Stages of a Detergent Supply Chain Timber Paper Pactiv Company Manufacturer Corporation P&G or Other Wal-Mart or Third Wal-Mart Customer Manufacturer Party DC Store Chemical Plastic Manufacturer Producer SEIEE AU406 Supply Chain Management 11
Stages of a Detergent Supply Chain SEIEE AU406 Supply Chain Management 11
Flows in a supply chain Supplier Manufacturer Distributor Retailer Customer Supplier Manufacturer Distributor Retailer Customer Supplier Manufacturer Distributor Retailer Customer >Actually,most supply chains are networks.It may be more accurate to use the term“supply network”or“supply web' >All stages may not be present,depending on both customer's needs and roles played by the stages involved (e.g.,Dell) SEIEE AU406 Supply Chain Management 12
Flows in a supply chain SEIEE AU406 Supply Chain Management 12 Actually, most supply chains are networks. It may be more accurate to use the term “supply network” or “supply web” All stages may not be present, depending on both customer`s needs and roles played by the stages involved (e.g., Dell)
Dell's example Two different supply chains ---Direct sales model:for corporate clients and some individuals that want a customized personal computer, Dell builds to order(no retailer,distributor,or wholesaler) ---Since 2007,Dell sells its PCs through Wal-Mart in US and the GOME Group,China's electronics retailer(the retailer involved). SEIEE AU406 Supply Chain Management 13
Dell`s example Two different supply chains ---Direct sales model: for corporate clients and some individuals that want a customized personal computer, Dell builds to order (no retailer, distributor, or wholesaler) ---Since 2007, Dell sells its PCs through Wal-Mart in US and the GOME Group, China`s electronics retailer (the retailer involved). SEIEE AU406 Supply Chain Management 13
1.2 Objective of a supply chain Maximize overall value created 。Supply Chain Surplus Customer Value-Supply Chain Cost > Customer the only source of revenue >Sources of cost include flows of information,products,or funds between stages of the supply chain > Effective supply chain management is the management of flows between and among supply chain stages to maximize total supply chain surplus ---Satisfy customer service requirements ---Minimize supply chain cost SEIEE AU406 Supply Chain Management 14
1.2 Objective of a supply chain Maximize overall value created Supply Chain Surplus = Customer Value – Supply Chain Cost Customer the only source of revenue Sources of cost include flows of information, products, or funds between stages of the supply chain Effective supply chain management is the management of flows between and among supply chain stages to maximize total supply chain surplus --- Satisfy customer service requirements --- Minimize supply chain cost SEIEE AU406 Supply Chain Management 14
Objective of a supply chain Example:a customer purchases a wireless router from Best Buy for $60(revenue) Supply chain incurs costs (information,storage, transportation,components,assembly,etc.) Difference between $60 and the sum of all of these costs is the supply chain profit o Supply chain profitability is total profit to be shared across all stages of the supply chain Success should be measured by total supply chain profitability,not profits at an individual stage SEIEE AU406 Supply Chain Management 15
Objective of a supply chain Example: a customer purchases a wireless router from Best Buy for $60 (revenue) Supply chain incurs costs (information, storage, transportation, components, assembly, etc.) Difference between $60 and the sum of all of these costs is the supply chain profit Supply chain profitability is total profit to be shared across all stages of the supply chain Success should be measured by total supply chain profitability, not profits at an individual stage SEIEE AU406 Supply Chain Management 15