IS 466
ADVANCED TOPICS IN
INFORMATION SYSTEMS
LECTURER : NOUF ALMUJALLY
17 – 10 – 2011
College Of Computer Science and Information, Information Systems Department
Objectives
2
•
Components of a Supply Chain
•
The Importance of Supply Chain Management
•
Supply Chain Strategies
•
SCM software
•
E-business and Supply Chain
•
Measuring Supply Chain Performance
3
Supply Chain Management
What is a Supply Chain?
4
•
•
A supply chain is the system of organizations,
people, activities, information and resources
involved in moving a product or service from
supplier to customer.
Supply chain activities transform raw materials and
components into a finished product that is delivered
to the end customer.
Supply Chain Management (SCM)
5
•
Supply Chain Management is




the design and management of processes
across organizational boundaries
with the goal of matching supply and demand
in the most cost effective way.
Supply
Demand
Mission impossible: Matching Supply and Demand
6
Supply
Chain for
Denim
Jeans
7
Supply
Chain for
Denim
Jeans
(cont.)
8
Components of a Supply Chain
9
•
External Suppliers– source of raw material
•
•
•
•
Tier one supplier supplies directly to the processor
Tier two supplier supplies directly to tier one
Tier three supplier supplies directly to tier two
Internal Functions include – processing functions
•
Processing, purchasing, planning, quality, shipping
Components of a Supply Chain
10
•
External Distributors transport finished products to
appropriate locations
•
Logistics managers are responsible for managing the
movement of products between locations. Includes;
•
traffic management – arranging the method of shipment for
both incoming and outgoing products or material
•
distribution management – movement of material from
manufacturer to the customer
The Importance of Supply Chain Management
11
•
Dealing with uncertain environments – matching supply
and demand
•
U.S Surgical Corporation announced a $22 million loss in
1993 due to “larger than anticipated inventories on the
shelves of hospitals”
•
Hewlett-Packard and Dell found it difficult to obtain
important components for its PC’s from Taiwanese
suppliers in 1999 due to a massive earthquake
The Importance of Supply Chain Management
12
•
•
Better information sharing among the partners
The growth of technologies such as the Internet
enable greater collaboration between supply chain
trading partners
•
•
If you don’t do it, your competitor will
Availability of SCM technologies on the market
•
Firms have access to multiple products (e.g., SAP, Baan,
Oracle, JD Edwards) with which to integrate internal
processes
Top 25
Supply Chains
•
The Top 25 supply chains report
comes out in Novembers.
•
The table on the right-hand side is
from The Second Annual Supply
Chain Top 25 prepared by Kevin
Riley and Released in November
2005.
13
Dell Computer
14
•
•
•
Classic case in supply chain management.
Established in 1984, Dell experienced supply
problems in 1993 and thereupon completely
redesigned its supply chain process along the lines of
what its founder, Michael Dell, called the “direct”
model.
Between 1993 and 1998, Dell's earnings grew at 65
percent per year.
Dell Computer (con.)
15
•
Dell's supply chain redesign was based on the following
elements:
•
First, Dell sells directly to customers, eliminating the wholesaler and
retailer.
•
Second, Dell also takes advantage of new information technologies in
their communications with suppliers who can access Dell's component
inventories, production plans, and forecasts in real time and thus keep
their production exactly matched to Dell's needs.
•
Third, Dell maintains absolute minimum inventory levels at every stage
of production, averaging 4 days overall
Supply chain strategies
16
•
Various supply chain strategies
• Push strategies
• Pull strategies
• Push-pull systems
PushPull
Boundary
Push Strategy
Pull Strategy
Raw
Materials
Supply chain time line
End
Customer
Push-Pull Systems
17
•
•
A push–pull system in business describes the
movement of a product or information between two
subjects.
On markets
•
•
The consumers usually “pulls” the goods or information
they demand for their needs,
The suppliers "pushes" them toward the consumers.
Push-Pull Systems
18
PushPull
Boundary
Push Strategy
Pull Strategy
Raw
Materials
Supply chain time line
End
Customer
Push-pull systems
19
•
A supply chain is often described in terms of push
or pull systems.
•
A push process is forecast driven and executed in
anticipation of demand => Push-Based Supply Chains
•
A pull process is demand driven and is initiated in
response to real demand => Pull-Based Supply Chains
•
The interface between these stages is called the
push –pull boundary
SCM Software
20
•
Enterprise Resource Planning (ERP)
•
•
•
software that integrates components of a company by
sharing and organizing information and data
SAP was first ERP software
mySAP.com
•
web enabled modules that allow collaboration between
companies along the supply chain
Extended ERPs (1990s)
21
•
•
During the 1990s ERP vendors added more modules
and functions as “add-ons” to the core modules
giving birth to the “extended ERPs.”
These ERP extensions include advanced planning
and scheduling (APS), E-business solutions such as
customer relationship management (CRM) and
supply chain management (SCM).
Core and Extended ERP Components
22
•
•
Core components – support primary internal activities
Extended components – support primary external activities
E-business and Supply Chain
23
•
What does internet change for a supply chain?
•
Enables a whole new business model.
•
•
•
•
•
•
•
Online purchasing, direct shipping, auctioning
Cost savings and price reductions
Gaining a wider presence and increased visibility for
companies
Greater choices and more information for customers
Improved service as a result of immediate accessibility to
services
Creation of virtual companies
Gaining global access to markets, suppliers, and distribution
channels
Measuring Supply Chain Performance
24
•
Key performance indicators
•
inventory turnover
•
•
inventory days of supply
•
•
cost of annual sales per inventory unit
total value of all items being held in inventory
Process Control
•
used to monitor and control any process in supply chain
Questions ??
25
What should you do this week ?
•
•
Review the lectures.
Do the Tutorial and submit it as hard copy
Due date: Saturday during the lecture.
•
•
•
•
Quiz result is online
If you have any question related to the assignment
please ask me during the tutorial, by email or during
the consultation hours.
Form the group and send it this week Please
My consultation hours: check the wiki