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Chapter 9 Supply Chain Management Topics “Nowadays, it’s supply chains that compete with supply chains!” What is Supply Chain ? What is Supply Chain Management? What factors have attributed to the boost of SMC? How to integrate supply chain? What Is Supply Chain ? What is supply chain ? A supply chain encompass all activities associated with the flow and transformation of goods from the raw material stage, through to the end user, as well as the associated information flows Definition of Supply Chain Management 1 Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses and stores, so that merchandise 商品,货物 is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system-wide costs while satisfying service level requirements. what factors have attributed to the boost of SMC? Factor 1:Excess Inventory costs Why? The lengthy order-to-delivery Unpredictable market Product variation Stockpile inventory in different part of the supply chain Bullwhip effect 长鞭效应 Bullwhip Effect(以PC产业为例) Factor 2: Consumer power Why consumer power became a attribute to the SMC development? Consumer affluence Consumer’s needs and wants change quickly Fast and agile respond to their changing demand –achieve through SCM Factor 3:Information availability Computerization— efficient and low-cost tool to solve logistical and supply chain decisions Internet— instantaneous visibility to the same data througout supply chain Supply chain become more proactive, which can transform into lower inventories and improved profitability How to integrate supply chain? Three primary methods to integrate Supply Chain Vertical integration Outsourcing Strategic alliance 1. Vertical integration 纵向整合 2. Outsourcing 外包 Outsourcing is the action taken by an organization to move a part of its internal processes to an outside entity or
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