Cadena de suministro

Mtro. William H. Delano Frier

Module 1
Supply Chain I

Cadena de suministro | Profesor William H. Delano Frier

Strategic Deployment
Vision
Strategy
(Business Objectives)

Supply Chain Strategy

Objectives Initiatives
Process Deployment
Plan

Supply

Produce

Deliver

Performance Management
Organization Deployment

Collaboration and connection with all IT and Communications

members
Cadena de suministro | Profesor William H. Delano Frier

What is customer value

The set of tangible and
intangible properties and
services, even emotional, to
be delivered in exchange for
the price.
Customer satisfaction is achieved when a
higher value is delivered

Cadena de suministro | Profesor William H. Delano Frier

Which is the customer value formula?

Product / Service Attributes

Quality

Innovation

Price

Image

Relationship

Shopping
Experience:
Deal
Availability
Service

On Time

Customer pull
factors:
Brand
Reputation

Cadena de suministro | Profesor William H. Delano Frier

Customer
Value

Expectation
Receive more
for less.

What is value chain?*

The sequence of processes and / or businesses that
add value, from the design to the final product
/service.
Innovation
Identify the
customer
needs

Design

Develop

Time to Market

Operations
Produce

Sell
Distribute

Serve

Satisfy the
customer
needs

Supply Chain

*Michael Porter 1980

Cadena de suministro | Profesor William H. Delano Frier

What is value flow analysis?

The study of each step, process or business involved
in the value chain to provide each customer with the
features that are promised in the value proposition
and expected to be delivered in exchange for a
competitive price.
Firestone

Mazda

Value 1

Distributors

Customers
Customer
Value

Value 3
Value 2

Cadena de suministro | Profesor William H. Delano Frier

Value 4

Supply Chain
Series of processes integrating companies in a
customer-supplier relationship, along the value chain
of a product or service, enabling them to manage
the planning, procurement, production and delivery,
from raw material to the end user or final customer.

Plan

Source

Cadena de suministro | Profesor William H. Delano Frier

Produce

Deliver

Supply Chain
Main Features

Change Management:

Global trends
Customer Real Demand: Speed,
flexibility at the lowest price
New software: ERP, new applications
New technologies

internet, intranet, extranet

Communications / Wireless
Information
Tele-conference and Tele-connection
Bar Codes, RFID

Cadena de suministro | Profesor William H. Delano Frier

Supply Chain
Main Features
Supply Chain Activities:

Demand forecasting
Supplier selection
Material ordering
Inventory management
Production planning
Shipment and delivery
Information exchange management

Cadena de suministro | Profesor William H. Delano Frier

Supply Chain Operations Reference

Model (SCOR):Basic Management
Processes
Plan-Source-Make-Deliver-Return
Plan

Deliver

Make

Source
Return

Deliver
Return

Suppliers
Supplier

Source

Make

Return

Supplier
(Internal or
External)

Deliver
Return

Your Company

Source
Return

Make

Deliver

Source

Return

Customer
(Internal or
External)

Customers
Customer

Plan-Source-Make-Deliver-Return provide the organizational structure of the SCOR-model

Cadena de suministro | Profesor William H. Delano Frier

SCOR
Plan
Establish plans to position supply and resources to meet demand.

Source
Order and receive materials and products.

Make
Schedule and manufacture, repair, remanufacture or recycle materials and
products.

Deliver

Receive, schedule, pick, pack and ship orders.

Return
Request, approve and determine disposal of products and assets.
Cadena de suministro | Profesor William H. Delano Frier

SCOR
The SCOR framework is the basis for all supply chain
management.
The metrics in SCOR provide a solid foundation for
measuring performance and identifying priorities.
The processes are the common language in your
supply chain operations.

Cadena de suministro | Profesor William H. Delano Frier

SCOR
Metrics

Reliability - Perfect Order Fulfillment

Responsiveness - Order Fulfillment Cycle Time
Agility - Flexibility, Adaptability, Value-at-Risk
Cost - Total Cost to Serve
Assets - Cash-to-Cash Cycle Time, Return on Assets, Return
on Working Capital

Cadena de suministro | Profesor William H. Delano Frier

Performance Metrics

Customer-Facing
Supply Chain
Reliability

Responsiveness

InternalFacing

Flexibility

Cost

Performance Attributes
Delivery performance
Fill rate
Perfect order fulfillment
Order fulfillment lead time
Supply chain response time
Production flexibility

Total SCM cost

Cost of goods sold
Value-added productivity
Warranty cost or returns processing cost
Cash-to-cash cycle time
Inventory supply days
Asset turns

Cadena de suministro | Profesor William H. Delano Frier

Assets

Typical Supply Chain Diagram

Demand
Local Sup.
Import Sup.

