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! BA 244: Supply Chain Management
| Date post: | 12-Jan-2017 |
| Category: |
Business |
| Upload: | michael-robert-juadiong |
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!!
BA#244:#Supply#Chain#Management#
Survey#
! Access!LinkedIn!Group!
Supply#Chain#Management#
! Not!just!a!flow!of!goods,!but!also!a!flow!of!informa=on!
Open#Innovation#Alliances#
! Closed!Innova=on!! Contract@based!
! Open!Innova=on!! “the!use!of!purposive)inflows)and)ou/lows)of)
knowledge!to!accelerate)internal)innova6on,!and!expand!the!markets!for!external)use)of)innova6on,!respec=vely”!(Chesbrough!et!al.!2006,!p.!2)!
! Operates!on!a!‘module’!basis!with!diverse!roles!
! Open!membership,!transparency,!self@regula=on!
Research#Question#
! How!does!the!market!evaluate!a!firm’s!strategic!
decision!to!par=cipate!in!OIAs?!
! What!is!the!impact!on!the!market!valua=ons!of!
firms!that!already!par=cipate!in!the!OIA!when!a!
market!leader!joins!the!exis=ng!alliance?!
! What!do!OIAs!mean!to!nonpar=cipa=ng!rivals!and!
their!market!valua=on?!
Significance#
! Ongoing!value!crea=on!aSer!ini=al!forma=on!of!OIA!
! Effect!of!IT!investments!(OIA!par=cipa=on)!on!rivals!
! Iden=fies!factors!that!adds!value!to!OIA!cons=tuents!–!type!of!innova=on!and!degree!of!
openness!
! Managers!in!high!tech!and!knowledge!intensive!
industries!can!choose!the!“best”!alliance!to!join!and!
can!base!their!decisions!on!many!criteria!
Measures#
! Abnormal!Stock!Returns!
! Difference!between!actual!return!and!expected!
return!
! Broad!index!(e.g.!S&P!500)!or!na=onal!index!(Nikkei!
225)!is!used!as!a!benchmark!to!determine!expected!
return!
! Events!! Triggers!abnormal!returns!
! e.g.!M&A,!dividend!announcement,!company!
earning!announcement,!lawsuits!
Strategic#Alliances#Announcement#
! Posi=ve!effect!due!to:!! Reduced!transac=on!costs!
! Organiza=onal!learning!and!resource!pooling!
Strategic#Alliances#Announcement#
! June!20,!2016,!Walmart!and!JD.com!(B2C)!
! JD.com!will!take!ownership!of!Yihaodian!(B2C)!
! Sam’s!Club!China!will!open!a!flagship!store!in!JD.com!
expanding!reach!to!600M!customers!for!imported!
products!
• Business!transac=ons!carried!out!online!via!the!internet!
E@Commerce!
• Owned!by!Alibaba!Group!of!Jack!Ma!
• Consumer@to@consumer!(C2C)!
• World’s!top!10!most!visited!website!
Taobao!
EACOMMERCE#IN#CHINA#
• Boyfriend!for!hire!@!£103!to!£103,300!a!day,!with!extra!charge!for!holding!hands,!joint!internet!surfing,!and!shopping!
Taobao!
EACOMMERCE#IN#CHINA#
• Chinese!online!grocery!business!• Business@to@Consumer!(B2C)!
• Owned!by!Walmart!
Yihaodian!
EACOMMERCE#IN#CHINA#
Hypotheses#
! H1:!Posi6ve!abnormal!stock!returns!will!accrue!to!
firms!that!par6cipate)in)an)OIA)
! H2:!The!announcement!of!the!entry)of)a)market)leader!company!into!an!exis=ng!OIA!will!result!in!
posi6ve!abnormal!returns!for!current)OIA)member!firms!
! H3:!The!announcement!of!OIAs!will!result!in!
posi6ve!abnormal!stock!returns!for!the!rival!firms!
that!compete!with!the!firms!par=cipa=ng!in!OIAs!
Hypotheses#
! H4:!All!else!being!equal,!firms!that!par=cipate!in!an!OIA!
with!more)heterogeneous)partners!will!experience!higher!abnormal!returns!than!firms!that!join!an!OIA!with!
more!homogeneous!partners!
