OMT 8604 Logistics in Supply Chain Management: Master of Business Administration

OMT 8604 Logistics in
Supply Chain Management

Master of Business Administration
Instructor
Worked in supply chain management

 Abul khair tobacco company limited 2011-2013
Supply Chain management (Factory)
 Ha-meem Denim limited 2013
Supply Chain management
 Edison Group (Symphony mobile) 2014-2018
Supply Chain management
Works at RIDER and JAC
Nayema Rahman Ema

Text Book
1. Supply Chain Management: Strategy, Planning, and Operation, (5th
Edition)
By Sunil Chopra, Peter Meindl
2. Inventory Management and Production Planning and Scheduling
(Third Edition)
by Edward A. Silver,David F. Pyke,Rein Peterson
• Have you studied SCM before?
• Expectation from the class
Resources:
• Lecture notes will be provided at least one day before class
• Please print it and bring it to the class
• You are required to bring a scientific calculator in this class
• In the exam you are allowed to bring equations written in the
page.
Quiz
•Your name:
•Email:
•Contact Number
•Academic Background:
–Institute: BUET, SUST….
–Your specialty: IPE, ME, BBA…
–GPA: Undergrad
•Work: Yes/No
Term Paper
• A case of Supply Chain Management by analyzing industry
data
Presentation
• Based on the studied case
Dell’s Supply Chain
Dell’s Supply Chain
Samsung-
Manufacturing 50 percent of its mobile phones in Vietnam and
only 8 percent in Korea.
six mobile phone manufacturing facilities
Vietnam, China, India, Brazil, Indonesia, and Korea.

Apple-
Assembles the majority of Apple's iPhones in its Shenzen, China
Symphony
Walton
Global Supply Chain Perspective
Few products today are designed, manufactured and distributed in

a single facility that takes raw materials and converts them into
products for sale to customers
Products today are realized by a network of supplier,

manufacturers and distributors
This network is called the supply chain

Ultimate goal of a business organization?
Maximize profit
How to measure the performance of SCM?
Effective – producing the expected result.
Efficient – Performing or functioning in the best possible
manner with the least waste of time and effort.
Return on Net Investment (ROI) Is a very common

measure of managerial performance
ROI=Net Profit / Total Investment * 100
How ROI can effect Supply chain?

SCM-8605
Objective:
This module introduces Supply chain Management theory and its
application to the management of Supply chain systems.
Topics to be discussed:
Demand Planning
Tools of supply chain management
Today’s Class
Chapter 1,2&3 of the text book
What is a Supply Chain?
• All stages involved, directly or indirectly, in fulfilling a
customer request
• Includes manufacturers, suppliers, transporters, warehouses,
retailers, and customers
• Includes movement of products from suppliers to
manufacturers to distributors, but also includes movement of
information, funds, and products in both directions
• Typical supply chain stages: customers, retailers, distributors,
manufacturers, suppliers (Fig. 1.2)
• All stages may not be present in all supply chains
(e.g., no retailer or distributor for Dell) 1-15
The Objective of a Supply Chain
• Maximize overall value generated
• Supply chain value: difference between what the final
product is worth to the customer and the effort the supply
chain expends in filling the customer’s request
1-16
The Objective of a Supply Chain
• Example: Dell receives $2000 from a customer for a
computer (revenue)
• Supply chain incurs costs (information, storage,
transportation, components, assembly, etc.)
• Difference between $2000 and the sum of all of these costs is
the supply chain profit
• Supply chain profitability is total profit to be shared across all
stages of the supply chain
• Supply chain success should be measured by total supply
chain profitability, not profits at an individual stage
1-17
Decision Phases of a Supply Chain
• Supply chain strategy or design

• Supply chain planning
• Supply chain operation
1-18
Process View of a Supply Chain
• Cycle view: processes in a supply chain are divided into a
series of cycles, each performed at the interfaces between
two successive supply chain stages
• Push/pull view: processes in a supply chain are divided into
two categories depending on whether they are executed in
response to a customer order (pull) -Known demand
or in anticipation of a customer order (push)-forecasted
demand
1-19
Cycle View of Supply Chains
Customer
Customer Order Cycle
Retailer
Replenishment Cycle
Distributor
Manufacturing Cycle
Manufacturer
Procurement Cycle
Supplier
1-20
Examples of Supply Chains
• Gateway
• Zara
• Toyota
• Amazon
What are some key issues in these supply chains?
1-21
Supply Chain Performance: Achieving Strategic
Fit and Scope
• Competitive and supply chain strategies
• Achieving strategic fit
A company may fail because of a lack of strategic fit or
because its processes and resources do not provide the
capabilities to execute the desired strategy
2-22
How is Strategic Fit Achieved?
• Step 1: Understanding the customer and supply chain
uncertainty
• Step 2: Understanding the supply chain
• Step 3: Achieving strategic fit
2-23
Step 1: Understanding the Customer and
Supply Chain Uncertainty
• Identify the needs of the customer segment being served

• Quantity of product needed in each lot
• Response time customers will tolerate
• Variety of products needed
• Service level required
• Price of the product
• Desired rate of innovation in the product
2-24
Step 2: Understanding the Supply Chain
• How does the firm best meet demand?

