d'approvisionnement dans l'économie (1990, 1996)
Profit
Profit 10%
Supply Chain
Cost
Supply Chain Cost 20% Marketing
Cost
Les efforts consacrés aux activités de la chaîne d'approvisionnement sont invisibles pour les clients.
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Que peut faire la gestion de la chaîne
d'approvisionnement ?
On estime que le secteur de la distribution pourrait économiser 30 milliards de
dollars (10 % des coûts d'exploitation) en utilisant des stratégies efficaces en
matière de logistique et de chaîne d'approvisionnement.
– Une boîte de céréales typique passe 104 jours de l'usine à la vente.
– Une voiture typique met 15 jours entre l'usine et le concessionnaire.
– Une rotation plus rapide des marchandises est préférable ?
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Ampleur de la gestion de la chaîne
d'approvisionnement
Compaq estime avoir perdu entre 0,5 et 1 milliard de
dollars de ventes en 1995 parce que les ordinateurs
portables n'étaient pas disponibles quand et où on en avait
besoin.
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Valeur générée par SCM
Upstream
Downstream
The right
Product
+ + + + +
The right
Price
The right
Store
The right
Quantity
The right
Customer
The right
Time
= Higher
Profits
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Detergent supply chain:
Chemical
Plastic cup Tenneco
manufacturer
Producer Packaging
(e.g. Oil Company)
Chemical
Paper Timber
manufacturer
Manufacturer Industry
(e.g. Oil Company)
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Flows in a Supply Chain
Material
Information
Supplier Customer
Funds
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SCM in a Supply Network
La gestion de la chaîne d'approvisionnement (GCA) concerne la gestion et le contrôle
des flux de matières, d'informations et de finances dans les chaînes d'approvisionnement
Cash
Products and Services
Information
THAILAND INDIA MEXICO TEXAS US
N-Tier Suppliers Suppliers Logistics Distributors Retailers
Supply
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Importance de la gestion de la chaîne
d'approvisionnement
En 2000, les entreprises américaines ont dépensé 1 000 milliards de dollars
(10 % du GNP) pour des activités liées à l'approvisionnement (déplacement,
stockage et contrôle des produits dans les chaînes d'approvisionnement). Source:
State of Logistics Report
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A Generic Supply Chain
Sources: Regional Field Customers,
plants Warehouses: Warehouses: demand
vendors stocking stocking centers
ports points points sinks
Supply
Inventory
Purchase Inventor
y
Transportation
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Vue cyclique des chaînes d'approvisionnement
Customer
Customer Order
Cycle
Retailer Any cycle
Replenishment Cycle 0. Arrivée du client
1. Le client déclenche une commande
2. Le fournisseur exécute la commande
Distributor 3. Le client reçoit la commande
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier
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Push vs Pull System
Qu'est-ce qui déclenche le mouvement de travail dans le système ?
Dans les systèmes Push, la libération du travail est basée sur les
prévisions de la demande en aval.
– Conserver les stocks pour répondre à la demande réelle
– Agit de manière proactive
Dans les systèmes Pull, le lancement du travail est basé sur la
demande réelle ou le statut réel des clients en aval.
– Peut entraîner de longs délais de livraison
– Agit de manière réactive
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Push/Pull View of Supply Chains
Procurement, Customer Order
Manufacturing and Cycle
Replenishment cycles
Customer
Order Arrives
Push-Pull boundary
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Examples of Supply Chains
Dell / Compaq : achète certains composants d'un produit
auprès de ses fournisseurs après l'achat de ce produit par
un client. Cas extrême d'un processus tiré
Toyota / GM / Volkswagen
McMaster Carr / W.W. Grainger, sell auto parts
Amazon / Barnes and Noble
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Stratégie SCM
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Mission-Stratégie-Tactique-Décisions
Mission, Mission statement
– The reason for existence of an organization
Strategy
– A plan for achieving organizational goals
Tactics
– The actions taken to accomplish strategies
Operational decisions
– Day to day decisions to support tactics
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Life Strategy for Ted
Ted is an undergrad. He would like to have a career in business, have
a good job, and earn enough income to live comfortably
New Marketing
Product and Operations Distribution Service
Development Sales
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Achieving Strategic Fit: Consistent SCM
and Competitive strategies
Fit SC to the customer
High
Efficiency frontier
Inefficiency Region
Low
Responsive
(high cost)
Gourmet dinner
supply chain
<High margin>
Responsivenes e of it
n F
spectrum Zo egic
at
r
St
Lunch buffet
<Low margin>
Efficient
(low cost)
supply chain
Certain Implied Uncertain
demand uncertainty demand
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Loosing the strategic fit: Webvan
Webvan started a merger with HomeGrocer in Sept 2000 and
completed in May 2001.
Declared bankruptcy in July 2001. Why?
– “Webvan was so behemoth that could deliver anything to anyone anywhere
that it lost sight of a more mundane task: pleasing grocery customers day
after day”.
– Short to midterm cash mismanagement. Venture capital of $1.2 B run out.
