Enterprise Supply Chain Management E-Book

Vivek Sehgal

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 324

Veröffentlichungsjahr: 2009

Beschreibung

ENTERPRISE SUPPLYCHAIN MANAGEMENT Integrating Best-in-Class Processes Is supply chain management all about forecasting? Or is it just a warehousing and transportation function? Demystifying the mystery supply chain management is for many, Enterprise Supply Chain Management: Integrating Best-in-Class Processes offers a comprehensive look at the role of this field within your own organization. Written by industry leader Vivek Sehgal, this book invites you to evaluate your current supply chain practices and leverage its best in class concepts to your own challenges. Drawing from the author's abundant research and analysis, this resourceful book shows how to manage a supply chain across an enterprise, encompassing technological, financial, procurement, and operational issues. You will find in this book a thoroughly functional view of supply chain, so you can readily understand the meaning of processes and where they fit into your company's big picture. This essential book covers: * A primer on supply chain and finance * Elements of a supply chain model * The scope of the supply chain * Demand and supply planning * Supply chain network design * Transportation and warehouse management * Supply chain collaboration * Reverse logistics management * Supply chain technology Whether you are a business manager, an IT manager, or a supply chain student, if you are looking for more of a comprehensive understanding of what each of the supply chain processes in your organization brings to the table and how each functions as part of the whole, Enterprise Supply Chain Management: Integrating Best-in-Class Processes is for you. Immensely functional on all aspects of supply chain management, this guide clearly explains how each process works and the relationships among them, allowing you to start implementing best-in-class approaches in your organization.

Leseprobe

Table of Contents

Title Page

Copyright Page

Dedication

Preface

Acknowledgements

PART I - Introduction

CHAPTER 1 - What Is a Supply Chain?

Definitions

Physical Manifestation of a Supply Chain

Elements of a Supply Chain Model

CHAPTER 2 - Scope of the Supply Chain

Core Supply Chain Functions

Extended Supply Chain Functions

Supply Chain: Planning versus Execution

Overview of the Supply Chain Landscape

PART II - Supply Chain Planning

CHAPTER 3 - Supply Chain Network Design

Inputs and Outputs of the Supply Chain Network Design Process

Related Subprocesses

CHAPTER 4 - Demand Planning

Demand Forecasting

Allocation Planning

CHAPTER 5 - Supply Planning

Inventory Planning

Replenishment Planning

Production Planning

Logistics Capacity Planning

PART III - Supply Chain Execution

CHAPTER 6 - Supply Management

Strategic Sourcing

Replenishment Execution

Production Scheduling

Supplier Performance Management

Global Trade Management

CHAPTER 7 - Transportation Management

Transportation Planning and Execution

Freight Audit and Verification

Fleet Management

CHAPTER 8 - Warehouse Management

Inbound Warehouse Operations

Outbound Warehouse Operations

Warehouse Inventory Management

Yard Management

Warehouse Labor Management

Slotting Optimization

Billing Management and Cost Allocation

CHAPTER 9 - Reverse Logistics Management

Returns Disposition Determination

Logistics Planning and Execution for Returns

PART IV - Supply Chain Collaboration

CHAPTER 10 - Collaborative Processes

Collaborative Planning Processes

Collaborative Execution Processes

Collaborative Performance Management

APPENDIX A - Supply Chain Technology

APPENDIX B - RFID Technology

APPENDIX C - Understanding Cross-docking

APPENDIX D - Supply Chain and Finance: A Quick Primer

APPENDIX E - How Green Is Your Supply Chain?

APPENDIX F - Commonly Used EDI Transaction Codes

APPENDIX G - Incoterms (International Commercial Terms)

Index

Copyright © 2009 by Vivek Sehgal. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Sehgal, Vivek.

Enterprise supply chain management : integrating best in class processes / Vivek Sehgal. p. cm.

Includes index.

eISBN : 978-0-470-50283-9

1. Business logistics. I. Title.

HD38.5.S44 2009

658.5-dc22

2009005643

To my parents

Preface

When I started my career in supply chain more than a decade ago, it was still an emerging field. There were very few books in the marketplace on supply chains, no courses being taught, and most companies were just learning about the new opportunities supply chain management could provide them. The solution providers were similarly trying to define the space and simultaneously establish their thought leadership in the process. For most people in general, supply chains were a mystery, and I remember the difficulty in explaining to my fellow travelers on my frequent consulting trips about what I do for a living.

