ì  BA  244:  Supply  Chain  Management  

Michael  Robert  Juadiong  

ì  University  of  the  Philippines  

ì  Jollibee  Foods  Corpora7on  

ì  L’Oreal  Philippines  

ì  Peking  University  HSBC  Business  School,  Shenzhen  

ì  Bri7sh  Embassy  Manila  

ì  Chartered  Ins7tute  of  Procurement  &  Supply  

ì  Syllabus  

Supply  Chain  Management  Problem  

ì  #chickensad  

ì  Issues  ì  System  migra7on  –  Oracle  to  SAP  ì  Outsourced  to  a  large  mul7na7onal  IT  service  provider  

with  no  sizable  local  team  ì  Opera7ng  schedule  of  just  a  year  ì  Tes7ng  

ì  PHP  500M  for  the  new  IT  system  

ì  Jollibee  lost  6%  of  its  sales  for  the  first  7  days  of  August  =  PHP  92M  

Source:    Legaspi,  C.  August  13,  2014.    rappler.com  

What  are  your  short  and  long  term  solutions?  

History:  Integration  of  Supply  Chain  Activities  

1962:  Fragmenta7on  

• Demand  Forecas7ng  • Purchasing  • Requirements  Planning  • Produc7on  Planning  • Manufacturing  Inventory  • Warehousing  • Materials  Handling  • Industrial  Packaging  • Finished  Goods  Inventory  • Distribu7on  Planning  • Order  Processing  • Transporta7on  • Customer  Services  

ì  No  single  manager  took  responsibility  for  total  material  costs  

ì  Lack  of  ‘big  picture’  and  ‘joined  up’  thinking  about  how  material  flows  could  be  improved  or  streamlined  to  add  value  

Integration  of  Supply  Chain  Activities  

1962:  Fragmenta7on  

• Demand  Forecas7ng  • Purchasing  • Requirements  Planning  

• Produc7on  Planning  • Manufacturing  Inventory  

• Warehousing  • Materials  Handling  • Industrial  Packaging  • Finished  Goods  Inventory  

• Distribu7on  Planning  • Order  Processing  • Transporta7on  • Customer  Services  

1982:  Evolving  Integra7on  

• Materials  Management  

• Physical  Distribu7on  

2002:  Total  Integra7on  

• Logis7cs  

Adapted  from  The  Management  of  Business  Logis2cs,  by  Coyle,  Bardi,  and  Langley  

Integration  of  Supply  Chain  Activities  

ì  What  year  is  your  organiza7on  in?  

Integration  of  Supply  Chain  Activities  

1962:  Fragmenta7on  

• Demand  Forecas7ng  • Purchasing  • Requirements  Planning  

• Produc7on  Planning  • Manufacturing  Inventory  

• Warehousing  • Materials  Handling  • Industrial  Packaging  • Finished  Goods  Inventory  

• Distribu7on  Planning  • Order  Processing  • Transporta7on  • Customer  Services  

1982:  Evolving  Integra7on  

• Materials  Management  

• Physical  Distribu7on  

2002:  Total  Integra7on  

• Logis7cs  

Adapted  from  The  Management  of  Business  Logis2cs,  by  Coyle,  Bardi,  and  Langley  

Materials  Management  (MM)  

ì  ‘The  total  of  all  those  tasks,  func7ons,  ac7vi7es,  and  rou7nes  which  concern  the  transfer  of  external  materials  and  services  into  the  organiza;on  and  the  administra;on  of  the  same  un7l  they  are  consumed  or  used  in  the  process  of  produc7on,  opera7ons,  or  sales’  (CIPS)  

ì  Input  phase  of  the  supply  chain  process  

Materials  Management  (MM)  

Materials  and  Inventory  Planning  •  product  R&D  •  planning  quan77es  

Procurement  •  transport  of  incoming  items  

Storage  and  Inventory  Management  

Produc7on  Control  •  produc7on  scheduling  

•  quality  management  

Zenz,  Purchasing  and  the  Management  of  Materials  

MM  Advantages  

ì  Cross-­‐func7onal  coopera7on  and  coordina7on  are  improved  

ì  Reconciled  conflic7ng  objec7ves  in  the  best  interest  of  the  process  as  a  whole  (e.g.  purchasing’s  economies  of  scale  vs.  warehouse’s  minimized  inventory)  

