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Strategic Materials & Supply Chain Management

This document discusses strategic supply chain management and network design. It describes push and pull supply chains, and how companies now use hybrid push-pull models. Highly differentiated products are best suited for pull supply chains, which produce based on actual customer demand rather than forecasts. The document outlines factors that influence network design decisions, including strategy, technology, costs and demand. It presents a framework for network design involving defining strategy, configuring regions and facilities, selecting sites, and final location choices.

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Mona Singh
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© Attribution Non-Commercial (BY-NC)
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Download as PPT, PDF, TXT or read online on Scribd
36 views

Strategic Materials & Supply Chain Management

This document discusses strategic supply chain management and network design. It describes push and pull supply chains, and how companies now use hybrid push-pull models. Highly differentiated products are best suited for pull supply chains, which produce based on actual customer demand rather than forecasts. The document outlines factors that influence network design decisions, including strategy, technology, costs and demand. It presents a framework for network design involving defining strategy, configuring regions and facilities, selecting sites, and final location choices.

Uploaded by

Mona Singh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Strategic Materials &

Supply Chain Management


Submitted to:
Prof. Vidhyasagar Gulati
Submitted by:
Mona Singh, Neha Ghadge, Nidhi Parikh, Nitin
Malviya, Neeti Vatsa, Neha Khatri, Nikhil
Agrawal, Nimish Shukla, Niyati Chhabra.
Question

What type of network are best suited


to highly differentiated products?
Supply Chain Management

According to Lambertc :-
“Supply Chain Management is the integration of key
business processes across the supply chain for the purpose
of creating value for customers and stakeholders”
Supply Chain techniques have played a vital role in
creating a competitive force for the marketability of
products by expanding a competitive force for the
marketability of products by expanding the production
base and market share.
The various forms of supply chain –
Push Supply Chains

Push oriented supply chain caters to stable demand of


homogenized products. In this type of supply chain,
production and distribution decision are based on long
term forecast as demand is stable. Push supply chain was
characteristic of apparel organization structures and
optimized activities focused on functions as companies
were manufacturing oriented in a demand surplus
environment of mass-product.
Pull Supply chains
 With the emergence of more volatile market-demand and
powerful retailers like Wal-Mart, K-Mart, apparel
originations unable to supply competitively small order that
piling up at every stage of supply chain. This accumulation
of inventory is further aggravated due to bullwhip effect.
 To survive in competitive scenario, organizations fine tune
their productions and distribution as per actual demand
given by customer in a pull oriented supply chain this
enable reduction of unnecessary buffer stock, improvement
in service level to supply what consumer wants not what
company makes.
Push-Pull Supply Chains
 Staring from 90s, apparel corporation all over the world
have experienced increasing national and international
competition and have initiated horizontal alignment with
leaner structure to better address has taken place in the
marketplace from mass products to customized products.
In distribution channel, giant retailers like Wal Mart, K-
Mart, exercise even more power to the supply chain.
Role of Network Design in Supply Chain

Supply chain network design decision include the


assignment of facility role, location of manufacturing
storage or transportation related facilities and the
allocation of capacity and markets to each facility. Supply
chain network design decisions are classified as follows:-
 Facility role :- what role should each facility play? What
processes are performed at each facility ?
 Facility location :-where should facility be located?
 Capacity allocation :- how much capacity should be
allocated to each facility?
Role of Network Design in Supply Chain
 Market and supply allocation:- what market should each
facility serve? Which supply source should feed each
facility?
Network design decisions have a significant impact on
performance because they determine the supply chain
configuration and set constrains within which the other
supply chain cost or to increase responsive.
Factors Influencing Network Design
Decisions

There are wide variety of factors inflorescence network design


decisions in supply chains the are as follows :-
 Strategic Factors
a) Offshore facility
b) Source facility
c) Server facility
d) Contributor facility
e) Outpost facility
f) Lead facility
 Technological factors
Factors Influencing Network Design
Decisions

Macro Economic factors


a) Tariffs and Tax incentives
b) Exchange rate and demand risk
 Political factors
 Infrastructure factors
 Competitive Factors
 Socio economic factors
 Customer response time and local presence
 Logistics and facility costs
Frame Work of network Design
Decisions
The goal behind designing a supply chain network is to
maximize the firm’s profits while satisfying customer
needs in terms of demand and responsiveness.

The decisions are made in four phases :-


 Defining a supply chain strategy or design
 Define the regional facility configuration
 Select a set of desirable potential sites
 Location choices
Frame Work of network Design
Decisions
Defining a supply chain strategy or design

Define the regional facility configuration

Select a set of desirable potential sites

Location choices
Defining a supply chain strategy or
design
 The first stage of network design is to define a firm’s
broad supply chain design and it starts with a clear
definition of the firm’s competitive strategy as the set of
customer need that the supply chain aims to satisfy. The
strategy that specifies what capabilities the supply chain
aims to satisfy. The strategy then specifies what
capabilities the supply chain aims to network forecast the
likely evolution of global competition and whether
competitors in each market will be local or global players.
Define the regional facility configuration
The second phase is to identity regions where facilities will be
located, their potential roles and their approximate capacity .
This phase starts with a forecast of the demand by country such
a forecast must include a measure the customer requirement
are homogenous or variable across different countries.
The next step is, for managers, to identify whether economies of
scale or scope can play a significant role in reducing costs.
Next managers must also identify their competitors in each
region and make a case for whether a facility need to do
located close to or far from a competitor's facility.
Select a set of desirable potential sites
Select the set of desirable potential sites within each region
where facility are to be located. Sites should be selected
based on an analysis of infrastructure availability to
support the desired production methodologies.
 Hard infrastructure requirements include the availability of
suppliers , transportation services, communication, utilities
and warehousing infrastructure.
 Soft infrastructure requirements include the availability of
skilled workforce, workforce turnover and the community
receptivity to business and industry.
Location choices
 The last phase is to select a precise location and capacity
allocation for each facility. Attention is restricted to the
desirable potential sites selected in the third phase. The
network is designed to maximize total profit taking into
account the expected margin and demand in each market,
various logistics and facility cost and the taxes and tariffs
at each location.

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