Enterprise resource planning (ERP) solution vendors had been offering their master resource planning (MRP) based scheduling solutions for some time, primarily targeted at manufacturers; distribution resource planning (DRP) evolved for retailers, which was similar in concept to MRP but adapted itself to more distribution-intensive planning.

Today, it is clear that supply chains are here to stay. Most companies have established supply chain organizations, and supply chain solutions have matured into well-integrated suites of applications. However, most books on supply chain are still either focused on the science (such as forecasting) behind supply chain applications or specialize in a very narrowly defined area such as warehousing or transportation. These approaches leave out the big picture and deprive prospective students and practitioners of an overall understanding of the scope that supply chains cover and how they fit into the enterprise.

It was with the intention of providing the bigger picture that I started to put together this book. The objective is to provide a high-level understanding of all supply chain areas and establish the relationships among them. The book covers these processes in a generic fashion without any specific industry vertical in mind. The basic concepts of supply chain management are similar and apply to all industry verticals with some variations. The examples provided are sometimes specific to an industry; this is simply to provide the most relevant example while describing a function. This book does not go into a deeper specialized discussion on any specific function or solution but otherwise covers a wide scope of supply chain functions in the enterprise.

Of course, generalizing such a vast area always poses challenges. There are several variations of every concept when it is deployed in practice; the terms used are not quite standard across the industry. Also, relative organization of business processes and their subfunctions is always debatable. I have pushed ahead with generalizing when possible, defining industry terms where relevant, and providing context for organizing the functions together as I thought fit. Practicing readers may find it organized a little differently from what they have seen elsewhere, so I wanted to establish my methodology up front.

The objective of this book is to provide an appreciation for the supply chain management functions for the enterprise. While specific industries have different challenges, there are common supply chain concepts and processes that run across the industry spectrum. I believe that understanding these supply chain processes offers an opportunity across industries to evaluate their current supply chain practices and leverage the best-in-class concepts to their own challenges.

Supply chain management as a discipline primarily evolved to manage the flow of material required to support the business of the enterprise. The business, therefore, dictates the characteristics of such flow. For example, supply chains for the manufacturing industries address the flow of material during the buy, make, distribute, and sell processes, while retail industries might not care much about the “make” operations. Whereas both verticals in the example require executing the buy, distribute, and sell processes, these processes differ among the different industries. However, the underlying concepts, the reasons to establish and execute a process, the questions that a process addresses, and the data inputs and outputs of these processes remain closely related across all industry verticals.

Therefore, this book looks at supply chain processes from an enterprise point of view, and describes the underlying concept for a specific process, what it achieves, and how it is generally executed. I have intentionally kept these descriptions generic, though I have used examples to point out the most relevant differences among prominent industry verticals.

Manufacturing industries typically have large asset investments in manufacturing facilities and skilled resources. These industries may also have substantial inventories in raw materials and work-in-progress to support their manufacturing operations. Therefore, the prominent themes for a manufacturing supply chain are establishing the optimal product mix through good demand planning, managing raw material supplies for consistent production runs, and managing the assets, resources, and inventories for optimal utilization. The manufacturing supply chains typically have a smaller footprint of items and facilities, and a more manageable network. However, creating an optimal manufacturing plan that simultaneously constrains on available material, resources, and process sequence is among the hardest problems to solve even with the recent advances made in mathematical modeling of such situations. The variations in the manufacturing business models pose their own challenges to understand the best supply chain practices. Contract manufacturing, which has become very popular in the high-tech sector, has very different challenges compared with traditional manufacturing, and there are differences to consider among different types of manufacturing activities, such as discrete versus process, and make to order versus make to stock.

Retail supply chains also differ from the supply chains in other verticals. They are distribution intensive. They can be highly seasonal in nature. They typically do not model hard capacity constraints, though they can benefit from such modeling. And multi-echelon planning is still in its infancy in the retail vertical.

Retailers also have other challenges in dealing with supply chain problems due to their extremely large volumes of master and transactional data. Depending on the retailer’s specialty, it can carry as much as a quarter-million products for sale with thousands of retail locations spread all over the world, and an equally large distribution network with tens of distribution centers. An average retailer also deals with thousands of suppliers that may be supplying the merchandise from an equally diverse number of locations. Add them up, and you are looking at an extremely large supply chain network with thousands of nodes and thousands of routes to optimize and manage.

