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Lecture Supply chain management: A global perspective – Chapter 3: Network and system design

This chapter includes contents: The supply chain system, understanding processes: theory of constraints (TOC), integration of supply chain processes, designing supply chain networks, enterprise resource planning (ERP). | Chapter 3 Network and System Design 3-1 Lecture Outline 3-2 The Supply Chain System Understanding Processes: Theory of Constraints (TOC) Integration of Supply Chain Processes Designing Supply Chain Networks Enterprise Resource Planning (ERP) Copyright 2011 John Wiley & Sons, Inc. The Supply Chain System 3-3 A supply chain can be viewed as a system of processes that cut across organizations and deliver customer value, rather than as a series of separate organizations and functions. Copyright 2011 John Wiley & Sons, Inc. Processes Across the Supply Chain Network and information technology (IT) design support supply chain strategy for the system 3-4 Copyright 2011 John Wiley & Sons, Inc. Supply Chain Strategy SC Network Design IT Design Processes Across the Supply Chain Continued Supply Chain Strategy long-range plan for the system Supply Chain Network Design design of the network structure and business process Information Technology (IT) Design enables data sharing, communication, and . | Chapter 3 Network and System Design 3-1 Lecture Outline 3-2 The Supply Chain System Understanding Processes: Theory of Constraints (TOC) Integration of Supply Chain Processes Designing Supply Chain Networks Enterprise Resource Planning (ERP) Copyright 2011 John Wiley & Sons, Inc. The Supply Chain System 3-3 A supply chain can be viewed as a system of processes that cut across organizations and deliver customer value, rather than as a series of separate organizations and functions. Copyright 2011 John Wiley & Sons, Inc. Processes Across the Supply Chain Network and information technology (IT) design support supply chain strategy for the system 3-4 Copyright 2011 John Wiley & Sons, Inc. Supply Chain Strategy SC Network Design IT Design Processes Across the Supply Chain Continued Supply Chain Strategy long-range plan for the system Supply Chain Network Design design of the network structure and business process Information Technology (IT) Design enables data sharing, communication, and process synchronization 3-5 Copyright 2011 John Wiley & Sons, Inc. What is a Business Process? A business process is a structured set of activities or steps with specified outcomes processes involve many organizational functions every process has structural and resource constraints limiting output 3-6 Copyright 2011 John Wiley & Sons, Inc. Theory of Constraints The Theory of Constraints (TOC) was introduced by Dr. Eliyahu Goldratt in his book The Goal Premise of TOC every system has at least one constraint Objective identify the constraint and restructure the organization to eliminate its impact 3-7 Copyright 2011 John Wiley & Sons, Inc. System Constraints A system cannot produce more than its constraining activity which is sometimes called the “bottleneck” Output is related to how system activities are linked Activities can be linked: serially in parallel 3-8 Copyright 2011 John Wiley & Sons, Inc. Serial Process Example 3-9 Copyright 2011 John Wiley & Sons, Inc. Consider the following