! H5:!All!else!being!equal,!firms!that!par=cipate!in!an!OIA!
driven!by!radical)innova6on!will!experience!higher!abnormal!returns!than!firms!that!join!an!OIA!focusing!on!
incremental!innova=on!
! H6:!All!else!being!equal,!firms!that!par=cipate!in!an!OIA!
with!full)access)and)decision)authority!will!experience!higher!abnormal!returns!than!firms!that!join!an!OIA!with!
limited!access!and!decision!authority!
Data#
! PR!Newswire!and!Business!Wire!news!between!
January!1,!2000,!and!August!30,!2009!
! Abnormal!returns!and!financial!data!from!the!
WRDS!database!(wrds.wharton.upenn.edu/)!
Results#
! H1:!Supported!
! H2:!Supported!
! H3:!Supported!
! H4:!Not!Supported!
! H5:!Supported!
! H6:!Opposite!
Implications#
! H1:!Encourage)IT)ini6a6ves)(OIA)!that!are!codeveloped!and!comanaged!in!a!mul=firm,!open!collabora=ve!
environment!
! H2:!OIA!founders!should!con=nue!making!efforts!to!
encourage)market)leaders)to)join!their!collabora=ons!!
! H3:!If)knowledge)spillover!to!external!par=es!(e.g.,!rivals)!can)be)detrimental!to!the!firm’s!own!survival,!it!
should!remain)independent!and!enhance!its!compe==veness!through!closed)innova6on!paradigms.!
Implications#
! H5:!Cons=tuents!of!OIAs!should!focus!on!radical)innova6ons!rather!than!incremental!innova=ons!!
! H6:!High)degree)of)openness!is!associated!with)substan6al)costs!such!as!knowledge!spillover!and!value!appropria=on!by!rivals!
! OIAs!could!adjust)their)degree)of)openness)depending!on!the!lifecycle!of!the!technological!innova=ons!
! “co@ope==on”!
Internal#Supply#Chain#
Procurement! Produc=on! Storage! Distribu=on! Sales!and!
Marke=ng!
Contexts#of#Procurement#and#Supply#
! Purchasing!! Involves!the!acquisi6on)of)supplies!or!inputs!to!
the!organiza=on’s!ac=vi=es!
! Done!by!purchasing!department,!or!individuals!
and!teams!in!other!departments!
Contexts#of#Procurement#and#Supply#
! Purchasing!objec=ve!is!to!buy!materials!
! of!the!Right!Quality)! in!the!Right!Quan6ty)! delivered!to!the!Right!Place)! at!the!Right!Time)! at!the!Right!Price)
Sample#Purchase#Order#(PO)#
! of!the!Right!Quality!
! in!the!Right!Quan=ty!
! delivered!to!the!Right!Place!
! at!the!Right!Time!
! at!the!Right!Price!
!
Purchasing#
Purchase!
Order!
Step!1!
Monitor!
and!Chase!
Delivery!
Step!2!
Receipt!of!
Delivery!
Step!3!
Payment!
of!the!
Supplier!
Step!4!
Procurement#
! Wider!term!than!Purchasing!
! Proac=ve!
! Rela=onal!
! Strategic!
! Integrated!
Procurement#
! ‘Is!the!process!undertaken!by!the!organiza=onal!unit!that,!either!as!a!func=on!or!as!a!part!of!an!
integrated!supply!chain,!is!responsible!for!
procuring!or!assis=ng!users!to!procure,!in!the!most)efficient)manner,!required!supplies!at!the!right!=me,!quality,!quan=ty,!and!price,!and!the!
management)of)suppliers.’!(Lysons!&!Farrington)!
Scale#and#Scope#of#Procurement#
! Goods!–!tangible!items,!which!can!be!consumed!
! Services!–!ac=ons!performed,!which!confer!a!
benefit,!but!do)not)result)in)the)ownership!of!anything!
! Construc=onal!works!–!projects!such!as!construc=on,!altera=on,!repair,!maintenance,!or!
demoli=on!of!buildings!or!structures!
Characteristics#of#Projects#
! Unique!–!done!only!once!
! Specific!deliverable!
! Specific!due!date!
! Resources!–!Time,!Cost!
! Cross!organiza=onal!par=cipa=on!
