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SUPPLY CHAIN MANAGEMENT AN OVERVIEW

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Title: SUPPLY CHAIN MANAGEMENT AN OVERVIEW


1
SUPPLY CHAIN MANAGEMENT AN OVERVIEW
  • Chwen Sheu
  • Paul Edgerly Chair Professor
  • Kansas State University
  • (CSCMP Kansas City Roundtable)

2
PRESENTATION OUTLINE
  • SUPPLY CHAIN MANAGEMENT (SCM) INTRODUCTION
  • WHY IS SCM IMPORTANT?
  • GREEN SUPPLY CHAIN MANAGEMENT

3
1. SUPPLY CHAIN MANAGEMENT (SCM)
4
SEARCHING SUPPLY CHAIN MANAGEMENT
Yahoo?
Google
5
WHAT IS SCM?
  • Supply Chain
  • A network of of suppliers, manufacturers,
    warehouses, 3PL, retail outlets, customers.
  • Supply chain management (SCM)
  • The management of flows between and among supply
    chain stages to maximize total supply chain
    profitability

6
Traditional Supply Chain Systems
Supplier Manufacturer
Manufacture Wholesale Retail
Customer (1st,2nd,) Plant
Distribution Distribution
Center Center
Reverse Logistics
3rd Party Logistics Providers (3PL)
Material Flow Information Flow
7
BEEF SUPPLY CHAIN
Seedstock
Cow/Calf
Stocker
Feedlot
Packer
Processor
Retailer
8
IC SUPPLY CHAIN
?????
???
???
???
IC???
IC ?????
? ?
OEM
IBM
9
SCM Survey 2004 IT Industry (236 firms)
10
How IMPORTANT is the SC function to your
organization's business strategy ?
11
Who is directly RESPONSIBLE for determining your
SC operations?
Up from 14.2 in 2003
12
Compared to 2003, how is your SPENDING on SC
likely to change in 2004?
13
II. SCM WHY IS IT IMPORTANT?
14
SCM ITS A NEW BALL GAME
  • Improves Competitiveness
  • Efficiency
  • Cost Lean manufacturing ? Lean supply chain
    (e.g., Boeing)
  • Responsiveness
  • Customization (e.g., Dell)

15
Efficiency Boeing Example
16
Responsiveness Dell
  • Why SCM?
  • A win-win partnership
  • Value-added

1 1 gt 2
We focus on how we can coordinate our
activities to create the most value for
customers. - M. Dell
17
(No Transcript)
18
CREATING VALUES
19
Implementing SCM requires a fundamental change in
the way firms operate
Gee, we've never done that before, but why not?
Let's give it a try.
20
PARTNERSHIP Bullwhip Effect
  • PG found that
  • Demand variability (Pampers) increases for SC
    members located farther upstream (110)

21
What You See Is Not What They Face
Lee, H, P. Padmanabhan and S. Wang (1997), Sloan
Management Review
22
III. GREEN SUPPLY CHAIN MANAGEMENT (GSCM)
23
GSCM SCM EM
24
I think God's going to come down and pull
civilization over for speeding. Steven
Wright
25
ENVIRONMENTAL MANAGEMENT? WHY?
  • 12 tons of CO2 per capita are produced per year.
    Only 8 of this emission is managed by nature.
  • The average temp of the Earth could raise up to
    5ºC by the end of 21 century ? Sea level could
    rise up to 100 meters.
  • A visit to Amsterdam could be soon a submarine
    visit.

26
EM? WHY?
  • 60 of managers considered environmental issues
    to be highly important, 82 expected the
    importance would further increase in the years to
    come (2002).
  • a new industrial revolution. It is the most
    forceful trend in my lifetime ... it will
    redefine the rules of the game. (CEO, Sony)

27
RoHS
EuP
WEEE
28
Waste Electrical and Electronic Equipment (WEEE)
Restriction of Hazardous Substances (RoHS)
Energy-using Products (EuP)
29
EM DEVELOPMENT
  • USA
  • Total cost of compliance over the past 25 years
    have exceeded 1 trillion (120 billion
    annually).
  • 1970s 2000 federal, state, and local
    e-regulations Today 100,000. Business in LA
    must answer up to 72 separate authorities.
  • Computer Takeback Among 28 global computer
    firms, U.S. computer firms rank 9th (Apple), 11th
    (HP).
  • 80 of consumer are willing to pay more for
    green.
  • Dow Jones Sustainability Index
  • It's a difficulty for European firms, and it's a
    huge difficulty for American firms.

30
EM DEVELOPMENT
  • Japan
  • 63 of Japanese consumers are willing to pay 5
    more, 27 pay 15 more for green products.
  • Green Products
  • Toyota Hybrid Prius uses half the petrol emits
    only half the carbon dioxide.
  • Sony Green Partner
  • Europe
  • No kidding!!!

31
TOYOTA Eco-Friendly Prius 20,000
32
EM TQM
  • Total Quality Environmental Management (TQEM)
  • Prevention is better than compliance
  • Continuous improvement innovation technology,
    process, design, material
  • Must involve suppliers
  • Benefit outweighs cost ? EM Is Free

33
EM BUSINESS IMPACTS
  • Pepsi Saved 44 million by switching from
    corrugated to reusable plastic shipping
    containers for one liter 20 oz bottles,
    conserving 196 million lb of corrugated material.
  • Texas Instruments Saved 8 million each year by
    reducing its transit packaging budget for its
    semi-conductor business thru source reduction,
    recycling use of reusable packaging.
  • Commonwealth Edison Produced 50 million in
    financial benefits from the implementation of
    Life-Cycle Analysis approach.
  • Dow Corning Saved 2.3 million by using
    reconditioned steel drum in 1995. It also
    conserved 7.8 million lb of steel.

34
GSCM LIFE CYCLE ANALYSIS/ASSESSMENT
Recycle Reuse Disposal
Retailer/Customer
Design
Raw Mat.
Logistics
Manufacture
35
CRISIS? OPPORTUNITY?
THE WORST TIME
THE BEST TIME
36
We are convinced that being good to the
environment is also good for business and have
every intention of keeping it that way. -
1997 Xerox EHS Progress Report
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