– Merger costs: duplicated work force, integration of technology, realignment
of facilities.
Peapod has the same business model but more focused in terms of
service and locations. It actually survives with its parent company
Royal Ahold’s (Dutch Retailer) cash.
– Delivers now at a fee of $6.95 within a day.
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Top 10 Retailers Reported in 2008 – First 4
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Big retailers’ Strategy
Wal-Mart: Efficiency
Target: More quality and service
Carrefour: International, ambiance
K-Mart: Confused.
– Squeezed between Target and Wal-Mart
– Reliance on coupon sales
– Do coupons stabilize or destabilize a Supply chain?
K-Mart and Sears merged in November 2004.
Now called Sears Holdings.
» K-Mart gets cash
» Sears gets presence outside malls
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Other Factors
Multiple products in a SC. Multiple customers for a given product
– Separate supply chains or Tailored supply chains
» e.g. Barnes and Noble: Retailing and/or e-tailing
– Product and/or customer classes
» e.g. UTD library loans books for 6 months (2 weeks) to faculty (students)
» Customer segmentation by pricing
Competitors: more, faster and global
» UTD online programs compete globally
Product life cycle (shortening)
– SCM strategy moves toward efficiency and low implied uncertainty as products age
» e.g. Air travel is becoming more efficient
e.g. Southwest airlines lead the drive for efficiency
e.g. Airbus announced A380 accommodating 555-800 people on Jan 17, 2005.
» e.g. Flat screen TV producer of AU Optronics of Taiwan was looking for ways to make its
SC more efficient in June 2004.
– Replacement sales
» Selling to replace broken units.
e.g. AC replacement is about 50% of the market.
– Macroeconomic factors for visibility
» Forecasting Home Depot sales from S&P 500 price index.
Positive correlation is detected. 33
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Achieving Strategic Fit over a Lifecycle
Responsive
(high cost)
supply chain
e of it
n F
Zo egic
at
r
St
Efficient
(low cost)
supply chain
Certain Uncertain
demand demand
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Integration
Integration is the central theme in SCM
Building synergies by integrating business functions,
departments and companies
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Strategic Scope
Suppliers Manufacturer Distributor Retailer Customer
Competitive
Strategy
Product Dev.
Strategy
Supply Chain
Strategy
Marketing
Strategy
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Supply Chain Drivers and Obstacles
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Drivers of Supply Chain Performance
How to achieve
Efficiency Responsiveness
Logistical
Inventory Transportation Facilities
Drivers
Cross-
Information Sourcing Pricing Functional
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Drivers 38
1. Inventory
Convenience: Cycle inventory
– No customer buys eggs one by one
Unstable demand: Seasonal inventory
– Bathing suits
– Xmas toys and computer sales
Randomness: Safety inventory
– 20% more syllabi than the class size were available in the
first class
– Compaq’s loss in 95
Pipeline inventory
– Work in process or transit
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Little’s law
Long run averages = Expected values
I=R.T
I=Pipeline inventory;
R=output per time=throughput;
T=delay time=flow time
10/minute
Spend 1 minute
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3. Facilities
Production
– Flexible vs. Dedicated
– Flexibility costs
» Production: Remember BMW: “a sports car disguised as a sedan”
» Service: Can your instructor teach music as well as SCM?
» Sports: A playmaker who shoots well is rare.
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Characteristics of the Good Information
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Quality of Information
Information drives the decisions:
– Good information means good decisions
IT helps: MRP, ERP, SAP, EDI
Relevant information?
How to use information?
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Information Technology in a Supply
Chain: Legacy Systems
Strategic
Planning
Operational
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Information Technology in a Supply Chain:
ERP Systems
Strategic
Planning
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Information Technology in a Supply Chain:
Analytical Applications
Strategic
SCM
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ERP Systems
Wider focus
Push (MRP) versus Pull (demand information transmitted
quickly throughout the supply chain)
Real-time information
Coordination and Information sharing
Transactional IT
Expensive and difficult to implement
– About 25% of ERP installations are cancelled within a year
– About 70% of ERP installations go over the budget
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IT Push
500
400
300
200
100
0
1965 1973 1981 1989 1997
IT investment($B)
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Supply Chain Software Push
See Top 100 under /articles.html
Source Kanakamedala,
Ramsdell, Srivatsan (2003).
McKinsey Quarterly, No 1.
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5. Sourcing
Role in the supply chain
– Set of processes required to purchase goods and services in a supply chain
– Supplier selection, single vs. multiple suppliers, contract negotiation
Role in the competitive strategy
– Sourcing is crucial. It affects efficiency and responsiveness in a supply chain
– In-house vs. outsource decisions- improving efficiency and responsiveness
» TI: More than half of the revenue spent for sourcing.
» Cisco sources: Low-end products (e.g. home routers) from China.
Components of sourcing decisions
– In-house versus outsource decisions
– Supplier evaluation and selection
– Procurement process:
» Every department of a firm buy from suppliers independently, or all together.
