Samenvatting supply chain
management
1
,Inhoud
1 Chapter 1 - SC planning ................................................................................................................... 5
0. What is your definition of planning?........................................................................................... 5
0.1. Planning ............................................................................................................................. 5
0.2. What is then “supply chain planning”? ............................................................................. 5
1. Strategy & value .......................................................................................................................... 5
1.1. Vision, mission & core values ............................................................................................ 5
1.2. Generic corporate strategies - Strategy is about making choices ..................................... 6
1.3. The concept of “value proposition” .................................................................................. 7
1.4. Translation Corporate Strategy into Functional Strategies.............................................. 10
2. SC strategy................................................................................................................................. 13
2.1. Achieving “Strategic Fit”.................................................................................................. 13
2.2. Customer Order Decouple Point ..................................................................................... 14
3. Demand management .............................................................................................................. 19
3.1. Product Life Cycle Management ..................................................................................... 19
3.2. Forecasting ...................................................................................................................... 20
4. Supply Management ................................................................................................................. 24
4.1. What is “supply management” ....................................................................................... 24
4.2. Supply Issues ................................................................................................................... 24
4.3. Sourcing ........................................................................................................................... 25
4.4. Inventory management ................................................................................................... 25
4.5. Capacity ........................................................................................................................... 30
5. The planning Hierarchy ............................................................................................................. 31
5.1. The manufacturing planning & control framework......................................................... 31
5.2. Business planning ............................................................................................................ 33
5.3. Sales & operations planning ............................................................................................ 34
5.4. Master scheduling ........................................................................................................... 38
5.5. Material requirement planning (MRP) ............................................................................ 41
2 Chapter 2 – Procurement .............................................................................................................. 44
0. Introduction .............................................................................................................................. 44
0.1. Procurement vs purchasing ............................................................................................. 44
0.2. What are companies buying? .......................................................................................... 45
0.3. Procurement process ...................................................................................................... 49
0.4. Role of procurement ....................................................................................................... 50
2
, 0.5. (Changing) Business context ........................................................................................... 53
0.6. Importance of procurement ............................................................................................ 54
0.7. Digitalization .................................................................................................................... 54
1. Strategic procurement .............................................................................................................. 55
1.1. SRM (supplier relationship management) ...................................................................... 55
1.2. Managing value and risk ................................................................................................. 60
2. Procurement process ................................................................................................................ 63
2.1. Specifying ........................................................................................................................ 63
2.2. Selecting .......................................................................................................................... 65
2.3. Contracting ...................................................................................................................... 66
2.4. Ordering .......................................................................................................................... 69
2.5. Deliveries/follow up ........................................................................................................ 69
2.6. Performance follow up .................................................................................................... 71
3. E-Procurement .......................................................................................................................... 73
3.1. Definition ......................................................................................................................... 73
3.2. (Reverse) Auctions........................................................................................................... 73
3.3. E-Marketplace ................................................................................................................. 75
3.4. E-commerce .................................................................................................................... 75
3 CH3 – Execution ............................................................................................................................ 77
0. Order fulfilment ........................................................................................................................ 77
0.1. Introduction..................................................................................................................... 77
0.2. Order Delivery Management as a process ...................................................................... 80
0.3. Inventory Management................................................................................................... 85
0.4. Material Management & Quality Control ....................................................................... 93
0.5. Reverse Logistics.............................................................................................................. 97
0.6. Service Parts Management ............................................................................................. 99
1. Warehouse management........................................................................................................ 100
1.1. Introduction................................................................................................................... 100
1.2. Warehouse design ......................................................................................................... 100
1.3. Warehouse processes ................................................................................................... 104
1.4. Warehouse equipment.................................................................................................. 108
1.5. Warehouse Management Systems (WMS).................................................................... 109
2. Execution & control ................................................................................................................. 111
2.1. introduction ................................................................................................................... 111
2.2. Supply chain excellence................................................................................................. 112
4 Collaboration ............................................................................................................................... 118
3
, 0. Introduction ............................................................................................................................ 118
1. Control Towers ........................................................................................................................ 120
1.1. Primary goals of a SCCT ................................................................................................. 120
1.2. Functions within a SCCT ................................................................................................ 120
1.3. Horizontal and vertical collaboration ............................................................................ 121
2. Customer integration & e-commerce ..................................................................................... 122
2.1. Traditional distribution vs e-commerce ........................................................................ 122
3. Supplier integration (VMI)....................................................................................................... 123
3.1. VMI vs consignment ...................................................................................................... 123
3.2. VMI ................................................................................................................................ 123
4. Outsourcing & strategic sourcing ............................................................................................ 125
4.1. Strategic sourcing .......................................................................................................... 125
4.2. Outsourcing ................................................................................................................... 125
4.3. Offshoring ...................................................................................................................... 126
4.4. Onshoring & nearshoring .............................................................................................. 126
5 Resilience .................................................................................................................................... 128
0. Introduction ............................................................................................................................ 128
0.1. Resilience vs centralisation ........................................................................................... 128
1. Supply chain risk management ............................................................................................... 129
1.1. Supply chain vulnerability ............................................................................................. 131
1.2. Managing supply risks: critical path assessments ......................................................... 131
2. A shift from lean to agile flows ............................................................................................... 134
2.1. Agile vs lean................................................................................................................... 134
3. Change management (basics) ................................................................................................. 136
3.1. Kotter change management .......................................................................................... 136
6 Innovation ................................................................................................................................... 137
