BUSINESS DRIVEN TECHNOLOGY

Chapter Ten: Extending the Organization – Supply Chain Management

LEARNING OUTCOMES

10.1 List and describe the components of a typical supply chain

10.2 Define the relationship between decision making and supply chain management

10.3 Identify three of the factors driving supply chain management’s explosive growth

10.4 Summarize the best practices for implementing a successful supply chain management system

CHAPTER TEN OVERVIEW

• The average company spends nearly half of every dollar that it earns on production

• In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains

• Today, companies are focusing on all of the following to influence their supply chains:– Suppliers, assemblers, shipping/logistic firms, sales/marketing

channels, third-party customers support firms, other business partners

CHAPTER TEN OVERVIEW

• The supply chain has three main links:1. Materials flow from suppliers and their “upstream”

suppliers at all levels2. Transformation of materials into semifinished and

finished products through the organization’s own production process

3. Distribution of products to customers and their “downstream” customers at all levels

CHAPTER TEN OVERVIEW

• Organizations must embrace technologies that can effectively manage and oversee their supply chains

SUPPLY CHAIN MANAGEMENT’S EXPLOSIVE GROWTH

• Top reasons why more and more executives are turning to SCM to manage their extended enterprises

SUPPLY CHAIN MANAGEMENT’S EXPLOSIVE GROWTH

• Five Factors Driving SCM’s Explosive Growth

USING SUPPLY CHAIN MANAGEMENT TO ENHANCE DECISION MAKING

• Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains

• DSSs allow managers to examine performance and relationships over the supply chain and among:– Suppliers– Manufacturers– Distributors– Other factors that optimize supply chain performance

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS

• The following are the SCM industry best practices:

1. Make the sale to suppliers2. Wean employees off traditional business practices3. Ensure the SCM system supports the organizational

goals4. Deploy in incremental phases and measure and

communicate success5. Be future oriented

OPENING CASE STUDY QUESTIONSRevving Up Sales at Harley-Davidson

1. Describe how Harley-Davidson’s SCM system, Manugistics, might improve its business operations

2. Provide an illustration of Harley-Davidson’s SCM system including all upstream and downstream participants

CHAPTER TEN CASEBudNet

• Anheuser-Busch’s top-secret nationwide data network, BudNet, knows every time a six-pack moves off of a store shelf.

• Information is entered into BudNet nightly from several thousand Anheuser-Busch distributors and sales representatives

• Anheuser-Busch has made a deadly accurate science out of determining what beer lovers are buying, as well as when, where, and why

CHAPTER TEN CASE QUESTIONS

1. Describe how an SCM system can help a distributor such as Anheuser-Busch make its supply chain more effective and efficient

2. SCM is experiencing explosive growth. Explain why this statement is true using BudNet as an example

3. Evaluate BudNet’s effect on each of the five factors that are driving SCM success