In this chapter, the learning objectives are: Describe the three components and the three flows of a supply chain, identify popular strategies to solving different challenges of supply chains, explain the utility of each of the three major technologies that support supply chain management. | 13 Supply Chain Management Supply Chains Supply Chain Management Information Technology Support for Supply Chain Management Describe the three components and the three flows of a supply chain. Identify popular strategies to solving different challenges of supply chains. Explain the utility of each of the three major technologies that support supply chain management. Munchery How does Munchery’s supply chain benefit from the simple decision to off er chilled rather than hot meals? What role do information systems play in the communication of information from the ingredients to the table? Supply Chains The Structure and Components of Supply Chains 5 Figure : Generic Supply Chain The Structure and Components of Supply Chains Three Segments of the Supply Chain Tiers of Suppliers The Flows of the Supply Chain 7 Three Segments of the Supply Chain Upstream Internal Downstream 8 Three Flows of the Supply Chain Material Flows Reverse Flows Information Flows Financial Flows 9 Supply Chain Management (SCM) Five Basic Components of SCM Supply Chain Management Systems The Push Model Versus the Pull Model Problems Along the Supply Chain Solutions to Supply Chain Problems 10 Five Basic Components of SCM Plan Source Make Deliver Return 11 Apple Deals with Supply Chain Strain and Faulty Parts Discuss the importance of forecasting demand for supply chain planning. Explain how a defective component can disrupt the flow of materials through a supply chain and the impact that disruption will have on various entities upstream and downstream along the supply chain. ABOUT BUSINESS Push versus Pull Model Problems Along the Supply Chain Two Primary Sources of Problems Along the Supply Chain: Uncertainties The need to coordinate multiple activities, internal units, and business partners. Demand Forecast Bullwhip Effect 14 Figure : The Bullwhip Effect Solutions to Supply Chain Problems Using Inventories to Solve Supply Chain Problems Vertical Integration Just-In-Time Inventory Information Sharing Vendor-Managed Inventory (VMI) 16 IT Support for Supply Chain Management Electronic Data Interchange (EDI) Extranets Portals and Exchanges 17 Figure : Purchase Order Fulfillment without EDI Figure : Purchase Order Fulfillment with EDI Electronic Data Interchange (EDI): Benefits Minimizes data entry errors Length of the message can be shorter Messages are secured Reduces cycle time Increases productivity Enhances customer service Minimizes paper usage and storage 20 Electronic Data Interchange (EDI): Disadvantages Business processes sometimes must be restructured to fit EDI requirements Many EDI standards in use today 21 Extranet A Company and Its Dealers, Customers, or Suppliers Industry Extranet Joint Ventures and Other Business Partnerships 22 Figure : The Structure of an Extranet Caribou Coffee Brews a Strong Supply Chain Discuss the diff iculties involved in the supply chain for any perishable item. Describe the complex issues Caribou Coff ee dealt with to ensure their supply chain was not only Rainforest Alliance Certified but also meeting their business needs. ABOUT BUSINESS Portals and Exchanges Procurement Portal Distribution Portal 25
