1、 2007 Pearson Education 1-1 Supply Chain Management (3rd Edition) Chapter 1 Understanding the Supply Chain 2007 Pearson Education 1-2 Traditional View: Logistics in the Economy (1990, 1996) Freight Transportation $352, $455 Billion Inventory Expense $221, $311 Billion Administrative Expense $27, $31
2、 Billion Logistics Related Activity 11%, 10.5% of GNP Source: Cass Logistics 2007 Pearson Education 1-3 Traditional View: Logistics in the Manufacturing Firm Profit 4% Logistics Cost 21% Marketing Cost 27% Manufacturing Cost 48% Profit Logistics Cost Marketing Cost Manufacturing Cost 2007 Pearson Ed
3、ucation 1-4 Supply Chain Management: The Magnitude in the Traditional View Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies A typical box of cereal spends 104 days from factory to sale A typical car spends 15
4、days from factory to dealership Laura Ashley turns its inventory 10 times a year, five times faster than 3 years ago 2007 Pearson Education 1-5 Supply Chain Management: The True Magnitude Compaq estimates it lost $.5 billion to $1 billion in sales in 1995 because laptops were not available when and
5、where needed When the 1 gig processor was introduced by AMD, the price of the 800 mb processor dropped by 30% P R = throughput; T = flow time Example Inventory and throughput are “synonymous” in a supply chain 2007 Pearson Education 3-73 Inventory: Role in Competitive Strategy If responsiveness is a
6、 strategic competitive priority, a firm can locate larger amounts of inventory closer to customers If cost is more important, inventory can be reduced to make the firm more efficient Trade-off Example 3.2 Nordstrom 2007 Pearson Education 3-74 Components of Inventory Decisions Cycle inventory Average
7、 amount of inventory used to satisfy demand between shipments Depends on lot size Safety inventory inventory held in case demand exceeds expectations costs of carrying too much inventory versus cost of losing sales Seasonal inventory inventory built up to counter predictable variability in demand co
8、st of carrying additional inventory versus cost of flexible production Overall trade-off: Responsiveness versus efficiency more inventory: greater responsiveness but greater cost less inventory: lower cost but lower responsiveness 2007 Pearson Education 3-75 Transportation Role in the supply chain R
9、ole in the competitive strategy Components of transportation decisions 2007 Pearson Education 3-76 Transportation: Role in the Supply Chain Moves the product between stages in the supply chain Impact on responsiveness and efficiency Faster transportation allows greater responsiveness but lower effic
10、iency Also affects inventory and facilities 2007 Pearson Education 3-77 Transportation: Role in the Competitive Strategy If responsiveness is a strategic competitive priority, then faster transportation modes can provide greater responsiveness to customers who are willing to pay for it Can also use
11、slower transportation modes for customers whose priority is price (cost) Can also consider both inventory and transportation to find the right balance Example 3.3: Laura Ashley 2007 Pearson Education 3-78 Components of Transportation Decisions Mode of transportation: air, truck, rail, ship, pipeline
12、, electronic transportation vary in cost, speed, size of shipment, flexibility Route and network selection route: path along which a product is shipped network: collection of locations and routes In-house or outsource Overall trade-off: Responsiveness versus efficiency 2007 Pearson Education 3-79 In
13、formation Role in the supply chain Role in the competitive strategy Components of information decisions 2007 Pearson Education 3-80 Information: Role in the Supply Chain The connection between the various stages in the supply chain allows coordination between stages Crucial to daily operation of eac
14、h stage in a supply chain e.g., production scheduling, inventory levels 2007 Pearson Education 3-81 Information: Role in the Competitive Strategy Allows supply chain to become more efficient and more responsive at the same time (reduces the need for a trade-off) Information technology What informati
15、on is most valuable? Example 3.4: Andersen Windows Example 3.5: Dell 2007 Pearson Education 3-82 Components of Information Decisions Push (MRP) versus pull (demand information transmitted quickly throughout the supply chain) Coordination and information sharing Forecasting and aggregate planning Ena
16、bling technologies EDI Internet ERP systems Supply Chain Management software Overall trade-off: Responsiveness versus efficiency 2007 Pearson Education 3-83 Sourcing Role in the supply chain Role in the competitive strategy Components of sourcing decisions 2007 Pearson Education 3-84 Sourcing: Role