EDS to reduce the number of officers with purchasing authorization.
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6. Pricing
Role in the supply chain
– Pricing determines the amount to charge customers in a supply chain
– Pricing strategies can be used to match demand and supply
» Price elasticity: Do you know yours?
Role in the competitive strategy
– Use pricing strategies to improve efficiency and responsiveness
– Low price and low product availability; vary prices by response times
» Amazon: Faster delivery is more expensive
Components of pricing decisions
– Pricing and economies of scale
– Everyday low pricing versus high-low pricing
– Fixed price versus menu pricing, depending on the product and services
» Packaging, delivery location, time, customer pick up
» Bundling products; products and services
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Considerations for Supply Chain Drivers
Driver Efficiency Responsiveness
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Major Obstacles to Achieving Fit
SC is big:
– Variety of products/services
– Spoiled customer
– Multiple owners (Procurement, Production, Inventory,
Marketing) / multiple objectives
– Globalization
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Major obstacles to achieving fit
Instability and Randomness:
– Increasing product variety
– Shrinking product life cycles
– Customer fragmentation: Push for customization, segmentation
– Fragmentation of Supply Chain ownership: Globalization
Increasing implied
uncertainty
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Common problems
Lack of relevant SCM metrics: How to measure
responsiveness?
» How to measure efficiency, costs, worker performance, etc?
Poor inventory status information
» Theft: Major problem for furniture retailers.
» Transaction errors: Retailers with inaccurate inventory records
for 65% of SKUs
» Information delays, dated information, incompatible info. systems
» Misplaced inventory: 16% of items cannot be found at a major retailer
» Spoilage: active ingredients in the products are losing their properties
» Product quality and yield
» Lack of visibility in SCs
Do you know the inventory your distribution centers hold?
Do you know the inventory your fellow retailer holds?
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Common problems
Poor delivery status information
» Not knowing the order status
Poor IT design
» Unreliable, duplicate data
» Security problems: too much or too little
Ignoring uncertainties
– “The flight from uncertainty and ambiguity is so motivated that we often
create pseudocertainty.”
– Nitin Nohra, HBR February 2006 issue, p.40.
Internal customer discrimination
» Giving lower priority to internal customers than external customers
Poor integration
Elusive inventory costs
» Accounting systems do not capture opportunity costs
SC-insensitive product design
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Summary
Supply Chain Introduction
Competitiveness / Business strategy / SCM strategy
Components
» Inventory, Transportation, Facilities, Information, Sourcing, Pricing
Challenges
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Seven Eleven Japan (SEJ)
A Case Study
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Factual Information on Seven Eleven Japan (SEJ)
Largest convenience store in Japan with market value of $95 B. The third largest
retail company in the world after Wal-Mart and Home Depot.
Established in 1974.
In 2000, total sales $18,000 M, profit $620 M.
Average inventory turnover time 7-8.5 days.
Stock value increased by 3000 times from 1974 to 2000.
In 1985, there were 2000 stores in Japan, increasing by 400-500 per year.
Return on equity 14% over 2000-2004.
A SEJ store is about the half the size of a US 7-eleven store,
that is about 110 m2.
Sales:
– Products
» 32.9% Processed food: drinks, noodles, bread and snacks
» 31.6% Fast food: rice ball, box lunch and hamburgers
» 12.0% Fresh food: diary products
» 25.3% Non-food: magazines, ladies stockings and batteries.
– Services: Utility bill paying, installment payments for credit companies, ATMs, photocopying
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More on SEJ
More factual info:
Average sales about twice of an average US store
SKU’s offered in store: Over 3,000 (change by time of day, day of week, season)
Virtually no storage space
No food cooking at the stores
SC strategy:
Micro matching of supply and demand (by location, time of day, day of week, season)
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Seven Eleven - Number of Stores
1999: 8,027
6000 2004: 10,356
5000
4000
2000
1000
0
85 86 87 88 89 90 91 92 93 94
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Seven Eleven - Net Sales (B Yen)
Sales 1,963 B Yen in 2000
1400
1200
1000
800
Net Sales
600
400
200
0
85 86 87 88 89 90 91 92 93 94
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Seven Eleven - Pre tax Profit (B Yen)
100
90
80
70
60
50 Profit
40
30
20
10
0
85 86 87 88 89 90 91 92 93 94
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Seven Eleven - Inventory turnover (days)
14
12
10
8
Inventory
6
4
2
0
85 86 87 88 89 90 91 92 93 94
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Information Strategy
Quick access to up to date information (as opposed to data):
In 1991, SEJ implemented Integrated Service Digital Network to link stores, headquarter,
DCs and suppliers
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Information Analysis of POS Data
Analysis of
– Sales for product categories over time
– SKU (stock keeping unit)
– Waste or disposal
– 10 day (or week) sales trend by SKU
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Deloitte 2008 Global Retailers Survey
Excerpts from
www.deloitte.com/dtt/cda/doc/content/dtt_2008globalpowersofretailing.pdf
Downloaded on Jan 30, 2008.
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