“A!temporary!endeavor!undertaken!to!create!a!unique!product!or!service”!
Project!Management!Ins=tute,!2000!
Examples#
! Security!Guarding!for!the!Bri=sh!Embassy!Dubai!
! Installa=on!of!Car!Park!Shades!
! CCTV!Maintenance!
PROCUREMENT#
Define!
business!
need!
Step!1!
Market!
Intelligence!
Step!2!
Sourcing!
Step!3!
Nego=a=on!
of!contracts!
Step!4!
Purchase!
Order!
Step!5!
Monitor!
and!Chase!
Delivery!
Step!6!
Receipt!of!
Delivery!
Step!7!
Payment!of!
the!
Supplier!
Step!8!
• Contract!Management!
• Supplier!Rela=onship!
Management!
• Dispute!Resolu=on!
Step!9!
DIRECT#AND#INDIRECT#PROCUREMENTS#
Direct!Procurement!
Direct!inputs!to!the!produc6on)process)
Items!procured!are!either!for!resale!or!for!incorpora=on!in!goods!for!sale!
Indirect!Procurement!
Indirectly!suppor=ng!the!produc=on!process!
Maintenance,!Repair,!and!Opera=ng!supplies!(MRO)!
Services!and!other!opera=ng!expenses!
DIRECT#AND#INDIRECT#PROCUREMENTS#
DIRECT#AND#INDIRECT#PROCUREMENTS#
Direct!Procurement!
Quality!has!direct!impact!on!goods!
Held!on!stock!
Indirect!Procurement!
STOCK#AND#NONASTOCK#PROCUREMENTS#
Stock!
Based!on!Demand!Forecast!
Cost!of!storage!space!and!insurance!
Cost!of!stock!wastage!due!to!deteriora=on!or!obsolescence!
Perishable!Goods!
Non@Stock!
STOCK#AND#NON#STOCK#PROCUREMENTS#
CAPITAL##AND#OPERATIONAL#EXPENDITURE#
Capital!Goods!
Length!of!Lifecycle!–!1+!years!
High!Acquisi=on!Cost!–!based!on!threshold!value!
CAPITAL##AND#OPERATIONAL#EXPENDITURE#
Capital!Goods!@!Total!Cost!of!Ownership!
!
!
Purchase!Price!
!
Delivery!
Installa=on!
Maintenance!and!Repair!
Operator!Training!
Energy!
Labor!
Disposal!Cost!
CAPITAL##AND#OPERATIONAL#EXPENDITURE#
Opera=ng!Expenditure!
Benefits!the!organiza=on!just!briefly!
!
!
Administra=on!expenses!
Telephone!Bills!
Sta=onery!
SERVICE#PROCUREMENTS#Service!
An!ac=vity!or!benefit!that!one!party!can!offer!to!another!that!is!essen=ally!intangible!
and!does!not!result!in!the!ownership!of!anything!
Something!is!done!for!you!
Characteris=cs!of!Service!
Intangible!–!cannot!be!‘inspected’!
Inseparability!–!produced!and!consumed!at!the!same!=me!
Heterogeneity!–!rela=vely!non!uniform!output!
Perishability!–!cannot!be!stored!for!later!use!
Ownership!–!no!transfer!of!ownership!
SEGMENTING#EXTERNAL#EXPENDITURE#
Procurement!Porsolio!Segmenta=on!
Analyzing!expenditure!by!categorizing!items!or!suppliers!according!to!priority,!value,!or!
importance!to!the!organiza=on!
Pareto!Analysis!
80/20!Rule!
80%!of!spend!being!directed!towards!just!20%!of!the!suppliers!
Cri=cal!Few!vs.!Trivial!Many!
SEGMENTING#EXTERNAL#EXPENDITURE#
Kraljic!(Procurement!Posi=oning)!Matrix!
Importance!to!the!organiza=on!vs.!Complexity!of!the!supply!market!
Leverage!items! Strategic!items!
Mul=ple!suppliers,!chiefly!local,!
bidding!
e.g.!local!produce!
Established!global!suppliers!
Long@term!availability!
e.g.!core!processors!
Non@cri=cal!items! Bovleneck!Items!
Established!local!suppliers!for!call@off!