Outsourcing
Others

Packaging

Asembly

General WH
Part Production

Distributor N

Cust.

Distributor S

Cust.

Exports

Cust.

Supply Chain

Cust.

Supply

LEAD
TIME

Flows:
Information
Inventory
CASH

Source
Cadena de suministro | Profesor William H. Delano Frier

Make

Deliver

Logistics
Key Concepts
Logistics is:
Management of warehousing, product , service
and information flows across an organization.

Cadena de suministro | Profesor William H. Delano Frier

Logistics
Objectives and Targets:
The correct
product

The correct
quantity

Flexibility

Cadena de suministro | Profesor William H. Delano Frier

The exact
time

Reliability in
delivery

At the
Lowest cost

Waiting time
on delivery

Inventory
level

Logistics
Main Features
Logistics Elements:
Materials Management:
The supply and delivery of raw materials or
semi-finished product

Materials Flow System:

The ability to plan the finished product
manufacturing process
make them available

Physical Distribution:
The finished product delivery to the customer
Cadena de suministro | Profesor William H. Delano Frier

Logistics
Main Features
Target
Turn the Supply Chain into an efficient process with
customer satisfaction, where the overall Supply Chain
effectiveness is more important than each
departments individual effectiveness.

Cadena de suministro | Profesor William H. Delano Frier

20

LogisticsProcess of Analysis
Know the
Customer

Understand
Information Flow

Cadena de suministro | Profesor William H. Delano Frier

Know the
Product

Understand the
Process

Cadena de suministro | Profesor William H. Delano Frier

Know the customer

Know and understand the customer.
Your current customers
Demography
Current and potential
Income levels?

Who are your potential customers?

How could these customers be grouped?
What sales percentage represents each group?
How do communication systems (telephone, fax, e-mail, internet)
affect relationships with the customer?
What do customers expect from you?
At what level are your competitors able to meet the needs of your
customers?

Cadena de suministro | Profesor William H. Delano Frier

Know the products

Know the products

How many products are there?

Where are they?
What sales percentage do they represent?
What is their life cycle?
What is the product mix of these products?

Cadena de suministro | Profesor William H. Delano Frier

Understand the process

Process Flow

Process by lines
Process by batches
Assembly process
Continuous process
Project flow

Execution Strategies
MTO (make to order)
MTS (make to stock)

Cadena de suministro | Profesor William H. Delano Frier

Understand the information

flow
What information is needed for effective decision
making at each stage of the supply chain.
What information should flow between each stage
of the supply chain.

Cadena de suministro | Profesor William H. Delano Frier

What is a chain?
P&G / KC

COSTCO /
WalMart

Plastic
Manufacturing

Packaging
Material

Chemical
Industry

Paper
Industry

Cadena de suministro | Profesor William H. Delano Frier

Supermarket

Customer needs a
soapbar and
goes to the
store.

Chemical
Industry

Wood
Industry

Performance Indicators
A global overview is required to
assess performance.
Performance measures should be
focused on the values or factors that
assess the overall performance, total
value or total cost.
The main measure of performance is
customer satisfaction Optimal
service levels are required from the
supplier to the customer through the
supply chain.
Cadena de suministro | Profesor William H. Delano Frier

Performance Indicators
Customer Service + Quality

Efficiency

Suppliers

Effectiveness

Adding
Value

Inputs

Productivity

Benefit
Cadena de suministro | Profesor William H. Delano Frier

Outputs

Customers

Customer
Service

Results

Performance Indicators
Effectiveness:
Correct fulfillment of commitments in time and in
the agreed terms.

Efficiency:
Resource that we expect to consume / resource
currently being used.
Cadena de suministro | Profesor William H. Delano Frier

Performance Indicators
Productivity:
Output Indicators / Input
Indicators for a certain time
period.
Benefit:
Relationship between the
achieved results and costs.
Cadena de suministro | Profesor William H. Delano Frier