SUPPLY CHAIN CLASS notes
ISCM 2
Week 1- Planning (Guide to plan)
Inventory- Why?
⁃ protect against uncertainty
⁃ balancing supply and demand
⁃ anticipation stock
⁃ stabilise manufacturing
⁃ protect against quality defects
⁃ cost reduction
Types of inventory:
1. Cycle stock
2. Safety stock
3. In transit stock
Demand
Describing the demand
⁃ level: low or high
⁃ frequency: fast and slow
⁃ patterns: stable, trend or seasonal
Demand product classi cation:
⁃ 20% of items: fast movers
⁃ 30% of items: medium movers
⁃ 50% of items: slow movers
Demand & Supply planning:
Forecasting demand:
1. Qualitative method
⁃ experience
⁃ common sense
2. Quantitative method
⁃ time series based on historical data
⁃ statistical models
Thee Sales and Operations Planning is a concept of
INTEGRATED business planning. It is de ned as the process
of constantly realigning decisions in SALES, MARKETING, DEMAND AND SUPPLY areas
with the aim to synchronise with the STRATEGIC FINANCIAL plan. (Scott et al. 2011)
*1. What is inventory and why do company’s hold inventories?
2. How do we describe demand? What approaches are there to forecasting?
3. What factors help a S&OP plan be successful?
4. What factors cause S&OP to fail?
fi fi
, *Make draft of the planning activities in Zara (Assignment doc, chapter 2)
Week 2 - Strategy (Guide to strategy)
Chapter 3 of Zara
What is the company strategic view?- mission, vision, competitive strategy, how does it
translate to the functional strategy
Check BS pp
Corporate strategy: Mission- Goal- Objective- Strategy- Actions- Rewards
3 generic strategic options (its about focus, trade-o s)
COMPETITIVE STRATEGIES:
1. Operational excellence (price plays a big role; process-centric- service management;
lowest price and hassle free service)- Ikea, Mc Donalds
2. Product leadership (innovation; knowledge-centric; quality pushing performance
boundaries)- Apple, BMW
3. Customer intimacy (relationship centric; business relationship management)-
Amazon, Ritz Carlton, Volkswagen Golf
*the competitive strategy must always align with the functional strategy
! Strategic decision making in SCM (3 drivers):
1. Segmentation:
The 4 drivers of SC performance:
a. Inventory (where do I put it and how much?)
b. Information (how do I communicate with my suppliers, customers?; information ow:
proof of delivery, invoices, order inquiry etc)
c. Facilities (warehouses, factories, distribution centers)
d. Transport
2. De-coupling point= the point in the SC where supply and demand meet; the point in
the SC where the product is linked to a speci c customer order (the order
penetration point- when the order is internalised; external becomes internal) -where
does supply meet demand?
The 5 inventory strategies for the de-coupling point:
a. Purchase and make to order (No inventory at all; totul e la comanda)
b. Make to order
c. Assemble to order
d. Make to stock
e. Make and deliver to stock (stock is already there; a supermarket)
3. Lean and agile - e cient vs adaptive
a. Lean- supply at lowest cost
ffi fi ff fl
ISCM 2
Week 1- Planning (Guide to plan)
Inventory- Why?
⁃ protect against uncertainty
⁃ balancing supply and demand
⁃ anticipation stock
⁃ stabilise manufacturing
⁃ protect against quality defects
⁃ cost reduction
Types of inventory:
1. Cycle stock
2. Safety stock
3. In transit stock
Demand
Describing the demand
⁃ level: low or high
⁃ frequency: fast and slow
⁃ patterns: stable, trend or seasonal
Demand product classi cation:
⁃ 20% of items: fast movers
⁃ 30% of items: medium movers
⁃ 50% of items: slow movers
Demand & Supply planning:
Forecasting demand:
1. Qualitative method
⁃ experience
⁃ common sense
2. Quantitative method
⁃ time series based on historical data
⁃ statistical models
Thee Sales and Operations Planning is a concept of
INTEGRATED business planning. It is de ned as the process
of constantly realigning decisions in SALES, MARKETING, DEMAND AND SUPPLY areas
with the aim to synchronise with the STRATEGIC FINANCIAL plan. (Scott et al. 2011)
*1. What is inventory and why do company’s hold inventories?
2. How do we describe demand? What approaches are there to forecasting?
3. What factors help a S&OP plan be successful?
4. What factors cause S&OP to fail?
fi fi
, *Make draft of the planning activities in Zara (Assignment doc, chapter 2)
Week 2 - Strategy (Guide to strategy)
Chapter 3 of Zara
What is the company strategic view?- mission, vision, competitive strategy, how does it
translate to the functional strategy
Check BS pp
Corporate strategy: Mission- Goal- Objective- Strategy- Actions- Rewards
3 generic strategic options (its about focus, trade-o s)
COMPETITIVE STRATEGIES:
1. Operational excellence (price plays a big role; process-centric- service management;
lowest price and hassle free service)- Ikea, Mc Donalds
2. Product leadership (innovation; knowledge-centric; quality pushing performance
boundaries)- Apple, BMW
3. Customer intimacy (relationship centric; business relationship management)-
Amazon, Ritz Carlton, Volkswagen Golf
*the competitive strategy must always align with the functional strategy
! Strategic decision making in SCM (3 drivers):
1. Segmentation:
The 4 drivers of SC performance:
a. Inventory (where do I put it and how much?)
b. Information (how do I communicate with my suppliers, customers?; information ow:
proof of delivery, invoices, order inquiry etc)
c. Facilities (warehouses, factories, distribution centers)
d. Transport
2. De-coupling point= the point in the SC where supply and demand meet; the point in
the SC where the product is linked to a speci c customer order (the order
penetration point- when the order is internalised; external becomes internal) -where
does supply meet demand?
The 5 inventory strategies for the de-coupling point:
a. Purchase and make to order (No inventory at all; totul e la comanda)
b. Make to order
c. Assemble to order
d. Make to stock
e. Make and deliver to stock (stock is already there; a supermarket)
3. Lean and agile - e cient vs adaptive
a. Lean- supply at lowest cost
ffi fi ff fl