17、in the Supply Chain Set of business processes required to purchase goods and services in a supply chain Supplier selection, single vs. multiple suppliers, contract negotiation 2007 Pearson Education 3-85 Sourcing: Role in the Competitive Strategy Sourcing decisions are crucial because they affect th
18、e level of efficiency and responsiveness in a supply chain In-house vs. outsource decisions- improving efficiency and responsiveness Example 3.6: Cisco 2007 Pearson Education 3-86 Components of Sourcing Decisions In-house versus outsource decisions Supplier evaluation and selection Procurement proce
19、ss Overall trade-off: Increase the supply chain profits 2007 Pearson Education 3-87 Pricing Role in the supply chain Role in the competitive strategy Components of pricing decisions 2007 Pearson Education 3-88 Pricing: Role in the Supply Chain Pricing determines the amount to charge customers in a s
20、upply chain Pricing strategies can be used to match demand and supply 2007 Pearson Education 3-89 Sourcing: Role in the Competitive Strategy Firms can utilize optimal pricing strategies to improve efficiency and responsiveness Low price and low product availability; vary prices by response times Exa
21、mple 3.7: Amazon 2007 Pearson Education 3-90 Components of Pricing Decisions Pricing and economies of scale Everyday low pricing versus high-low pricing Fixed price versus menu pricing Overall trade-off: Increase the firm profits 2007 Pearson Education 3-91 Obstacles to Achieving Strategic Fit Incre
22、asing variety of products Decreasing product life cycles Increasingly demanding customers Fragmentation of supply chain ownership Globalization Difficulty executing new strategies 2007 Pearson Education 3-92 Summary What are the major drivers of supply chain performance? What is the role of each dri
23、ver in creating strategic fit between supply chain strategy and competitive strategy (or between implied demand uncertainty and supply chain responsiveness)? What are the major obstacles to achieving strategic fit? In the remainder of the course, we will learn how to make decisions with respect to t
24、hese drivers in order to achieve strategic fit and surmount these obstacles 2007 Pearson Education 4-93 Chapter 4 Designing the Distribution Network in a Supply Chain Supply Chain Management (3rd Edition) 2007 Pearson Education 4-94 Outline The Role of Distribution in the Supply Chain Factors Influe
25、ncing Distribution Network Design Design Options for a Distribution Network E-Business and the Distribution Network Distribution Networks in Practice Summary of Learning Objectives 2007 Pearson Education 4-95 The Role of Distribution in the Supply Chain Distribution: the steps taken to move and stor
26、e a product from the supplier stage to the customer stage in a supply chain Distribution directly affects cost and the customer experience and therefore drives profitability Choice of distribution network can achieve supply chain objectives from low cost to high responsiveness Examples: Wal-Mart, De
27、ll, Proctor ,.,1, ,.,1, . . 1 1 1 111 yy y Kx Dx xcyf i m i i i i n j ij j n i ij n i m j ijij i n i i k ni mj ts Min 5-135 2007 Pearson Education Plant Location with Single Sourcing yi = 1 if plant is located at site i, 0 otherwise xij = 1 if market j is supplied by factory i, 0 otherwise 1 , 0 ,.,
28、1, ,.,1, 1 . . , 1 1 111 y x y K x D x x c Dyf ij ni j mj ts j Min i i i n j ij n i ij n i m j ij ij i n i i 5-136 2007 Pearson Education Summary of Learning Objectives What is the role of network design decisions in the supply chain? What are the factors influencing supply chain network design deci
29、sions? Describe a strategic framework for facility location. How are the following optimization methods used for facility location and capacity allocation decisions? Gravity methods for location Network optimization models 5-137 2007 Pearson Education 6-138 Chapter 6 Network Design in an Uncertain E
30、nvironment Supply Chain Management (3rd Edition) 2007 Pearson Education 6-139 Outline The Impact of Uncertainty on Network Design Decisions Discounted Cash Flow Analysis Representations of Uncertainty Evaluating Network Design Decisions Using Decision Trees AM Tires: Evaluation of Supply Chain Desig
31、n Decisions Under Uncertainty Making Supply Chain Decisions Under Uncertainty in Practice Summary of Learning Objectives 2007 Pearson Education 6-140 The Impact of Uncertainty on Network Design Supply chain design decisions include investments in number and size of plants, number of trucks, number o
32、f warehouses These decisions cannot be easily changed in the short- term There will be a good deal of uncertainty in demand, prices, exchange rates, and the competitive market over the lifetime of a supply chain network Therefore, building flexibility into supply chain operations allows the supply c
33、hain to deal with uncertainty in a manner that will maximize profits 2007 Pearson Education 6-141 Discounted Cash Flow Analysis Supply chain decisions are in place for a long time, so they should be evaluated as a sequence of cash flows over that period Discounted cash flow (DCF) analysis evaluates