4
, 1 Chapter 1 - SC planning
0. What is your definition of planning?
0.1. Planning
= fundamental management function, which involves deciding beforehand, what is, when en how it
is to be done and who is going to do it.
0.2. What is then “supply chain planning”?
SCP = the forward-looking process of coordinating assets to optimize the delivery of goods, services
and information from supplier to customer, balancing supply and demand
1. Strategy & value
1.1. Vision, mission & core values
A company wants to achieve long-term, sustainable, success. Therefore → plan needs to be made
that uses the organization’s resources in an optimal way, to achieve a competitive advantage
= the business strategy
- Contains which objectives a company wants to achieve
- Usually over a period of several years (+,-5)
- How the organization
o Will function and compete in its environment
o Satisfy customers
o Grow the business
o Manage the organization
o Develop its capabilities
o Achieve its financial objectives
5
, 1.1.1. Vision
- “The shared perception of the organization’s future” → what the organization will achieve
- Serves to communicate to all stakeholders (employees, investors …)
- What the business tends to become → an aspiration
1.1.2. Mission
- “The overall goal(s) for an organization set within the parameters of the business scope”
- To explain (in short) the company’s purpose(s) for being here
- Normally → 1 sentence
o Explaining a company’s culture, values & ethics
o What a company does and why
- While mission statement → remains unchanged for most part and represents who the
company is/aspires to be for the entirety of its existence
o Mission = a company’s identity
- Vision statement → can change
o Vision = company’s journey to accomplishing its mission
1.1.3. Values – corporate culture
- “The set of important assumptions that members of the company share. A system of shared
values about what is important and about how the company works”
- Influences the ways the company operates
- Business and ethical guideposts
- Needs to be displayed in the behavior of leaders and management
- Fit with mission and vision statement
1.2. Generic corporate strategies - Strategy is about
making choices
3 generic corporate strategies:
1. Product Leadership
2. Operational Excellence
3. Customer Intimacy
1.2.1. Product Leadership
- Newest and most advanced product, again and again
- Innovative products/services
- This requires high R&D + sales expenditures
6
, o Sales expenditures = costs you make to sell the product: promotion, marketing costs,
salaries of sales personnel
- Creativity
- Continuously monitoring trends
- Outperforming competitors by product specifics
- Example of such a company: Nike, Appel ...
1.2.2. Operational Excellence
- Low-cost
- No-nonsense service
- Focus on being the cheapest and easy to deal with
- This does NOT mean bad service
o Expl: no meals nor drinks at Ryanair, smaller airports: just flying
o Cutting down on less important dimensions or overperformance in aspects the
customer doesn’t value
- To make the business processes as optimal as possible. To be as efficient and effective as
possible
- Excellence in those parameters that the customers are very sensitive about
- Example of such a company: Aldi, Walmart, Ryanair ...
1.2.3. Customer Intimacy
- Have the best knowledge on your key customers
- Provide a ‘total solution’
o Relieving the customer from the job of selecting the appropriate products and
combining them into one solution
- This has even higher sales costs: it requires a lot of communication
- Example of such a company: Cool Blue, Singapore Airlines
1.3. The concept of “value proposition”
Now you have decided on a strategy: what is your “value proposition” towards your customers
- You should give your customer --> something they “value” and are willing to pay for
o Value vs price
- Sometimes --> hard to distinguish/differentiate yourself from competitors
o Especially in very mature markets
7
, 1.3.1. Customer & product segmentation
Customer segmentation
Common themes in the 2 cases:
- Geography: international/ regional customers (HQ, language)
- Size: large/medium/small in revenue (sales)
- Is the customer adding value? Y/N (installation, maintenance ...)