!
e.g.!sta=onery!
Global,!predominantly!new!suppliers!
with!new!technology,!buffer!stock!
e.g.!unique!spare!parts,!specialized!
consultancy!services!
Complexity+of+Supply+Market+
Low ! ! ! !High!
Impo
rtan
ce+of+the+Item
+
Low
!!High!
KRALJIC#(PROCUREMENT#POSITIONING)#MATRIX#
Leverage!items! Strategic!items!
Standardize!specs!to!easily!switch!
suppliers,!bidding!
!
e.g.!printed!material!for!a!marke=ng!
firm!
Long@term!mutually!beneficial!
strategic!rela=onships!
!
e.g.!core!processors!bought!by!a!
laptop!manufacturer!
Non@cri=cal!/!Rou=ne!items! Bovleneck!Items!
Vendor@managed!inventory,!Blanket!
order!(call@off),!Online!ordering!
!
e.g.!sta=onery!
Medium@!or!long@term!contracts,!
develop!alterna=ve!or!back@up!
suppliers,!buffer!stock!
!
e.g.!unique!spare!parts,!specialized!
consultancy!services,!sole!supplier!
Complexity+of+Supply+Market+
Low ! ! ! !High!
Impo
rtan
ce+of+the+Item
+/+Spend+
Low
!!High!
Number+of+Suppliers+in+the+Market+
High ! ! ! !Low!
TENDERING�
Requests for Information, Quotations, Proposals (RFI, RFQ, RFP)
1�
2�3�
RFI – requests generic information to test the market RFQ – requests an actual price RFP – requests both price and a comprehensive description of services�
Request for Quotation (RFQ)
Contact details of the purchaser
Date by which to reply
Quantity and Description of Goods or Services required
Required Date and place of delivery
(Buyer’s standard terms and conditions)
(Terms of payment)�
Coverage� Value�
Overall!Annual!Cover!per!Member� PHP!300,000!/!annum�
In@pa=ent!services� Covered�
Out@pa=ent!services� Covered�
Dental!Care!and!Maternity� Not!Covered�
Number!of!Male!Employees� 56�
Number!of!Female!Employees� 50�
Last!Year’s!U=liza=on� 65%�
Hospital!Network� All!Ter=ary!hospitals!in!Maka=!City�
Request for Quotation (RFQ) Please quote for below services. This is for employees of the British
Embassy in Riyadh. Hope to receive before 22 April 2016.
Michael Juadiong
09178581557; [email protected]
Bapa� Gulfy� Med�
4,597! 8,344� 6,236�
Request for Quotation (RFQ)
All quotes above are in PHP per person
Invitation to Tender (ITT)
A more formalized competitive bidding, in which suppliers
are issued an ITT for a contract, with the buyer intending to
choose the supplier submitting the best proposal or the
lowest price.
Invitation to Tender (ITT)
ATT 1: Instructions to Tenderer
ATT 2: Evaluation Criteria
ATT 3: Proposed Contract Documents
ATT 4: Conditions of Contract
ATT 5: Statement of Services and KPIs
ATT 6: Price Schedule
ATT 7: Declaration by Supplier�
Selection and Award Criteria
It is important to state at the onset that:
• The buyer will not be bound to accept the lowest price
quoted
• Post-tender negotiation may be entered into
Use of Weighted points systems for assessment
Selec=on!Criteria�
These are the factors to be evaluated
Weights�
Cross@func=onal!team�
Points�
Maximum ratings for each factor
Approves the Selection Criteria and Weights, comprising of relevant stakeholders
Assigned numerical ratings to each competing supplier, based on the collective judgment of the team
Criteria� Perfect)Score)/)Weight� Supplier)A� Supplier)B�
Technical Approach� 40� 35� 30�
Production Facilities� 10� 10� 10�
Ability to Meet Schedule� 10� 5� 5�
Price� 40� 30� 40�
Use of Weighted points systems for assessment
Example: Technical – 60% Commercial – 40%
Balancing Technical and Commercial Award Criteria
HIGHEST COMMERCIAL
SCORE�
BEST VALUE
MOST ECONOMICALLY ADVANTAGEOUS
TENDER (MEAT)�
HIGHEST TECHNICAL
SCORE�
!!End#