34、the present value of any stream of future cash flows and allows managers to compare different cash flow streams in terms of their financial value Based on the time value of money a dollar today is worth more than a dollar tomorrow 2007 Pearson Education 6-142 Discounted Cash Flow Analysis return of
35、rate flowscash of stream thisof luepresent vanet the periods Tover flowscash of stream a is ,., where 1 1 1 1 factor Discount 10 1 0 k NPV CCC C k CNPV k T T t t t Compare NPV of different supply chain design options The option with the highest NPV will provide the greatest financial return 2007 Pea
36、rson Education 6-143 NPV Example: Trips Logistics How much space to lease in the next three years Demand = 100,000 units Requires 1,000 sq. ft. of space for every 1,000 units of demand Revenue = $1.22 per unit of demand Decision is whether to sign a three-year lease or obtain warehousing space on th
37、e spot market Three-year lease: cost = $1 per sq. ft. Spot market: cost = $1.20 per sq. ft. k = 0.1 2007 Pearson Education 6-144 NPV Example: Trips Logistics For leasing warehouse space on the spot market: Expected annual profit = 100,000 x $1.22 100,000 x $1.20 = $2,000 Cash flow = $2,000 in each o
38、f the next three years 471, 5$ 1 . 1 2000 1 . 1 2000 2000 11 lease) (no 2 2 21 0 k C k C CNPV 2007 Pearson Education 6-145 NPV Example: Trips Logistics For leasing warehouse space with a three-year lease: Expected annual profit = 100,000 x $1.22 100,000 x $1.00 = $22,000 Cash flow = $22,000 in each
39、of the next three years 182,60$ 1 . 1 22000 1 . 1 22000 22000 11 lease) (no 2 2 21 0 k C k C CNPV The NPV of signing the lease is $54,711 higher; therefore, the manager decides to sign the lease However, uncertainty in demand and costs may cause the manager to rethink his decision 2007 Pearson Educa
40、tion 6-146 Representations of Uncertainty Binomial Representation of Uncertainty Other Representations of Uncertainty 2007 Pearson Education 6-147 Binomial Representations of Uncertainty When moving from one period to the next, the value of the underlying factor (e.g., demand or price) has only two
41、possible outcomes up or down The underlying factor moves up by a factor or u 1 with probability p, or down by a factor d 1 with probability 1-p Assuming a price P in period 0, for the multiplicative binomial, the possible outcomes for the next four periods: Period 1: Pu, Pd Period 2: Pu2, Pud, Pd2 P
42、eriod 3: Pu3, Pu2d, Pud2, Pd3 Period 4: Pu4, Pu3d, Pu2d2, Pud3, Pd4 2007 Pearson Education 6-148 Binomial Representations of Uncertainty In general, for multiplicative binomial, period T has all possible outcomes Putd(T-t), for t = 0,1,T From state Puad(T-a) in period t, the price may move in period
43、 t+1 to either Pua+1d(T-a) with probability p, or Puad(T-a)+1 with probability (1-p) Represented as the binomial tree shown in Figure 6.1 (p. 140) 2007 Pearson Education 6-149 Binomial Representations of Uncertainty For the additive binomial, the states in the following periods are: Period 1: P+u, P
44、-d Period 2: P+2u, P+u-d, P-2d Period 3: P+3u, P+2u-d, P+u-2d, P-3d Period 4: P+4u, P+3u-d, P+2u-2d, P+u-3d, P-4d In general, for the additive binomial, period T has all possible outcomes P+tu-(T-t)d, for t=0, 1, , T 2007 Pearson Education 6-150 Evaluating Network Design Decisions Using Decision Tre
45、es A manager must make many different decisions when designing a supply chain network Many of them involve a choice between a long-term (or less flexible) option and a short-term (or more flexible) option If uncertainty is ignored, the long-term option will almost always be selected because it is ty
46、pically cheaper Such a decision can eventually hurt the firm, however, because actual future prices or demand may be different from what was forecasted at the time of the decision A decision tree is a graphic device that can be used to evaluate decisions under uncertainty 2007 Pearson Education 6-15
47、1 Decision Tree Methodology 1. Identify the duration of each period (month, quarter, etc.) and the number of periods T over the which the decision is to be evaluated. 2. Identify factors such as demand, price, and exchange rate, whose fluctuation will be considered over the next T periods. 3. Identi
48、fy representations of uncertainty for each factor; that is, determine what distribution to use to model the uncertainty. 4. Identify the periodic discount rate k for each period. 5. Represent the decision tree with defined states in each period, as well as the transition probabilities between states in successive periods. 6. Starting at period T, work back to period 0, identifying the optimal decision and the expected cash flows at each step. Expected cash flows at each state in a given period should be discounted back when included