- Direct/indirect channel
Data to capture in customer segmentation:
Customer segmentation process
8
management
1
,Inhoud
1 Chapter 1 - SC planning ................................................................................................................... 5
0. What is your definition of planning?........................................................................................... 5
0.1. Planning ............................................................................................................................. 5
0.2. What is then “supply chain planning”? ............................................................................. 5
1. Strategy & value .......................................................................................................................... 5
1.1. Vision, mission & core values ............................................................................................ 5
1.2. Generic corporate strategies - Strategy is about making choices ..................................... 6
1.3. The concept of “value proposition” .................................................................................. 7
1.4. Translation Corporate Strategy into Functional Strategies.............................................. 10
2. SC strategy................................................................................................................................. 13
2.1. Achieving “Strategic Fit”.................................................................................................. 13
2.2. Customer Order Decouple Point ..................................................................................... 14
3. Demand management .............................................................................................................. 19
3.1. Product Life Cycle Management ..................................................................................... 19
3.2. Forecasting ...................................................................................................................... 20
4. Supply Management ................................................................................................................. 24
4.1. What is “supply management” ....................................................................................... 24
4.2. Supply Issues ................................................................................................................... 24
4.3. Sourcing ........................................................................................................................... 25
4.4. Inventory management ................................................................................................... 25
4.5. Capacity ........................................................................................................................... 30
5. The planning Hierarchy ............................................................................................................. 31
5.1. The manufacturing planning & control framework......................................................... 31
5.2. Business planning ............................................................................................................ 33
5.3. Sales & operations planning ............................................................................................ 34
5.4. Master scheduling ........................................................................................................... 38
5.5. Material requirement planning (MRP) ............................................................................ 41
2 Chapter 2 – Procurement .............................................................................................................. 44
0. Introduction .............................................................................................................................. 44
0.1. Procurement vs purchasing ............................................................................................. 44
0.2. What are companies buying? .......................................................................................... 45
0.3. Procurement process ...................................................................................................... 49
0.4. Role of procurement ....................................................................................................... 50
2
, 0.5. (Changing) Business context ........................................................................................... 53
0.6. Importance of procurement ............................................................................................ 54
0.7. Digitalization .................................................................................................................... 54
1. Strategic procurement .............................................................................................................. 55
1.1. SRM (supplier relationship management) ...................................................................... 55
1.2. Managing value and risk ................................................................................................. 60
2. Procurement process ................................................................................................................ 63
2.1. Specifying ........................................................................................................................ 63
2.2. Selecting .......................................................................................................................... 65
2.3. Contracting ...................................................................................................................... 66
2.4. Ordering .......................................................................................................................... 69
2.5. Deliveries/follow up ........................................................................................................ 69
2.6. Performance follow up .................................................................................................... 71
3. E-Procurement .......................................................................................................................... 73
3.1. Definition ......................................................................................................................... 73
3.2. (Reverse) Auctions........................................................................................................... 73
3.3. E-Marketplace ................................................................................................................. 75
3.4. E-commerce .................................................................................................................... 75
3 CH3 – Execution ............................................................................................................................ 77
0. Order fulfilment ........................................................................................................................ 77
0.1. Introduction..................................................................................................................... 77
0.2. Order Delivery Management as a process ...................................................................... 80
0.3. Inventory Management................................................................................................... 85
0.4. Material Management & Quality Control ....................................................................... 93
0.5. Reverse Logistics.............................................................................................................. 97
0.6. Service Parts Management ............................................................................................. 99
1. Warehouse management........................................................................................................ 100
1.1. Introduction................................................................................................................... 100
1.2. Warehouse design ......................................................................................................... 100
1.3. Warehouse processes ................................................................................................... 104
1.4. Warehouse equipment.................................................................................................. 108
1.5. Warehouse Management Systems (WMS).................................................................... 109
2. Execution & control ................................................................................................................. 111
2.1. introduction ................................................................................................................... 111
2.2. Supply chain excellence................................................................................................. 112
4 Collaboration ............................................................................................................................... 118
3
, 0. Introduction ............................................................................................................................ 118
1. Control Towers ........................................................................................................................ 120
1.1. Primary goals of a SCCT ................................................................................................. 120
1.2. Functions within a SCCT ................................................................................................ 120
1.3. Horizontal and vertical collaboration ............................................................................ 121
2. Customer integration & e-commerce ..................................................................................... 122
2.1. Traditional distribution vs e-commerce ........................................................................ 122
3. Supplier integration (VMI)....................................................................................................... 123
3.1. VMI vs consignment ...................................................................................................... 123
3.2. VMI ................................................................................................................................ 123
4. Outsourcing & strategic sourcing ............................................................................................ 125
4.1. Strategic sourcing .......................................................................................................... 125
4.2. Outsourcing ................................................................................................................... 125
4.3. Offshoring ...................................................................................................................... 126
4.4. Onshoring & nearshoring .............................................................................................. 126
5 Resilience .................................................................................................................................... 128
0. Introduction ............................................................................................................................ 128
0.1. Resilience vs centralisation ........................................................................................... 128
1. Supply chain risk management ............................................................................................... 129
1.1. Supply chain vulnerability ............................................................................................. 131
1.2. Managing supply risks: critical path assessments ......................................................... 131
2. A shift from lean to agile flows ............................................................................................... 134
2.1. Agile vs lean................................................................................................................... 134
3. Change management (basics) ................................................................................................. 136
3.1. Kotter change management .......................................................................................... 136
6 Innovation ................................................................................................................................... 137
