Chapter 10: CoordinatedProduct and SupplyChain Design11-1
11-1 Chapter 10: Coordinated Product and Supply Chain Design
11.1 A General FrameworkTwo distinct chains in organizations:The supply chain which focuses on the flowofphysical productsfromsuppliers throughmanufacturing and distribution all the way toretail outlets andcustomers,andThe development chainwhich focuses onnewproduct introduction and involves productarchitecture,make/buydecisions,earliersupplier involvement,strategic partneringsupplierfootprint andsupplycontracts11-2
11-2 11.1 A General Framework ⚫ Two distinct chains in organizations: ⚫ The supply chain which focuses on the flow of physical products from suppliers through manufacturing and distribution all the way to retail outlets and customers, and ⚫ The development chain which focuses on new product introduction and involves product architecture, make/buy decisions, earlier supplier involvement, strategic partnering, supplier footprint and supply contracts
Key Characteristics of Supply Chain·Demand uncertaintyandvariability,inparticular,thebullwhip effectEconomiesofscaleinproductionandtransportationLeadtime,inparticularduetoglobalization11-3
11-3 Key Characteristics of Supply Chain ⚫ Demand uncertainty and variability, in particular, the bullwhip effect ⚫ Economies of scale in production and transportation ⚫ Lead time, in particular due to globalization
Key Characteristics oft ChainDevelopmentTechnology clock speedSpeed by whichtechnology changes ina particular福industryMake/BuydecisionsDecisions on what to make internally and what to buyfrom outside suppliersProductstructureLevel of modularity orintegrality inaproductModular productassembledfromavarietyofmoduleseachmodulemayhave several optionsBulkof manufacturingcanbecompleted beforetheselection of modules and assemblyintothe finalproduct takes place11-4
11-4 ⚫ Technology clock speed ⚫ Speed by which technology changes in a particular industry ⚫ Make/Buy decisions ⚫ Decisions on what to make internally and what to buy from outside suppliers ⚫ Product structure ⚫ Level of modularity or integrality in a product ⚫ Modular product ⚫ assembled from a variety of modules ⚫ each module may have several options ⚫ Bulk of manufacturing can be completed before the selection of modules and assembly into the final product takes place Key Characteristics of Development Chain
InteractionbetweentheTwoChainsFisher'sconceptof InnovativeandFunctionalProductsFunctionalproducts characterized by:·slowtechnologyclock speed,lowproductvariety,and typically low profit marginsInnovative products characterized byfasttechnology clock speed and shortproduct lifecycle,highproduct variety,and relativelyhighmargins.11-5
11-5 Interaction between the Two Chains ⚫ Fisher’s concept of Innovative and Functional Products ⚫ Functional products characterized by: ⚫ slow technology clock speed, low product variety, and typically low profit margins ⚫ Innovative products characterized by: ⚫ fast technology clock speed and short product life cycle, high product variety, and relatively high margins