I have also included some related topics at the end of the book in the appendices. These subjects are important to the practitioner from the point of view of general appreciation and awareness. Appendix A covers the subject of technology. Technology plays an important part in supply chain processes. It provides automation as well as decision-making capabilities through modeling and optimization of complex business scenarios. There are many options, and this appendix provides a quick overview for selecting and managing these technology deployments and the consequent organizational changes. Appendix B presents an overview of radio frequency identification (RFID) in the industry. While this technology has been around for some time, and shows considerable promise, it has not yet been widely adopted. This appendix summarizes the capabilities and looks at the possible reasons for low industry adoption. Appendix C discusses cross-docking as a supply chain strategy. It has been widely popular in recent years. However, it is a complex process and needs elaborate evaluation of current processes and attendant systems for successful deployment. Appendix D presents the relationship between the supply chain and finance. Supply chains closely affect the financial efficiency of corporations, and understanding how these operations affect the higher-level financial metrics establishes the foundation for making a successful case for supply chain initiatives. Appendix E is my attempt at predicting the future of supply chain processes. There is great awareness of the impact of human activity on the environment, and efforts are underway to develop business practices that are more environmentally friendly. I believe that supply chain processes will also evolve to align with this new world order, driven through legislation, or corporate fervor, or both. This appendix is an attempt at describing that logical evolution of supply chain management processes in years to come. Appendix F is a list of commonly used EDI transaction sets, and the last, Appendix G, provides an overview of the global trade terms from the International Chamber of Commerce.

Supply chain management has its unique challenges for all industries. If these challenges are understood and appreciated in advance, it can make supply chain transformations more predictable, productive, and manageable.

The target audience for this book is primarily corporate supply chain managers in business and IT who may or may not have an academic background in supply chain management. Supply chain students and the occasional practitioner may find this useful as well to learn about underlying concepts, processes, efficiencies, and metrics. The supply chain courses are relatively new offerings and most corporate managers have had to learn about supply chains on the job; this book is designed to help them in this endeavor. The book is intentionally written with no specific bias toward business or IT and covers both aspects where it makes sense. For example, most supply chain processes today are managed through technology solutions that are highly mathematical in nature. Understanding the theory of how physical supply chain elements are modeled in these solutions without going into the depths of mathematical modeling definitely provides business folks with a deeper appreciation of the solutions. By the same measure, their IT counterparts will do well to understand what exactly these processes provide to the business, how they impact a-day-in-the-life scenarios for the practitioners, and what metrics they impact.

The scope of supply chains is continuously emerging and expanding functionally, technologically, and geographically. This adds to the challenge of keeping up to date with the latest while simultaneously juggling the current problems that corporate supply chains face. For the purposes of keeping this book to a focused discussion, we have defined our own scope that we will treat as the core supply chain functions.

Acknowledgments

I am thankful to many people for helping me in this endeavor: to my guide and mentor, Pervinder Johar, for his comments and feedback; to Karen Etzkorn, one of the most charismatic leaders I have had the opportunity to learn from; to Yasser Alkazzaz, for his feedback and support throughout the project; and to Randy Hill, a friend and colleague, for his unbridled enthusiasm.

PART I

Introduction

CHAPTER 1

What Is a Supply Chain?

Various definitions abound for supply chain. These definitions change with the industry vertical and the context. We will stick to a generic definition that defines supply chain as the flow and management of resources across the enterprise for the purpose of maintaining the business operations profitably. This really is an extremely generic definition, and therefore may be fuzzy at first, but we will examine the components of the definition, and a picture of a supply chain will soon emerge.

Definitions

Resources in this definition can be materials, people, information, money, or any other such resources that must be managed for profitable business operations.

Materials can be raw materials, work-in-progress (WIP), or finished products. In the context of retail industries, it is the merchandise that the retailers sell. It costs to buy this merchandise, store it, and distribute it. If a store is out of merchandise, it loses the sale, thus affecting revenue; if it is overstocked, it increases the inventory, affecting operating cash flow negatively. Some of this merchandise may be seasonal, and therefore must be planned based on seasonal patterns. It may be local (e.g., folding portable chairs with your favorite team’s logo on the back), may depend on weather (e.g., snow boots and jackets), or may need to be custom ordered (e.g., purple carpet). All these factors make the merchandise a resource to be managed. This illustrates the “right-time, right-place, right-quantity” mantra that you may have heard in relation to supply chain management.