4
, 1 Chapter 1 - SC planning
0. What is your definition of planning?
0.1. Planning
= fundamental management function, which involves deciding beforehand, what is, when en how it
is to be done and who is going to do it.
0.2. What is then “supply chain planning”?
SCP = the forward-looking process of coordinating assets to optimize the delivery of goods, services
and information from supplier to customer, balancing supply and demand
1. Strategy & value
1.1. Vision, mission & core values
A company wants to achieve long-term, sustainable, success. Therefore → plan needs to be made
that uses the organization’s resources in an optimal way, to achieve a competitive advantage
= the business strategy
- Contains which objectives a company wants to achieve
- Usually over a period of several years (+,-5)
- How the organization
o Will function and compete in its environment
o Satisfy customers
o Grow the business
o Manage the organization
o Develop its capabilities
o Achieve its financial objectives
5
, 1.1.1. Vision
- “The shared perception of the organization’s future” → what the organization will achieve
- Serves to communicate to all stakeholders (employees, investors …)
- What the business tends to become → an aspiration
1.1.2. Mission
- “The overall goal(s) for an organization set within the parameters of the business scope”
- To explain (in short) the company’s purpose(s) for being here
- Normally → 1 sentence
o Explaining a company’s culture, values & ethics
o What a company does and why
- While mission statement → remains unchanged for most part and represents who the
company is/aspires to be for the entirety of its existence
o Mission = a company’s identity
- Vision statement → can change
o Vision = company’s journey to accomplishing its mission
1.1.3. Values – corporate culture
- “The set of important assumptions that members of the company share. A system of shared
values about what is important and about how the company works”
- Influences the ways the company operates
- Business and ethical guideposts
- Needs to be displayed in the behavior of leaders and management
- Fit with mission and vision statement
1.2. Generic corporate strategies - Strategy is about
making choices
3 generic corporate strategies:
1. Product Leadership
2. Operational Excellence
3. Customer Intimacy
1.2.1. Product Leadership
- Newest and most advanced product, again and again
- Innovative products/services
- This requires high R&D + sales expenditures
6
, o Sales expenditures = costs you make to sell the product: promotion, marketing costs,
salaries of sales personnel
- Creativity
- Continuously monitoring trends
- Outperforming competitors by product specifics
- Example of such a company: Nike, Appel ...
1.2.2. Operational Excellence
- Low-cost
- No-nonsense service
- Focus on being the cheapest and easy to deal with
- This does NOT mean bad service
o Expl: no meals nor drinks at Ryanair, smaller airports: just flying
o Cutting down on less important dimensions or overperformance in aspects the
customer doesn’t value
- To make the business processes as optimal as possible. To be as efficient and effective as
possible
- Excellence in those parameters that the customers are very sensitive about
- Example of such a company: Aldi, Walmart, Ryanair ...
1.2.3. Customer Intimacy
- Have the best knowledge on your key customers
- Provide a ‘total solution’
o Relieving the customer from the job of selecting the appropriate products and
combining them into one solution
- This has even higher sales costs: it requires a lot of communication
- Example of such a company: Cool Blue, Singapore Airlines
1.3. The concept of “value proposition”
Now you have decided on a strategy: what is your “value proposition” towards your customers
- You should give your customer --> something they “value” and are willing to pay for
o Value vs price
- Sometimes --> hard to distinguish/differentiate yourself from competitors
o Especially in very mature markets
7
, 1.3.1. Customer & product segmentation
Customer segmentation
Common themes in the 2 cases:
- Geography: international/ regional customers (HQ, language)
- Size: large/medium/small in revenue (sales)
- Is the customer adding value? Y/N (installation, maintenance ...)
- Direct/indirect channel
Data to capture in customer segmentation:
Customer segmentation process
8
