PC Industry Supply ChainTracing back the sereen you stare at for the bulk of your timeStrategicProduct innovationCustomerrelationsOperationsFocusSofware cempanicsGlobal logisties cumpaniesFinalComponents makersFedEx, UPS, BAX GlobalCustomerstPC eampaniesContractStragemanufacturersDirect (Dell,OEMsGateway)DistributorsResellersLargeAsin (MitacEnteprisesSemkconductorsFIC, Acer...)CompaniesIngramRetilIndirect (IBM)Micro, Techand productCompaq, HP,U.S. (SCI,Data)VARsToshiba, Apple)Solectron...)MotherhoardsflowsIntegratorsConsumersFlat-pmelDealersdisplysLocalCompaneatsassemblersOtherSMEsdistributars(White bos)(Arow,Avnet)ActivitiesR&DManufacturingAssemblyDistributionSales, service, support
1-6 PC Industry Supply Chain Tracing back the screen you stare at for the bulk of your time
Cisco's ValueNetwork2.Orders areautomaticallytransmittedtosuppliersorProvidersscheduledintheCiscoCiscoproductionsystem23.Contractmanufacturers1.Customers80%of7buildandship60%ordersareconfiguredofunitsdirecttoandsubmittedviacustomersCisco's Web siteCustomers64.Ciscoproductionconfigures only highlycomplexorders6.Service70%oftechnicasupportcallsdonotrequire5.ConsolidationcentershumaninterventionCiscooperatesjustthreecentersworldwide1-7
1-7 Cisco’s Value Network
SM DefinitionMaterial FlowARAERetailerSupplieristributoveeConsumersDistributorEnd-UserSupplierValue-AddedServicesFunds/DemandFlowInformation FlowAfterSalesServiceFlowPi1-8
1-8 Source Supplier Supplier Distributor Distributor Retailer End-User Converter Converter Consumers Information Flow Funds/Demand Flow Value-Added Services Material Flow Reuse/Maintenance/After Sales Service Flow SCM Definition
The SCM NetworkWarehousesandManufacturersCustomersSuppliersdistribution centersManufacturing costsTransportation costsMaterial costsTransportationcostsInventory costsFIGURE1.1:Thelogisticsnetwork1-9
1-9 The SCM Network FIGURE 1.1: The logistics network
Key ObservationsEvery facility that impacts costs needs tobeconsideredSuppliers'suppliersCustomers'customersEfficiency and cost-effectiveness throughout thesystem is requiredSystemlevelapproachMultiplelevelsofactivitiesStrategic-Tactical-Operational1-10
1-10 Key Observations ⚫ Every facility that impacts costs needs to be considered ⚫ Suppliers’ suppliers ⚫ Customers’ customers ⚫ Efficiency and cost-effectiveness throughout the system is required ⚫ System level approach ⚫ Multiple levels of activities ⚫ Strategic – Tactical – Operational