• Supply chain responsiveness -- ability to
• respond to wide ranges of quantities demanded
• meet short lead times
• handle a large variety of products
• build highly innovative products
• meet a very high service level
• There is a cost to achieving responsiveness
• Supply chain efficiency: cost of making and delivering the product to the
customer
• Increasing responsiveness results in higher costs that lower efficiency
2-25
Understanding the Supply Chain: Cost-
Responsiveness Efficient Frontier
Responsiveness
High
Low
Cost
High Low
2-26
Step 3: Achieving Strategic Fit
Responsive
supply chain
Responsiveness
spectrum
Efficient supply
chain
Certain Implied Uncertain

demand uncertainty demand
spectrum
Uncertainty/Responsiveness Map 2-27

Step 3: Achieving Strategic Fit
All functions in the value chain must support the competitive strategy to achieve strategic fit
Obstacles to Achieving Strategic Fit

• Increasing variety of products
• Decreasing product life cycles
• Globalization
• Difficulty executing new strategies
• Multiple products and customer segments
• Competitive changes over time
2-28
Comparison of Efficient and Responsive
Supply Chains
Efficient Responsive
Primary goal Lowest cost Quick response
Product design strategy Min product cost Modularity to allow
postponement
Pricing strategy Lower margins Higher margins
Mfg strategy High utilization Capacity flexibility
Inventory strategy Minimize inventory Buffer inventory
Lead time strategy Reduce but not at expense Aggressively reduce even if
of greater cost costs are significant
Supplier selection strategy Cost and low quality Speed, flexibility, quality
Transportation strategy Greater reliance on low cost Greater reliance on
modes responsive (fast) modes
2-29
Drivers of Supply Chain Performance
• Facilities
The physical locations in the supply chain network where product
is stored, assembled, or fabricated
• Inventory
All raw materials, work in process, and finished goods within a
supply chain
• Transportation
Moving inventory from point to point in the supply chain
Drivers of Supply Chain Performance
• Information
Data and analysis concerning facilities, inventory, transportation, costs,
prices, and customers throughout the supply chain
• Sourcing
Who will perform a particular supply chain activity
• Pricing
How much a firm will charge for the goods and services that it makes
available in the supply chain
A Framework for Structuring Drivers
Overall trade-off: Responsiveness versus efficiency
Inventory
Objective is to have right form, location, and quantity of inventory
that provides the right level of responsiveness at the lowest possible
cost
• Inventory Turnover
• Inventory turnovers (inventory turns, or stock turns) is a metric used to
compare the performance of divisions in a firm
• Two divisions, Refrigerator and Television, of company Walton have

reported the same annual sales. However, Ref reports 2.3 inventory
turns, and TV reports 3.5 inventory turns. Which division is
performing better?
Inventory
• Example
• For the fiscal year ended Jan. 2017, Wal-Mart Stores reported annual sales of
$485.14 billion, yearly average inventory of $43.04 billion, and an annual cost of
goods sold (or cost of sales) of $361.25 billion.
• Walmart's inventory turnover for the year equals:
• $361.25 billion ÷ $43.04 billion = 8.39
• Its days inventory equal:
• (1 ÷ 8.39) x 365 = 43 days
• This indicates that Walmart sells its entire inventory within a 43-day period, which is
quite impressive for such a large, global retailer.
Assignment
1. In Bangladesh, the largest imported substance is iron and iron based
metal. Find out the best price of 10kg imported iron.
2. What is the reason behind the manufacturing industry of Apple in
China instead of USA?
Thank You

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OMT 8604 Logistics in

Supply Chain Management

Worked in supply chain management

Nayema Rahman Ema

Few products today are designed, manufactured and distributed in

Products today are realized by a network of supplier,

This network is called the supply chain

Return on Net Investment (ROI) Is a very common

How ROI can effect Supply chain?

• Supply chain strategy or design

What are some key issues in these supply chains?

• Identify the needs of the customer segment being served

• How does the firm best meet demand?

Certain Implied Uncertain

Uncertainty/Responsiveness Map 2-27

Obstacles to Achieving Strategic Fit

• Two divisions, Refrigerator and Television, of company Walton have

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