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"Bananas". Licensed under Creative Commons Attribution-Share Alike 2.5 via Wikimedia Commons http://commons.wikimedia.org/wiki/File:Bananas.jpg#mediaviewer/File:Bananas.jpg
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CTL.SC1x
- Supply Chain and Logistics Fundamentals
Lesson: Introduction to Supply Chains
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Five Questions
1.
2.
3.
4.
5.
Information (status)
Material (delivery)
Money (payment)
CTL.SC1x - Supply Chain and Logistics Fundamentals
Tire
Supplier
Supplier
Gear
Supplier
Retailer
Hardware
Supplier
Wholesaler
Customer
Supplier
Smelter
Pedal
Supplier
Bicycle
Casting
Plant
Retailer
Wholesaler
Frame
Supplier
Pigment
Supplier
Customer
Retailer
Paint
Supplier
Retailer
Customer
Chemical
Mfg
10
11
12
Image Source: Arntzen, B. MIT Center for Transportation & Logistics, Hi-Viz Research Project (2013)
CTL.SC1x - Supply Chain and Logistics Fundamentals
13
Manufacturers
Suppliers
Distributors
14
Retailer
Replenishment Cycle
Distributor
Manufacturing Cycle
Manufacturer
Procurement Cycle
Adapted from Chopra & Meindl Supply Chain Management
Supplier
15
Supplier
Firm
SRM
source
Supplier Relationship
Management
n
n
n
n
Sourcing
Negotiation
Buying
Design and Supply
Collaboration
ISCM
make, move, store
Internal Supply Chain
Management
n
n
n
n
Strategic Planning
Demand Planning
Supply Planning
Fulfillment
CRM
sell
Customer
Customer Relationship
Management
n
n
n
n
Marketing
Selling
Call Centers
Order Management
16
Source
S1 Source Stocked Products
P4 Plan Deliver
P5 Plan Returns
Make
Deliver
D1 Deliver Stocked Products
M1 Make-to-Stock
M2 Make-to-Order
M3 Engineer-to-Order
Customers
Suppliers
P2 Plan Source
Return
Deliver
Return
Source
Enable
Source: Supply Chain Council
CTL.SC1x - Supply Chain and Logistics Fundamentals
17
n
n
Inventory Control
n
n
n
Warehousing
n
n
n
Materials Handling
n
n
n
Transportation
n
n
n
Customer Service
n
n
Geographic
Product Line Specific
Planning Group
n
n
n
Facility Location
Network Design
Demand Planning
18
Systems Perspective
of Supply Chains
CTL.SC1x - Supply Chain and Logistics Fundamentals
19
Transportation
Order Processing
Material Handling
Inventory Mgmt
Warehousing
Purchasing
20
Transportation
Order Processing
Material Handling
Inventory Mgmt
Warehousing
Purchasing
21
Transportation
Order Processing
Material Handling
Inventory Mgmt
Warehousing
Purchasing
Manufacturing
Product Design
Objective:
wDesign, build, and deliver at lowest total cost
Variables:
wSelect carrier to tender each load to
wSelect time windows to deliver
wSelect when to ship what from where
wSelect where to stock which form of product
Constraints:
wDeliver within negotiated time frame
22
Retailer
Customer Svc
Transportation
Order Processing
Material Handling
Inventory Mgmt
Warehousing
Purchasing
Manufacturing
Product Design
Supplier
Objective:
wMaximize on-shelf availability
Variables:
wSelect carrier to tender each load to
wSelect time windows to deliver
wSelect when to ship what from where
wSelect where to stock which form of
product
wSelect contract relationships
wSelect who should control replenishment
wWhich channel member should perform
which function
Constraints:
wTotal delivered cost to shelf
23
24
25
26
Why do we care?
27
Why do we care?
Supply Chains . . .
n
n
n
By Wsvan; cropped by Beyond My Ken (talk) 01:29, 14 October 2013 (UTC) (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (
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"Mini Shocks" by Avsar Aras - Own work. Licensed under Creative Commons Attribution-Share Alike 3.0 via Wikimedia Commons - http://commons.wikimedia.org/wiki/
CTL.SC1x
- Supply Chain and Logistics Fundamentals
Lesson: Introduction to Supply Chains
File:Mini_Shocks.JPG#mediaviewer/File:Mini_Shocks.JPG
28
4.4
4.2
4
3.8
3.6
3.4
3.2
3
2.8
2.6
2.4
2.2
2
Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 May-14 Nov-14
Data Source: U.S. Energy Information Administration, http://www.eia.gov/petroleum/gasdiesel/diesel_proc-methods.cfm
CTL.SC1x - Supply Chain and Logistics Fundamentals
29
Percentage of US GDP
14.0%
Year
1981
1985
1990
1995
2000
2005
2010
2013
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
1980
1985
1990
1995
2000
2005
2010
2015
Year
US Inventory Holding Cost
US Transportation Cost
Data Sources: Council of Supply Chain Management (2014) 25th Annual State of Logistics Report
CTL.SC1x - Supply Chain and Logistics Fundamentals
30
Logistics
Supply Chain
Key Skills
Technically Narrow
Influence
Leadership
Hierarchical, Direct,
Hard
Risk Management
Measurement
Robust or Reactionary
Coordination
Single Focus
Technology
Approach
Isolated Optimization
Technology
Platform
Self-Hosted, On-site
Scope / Reach
Regional / National
Multi-faceted
Visibility & Coordination
Cloud or SaaS
Global / Multi-National
31
caplice@mit.edu
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