ì  World  class  manufacturing  techniques  can  be  easily  introduced  due  to  improved  integra7on  (e.g.  JIT,  TQM)  

Integration  of  Supply  Chain  Activities  

1962:  Fragmenta7on  

• Demand  Forecas7ng  • Purchasing  • Requirements  Planning  

• Produc7on  Planning  • Manufacturing  Inventory  

• Warehousing  • Materials  Handling  • Industrial  Packaging  • Finished  Goods  Inventory  

• Distribu7on  Planning  • Order  Processing  • Transporta7on  • Customer  Services  

1982:  Evolving  Integra7on  

• Materials  Management  

• Physical  Distribu7on  

2002:  Total  Integra7on  

• Logis7cs  

Adapted  from  The  Management  of  Business  Logis2cs,  by  Coyle,  Bardi,  and  Langley  

Physical  Distribution  

ì  Output  phase  of  the  supply  chain  process  

ì  Outputs  of  produc7on  (finished  goods)  are  moved  from  one  loca7on  to  another:  typically  from  a  supplier  to  a  customer  

Physical  Distribution  Management  (PDM)  

Warehouse  and  Storage  

Transport  or  Distribu7on  Planning  • Transport  routes  • Delivery  schedules  

Materials  Handling  • Containerizing  and  Packaging  for  outbound  transport  

Inventory  Management  and  Control  • Keeping  track  of  finished  items  in  stock  

Transporta7on  and  Delivery  

Physical  Distribution  Management  (PDM)  

ì  Basic  Objec7ve:  Deliver  the  right  goods  to  the  right  place  at  the  right  7me  and  at  the  right  cost  

ì  Can  be  local  or  global  

Integration  of  Supply  Chain  Activities  

1962:  Fragmenta7on  

• Demand  Forecas7ng  • Purchasing  • Requirements  Planning  

• Produc7on  Planning  • Manufacturing  Inventory  

• Warehousing  • Materials  Handling  • Industrial  Packaging  • Finished  Goods  Inventory  

• Distribu7on  Planning  • Order  Processing  • Transporta7on  • Customer  Services  

1982:  Evolving  Integra7on  

• Materials  Management  

• Physical  Distribu7on  

2002:  Total  Integra7on  

• Logis7cs  

Adapted  from  The  Management  of  Business  Logis2cs,  by  Coyle,  Bardi,  and  Langley  

Logistics  Management  

ì  Integra7on  of  input  phase  and  output  phase  

ì  ‘process  of  planning,  implemen7ng,  and  controlling  the  efficient,  effec;ve  flow  and  storage  of  raw  materials,  in-­‐process  inventory,  finished  goods,  services,  and  related  informa;on  from  point  of  origin  to  point  of  consump7on..  for  the  purpose  of  conforming  to  customer  requirements’  (Council  of  Logis7cs  Management  Professionals,  USA,  cited  by  Coyle,  Bardi,  and  Langley,  The  Management  of  Business  Logis2cs)  

Advantages  

ì  Shorter  product  life  cycles  ì  Constant  product  upda7ng  and  innova7on  to  react  

to  fast-­‐changing  consumer  demand  ì  Supports  swim  idea-­‐to-­‐market  cycles  

ì  Pressure  to  Globalize  in  sourcing,  manufacturing,  and  marke7ng  and  manage  risk  of  distance  

ì  Development  of  Informa7on  and  Communica7on  Technology  (ICT)  which  supports  integrated  logis7cs  planning  capabili7es  

Sharman  (summarized  by  van  Weele,  Purchasing  Management:  Analysis,  Planning,  and  Prac7ce)  

Terminology  

ì  Terminology  can  be  loose  and  inconsistent  

ì  ‘Logis7cs’  now  used  as  a  new  name  for  transport,  warehousing,  or  distribu7on  

ì  e.g.  freight  transport  companies  are  frequently  rebadged  as  ‘logis7cs’  companies  

Emmen  (Supply  Chain  in  90  Minutes)  

End