Business Processes in Logistics and
Supply Chain Management (Part II)
Online course
University of Colorado Denver
Order Fulfillment Process
 To design a network and a process that
permits a firm to meet customer requests while
minimizing the total delivered cost
 A key process in managing the supply chain
and is the first step in providing customer
service
Issues Associated with Order
Fulfillment
 Reorder cycle time
 Efficiency of order fulfillment process
 Lateness
 Lead time
 Severity
 Responsiveness
 Fulfillment software vs service
Manufacturing Flow Management
Process
 To obtain, implement, and manage
manufacturing flexibility in the supply chain
and to move products through the plants
 To make a variety of products in a timely
manner at the lowest possible cost and
respond to changes in demand
Issues Associated with Manufacturing
Flow Management
 Distribution
 Outsourcing and partnerships
 Transportation
 Inventory
 Warehousing
 Measuring performance
 Profitable vs unprofitable
Product Development and
Commercialization Process
 To provide structure for developing and
bringing to market new products jointly with
customers and suppliers
 To coordinate the efficient flow of new products
across the supply chain and assist supply chain
members with the ramp-up of manufacturing,
logistics, marketing and other related activities
to support the commercialization of the
product
Issues Associated with Product
Development and Commercialization
 Technology to accelerate the process
 System innovation to improve the process
 Global resource management and knowledge
integration
 Project management for flawless execution
Returns Management Process
 To manage the reverse product flow efficiently
within the firm and across key members of the
supply chain
 To identify opportunities to reduce unwanted
returns
 To control reusable assets such as containers.
Issues Associated with Returns
Management
 Technology to support return management
 Oracle Retail Returns Management
 Management challenge of reverse logistics
 Monitor the entire flow of request
 Respond quickly and efficiently to any
customer or supplier request
 Track improvement actions
 Anticipate future incidents and avoid
recurring problems
Case Study : IBM’s Global Supply
Chain System
“Supply chain was about cost-cutting and
functional excellence within the business
units,” says Patrice Knight, IBM’s vice
president for business transformation and
strategy, which is part of an organization
created in 2002 called Integrated Supply
Chain. “There were no common processes, let
alone client-facing processes. That has all
changed.”
IBM’s Strategy
 To span the company, its suppliers and
partners, and then tied it all together with
shared measurements to ensure success at
both the business unit and IBM level.
 To integrate end-to-end across the company
and with key partners, suppliers and
customers–can respond with flexibility and
speed to any customer demand, market
opportunity or external threat
Key Goals of IBM Integrated Global
Supply Chain
 To measure success in customer satisfaction
and creation of shareholder value
 To build competitive advantage in
productivity, efficiency, cost, quality,
responsiveness and cash management
 To deliver a “superior end-to-end customer
experience”
 To execute with speed and urgency through
simplified processes
 To demonstrate IBM’s leadership in “ebusiness on demand” while being recognized
as the industry’s supply-chain leader
 To develop employee skills under the auspices
of an integrated team
How did research help IBM ?
 To set up center for On Demand Supply Chain
Research and Partners with three universities
 To extend research through computing Grid to
conduct joint applied research and teaching
The Outcomes
 96 percent of purchasing transactions became
“hands-free,” saving more than $430m in 2002
 Connected up with some 33,000 suppliers via
the internet
 Reduced the time for contract writing from
between six and 12 months to just 30 days
Discuss the following questions:
 What problems do IBM address? How does
integrated global supply chain initiative help
solve these problems?
 What issues and challenges do global supply
chain strategy present? What can be done
to address these issues?
 What are the business as well as the
technology issues that should be addressed
when IBM integrated global supply chain?