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Supply Chain Management For Dummies

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Supply Chain Management For Dummies

Daniel Stanton

ISBN: 978-1-119-41020-1 November 2017 368 Pages

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Description

Everyone can impact the supply chain

Supply Chain Management For Dummies helps you connect the dots between things like purchasing, logistics, and operations to see how the big picture is affected by seemingly isolated inefficiencies. Your business is a system, made of many moving parts that must synchronize to most efficiently meet the needs of your customers—and your shareholders. Interruptions in one area ripple throughout the entire operation, disrupting the careful coordination that makes businesses successful; that's where supply chain management (SCM) comes in. SCM means different things to different people, and many different models exist to meet the needs of different industries. This book focuses on the broadly-applicable Supply Chain Operations Reference (SCOR) Model: Plan, Source, Make, Deliver, Return, and Enable, to describe the basic techniques and key concepts that keep businesses running smoothly.

Whether you're in sales, HR, or product development, the decisions you make every day can impact the supply chain. This book shows you how to factor broader impact into your decision making process based on your place in the system.

  • Improve processes by determining your metrics
  • Choose the right software and implement appropriate automation
  • Evaluate and mitigate risks at all steps in the supply chain
  • Help your business function as a system to more effectively meet customer needs

We tend to think of the supply chain as suppliers, logistics, and warehousing—but it's so much more than that. Every single person in your organization, from the mailroom to the C-suite, can work to enhance or hinder the flow. Supply Chain Management For Dummies shows you what you need to know to make sure your impact leads to positive outcomes.

Introduction 1

About This Book 1

Foolish Assumptions 1

Icons Used in This Book 2

Where to Go from Here 2

Part 1: Getting Started with Supply Chain Management 5

Chapter 1: The Growing Demand for Supply Chain Management 7

Defining Supply Chain Management 7

Exploring Complex Business Challenges 9

Operating Under Supply Chain Management Principles 11

Customer focus 12

Systems thinking 12

Bimodal innovation 12

Collaboration 13

Flexibility 13

Technology 14

Global perspective 14

Risk management 14

Visibility 15

Value creation 15

Introducing Five Supply Chain Tasks 15

Implementing the New Supply Chain Agenda 16

Placing the right people in the right jobs 17

Putting the right technology in place 17

Focusing on internal collaboration 17

Directing external collaboration 18

Applying project management 18

Chapter 2: Understanding Supply Chains from Different Perspectives 19

Managing Supply Chain Flows 19

Synchronizing Supply Chain Functions 20

Purchasing 21

Logistics 22

Operations 23

Connecting Supply Chain Communities 24

Designing Supply Chain Systems 27

Measuring Supply Chain Processes 29

Chapter 3: Digging into Your Supply Chain 31

Prioritizing Supply Chain Goals 31

Step 1: Understand what customers value 32

Step 2: Recognize your competitors 33

Step 3: Understand your products or services 33

Looking at Cost Drivers 35

Procurement costs 35

Transportation costs 36

Inventory costs 36

Quality costs 36

Dealing with Trade-Offs 37

Sales versus operations 38

Customer versus supplier 40

Engineering versus procurement 40

Inventory versus customer service 41

Inventory versus downtime 43

Procurement versus logistics 44

Chapter 4: Optimizing Your Supply Chain 47

Designing Your Network 47

Improving and Innovating Processes 49

Lean 49

Six Sigma 51

Theory of Constraints 53

Structuring Supply Chain Projects 55

Managing Cross-Functional Project Teams 56

Creating Cross-Functional Project Plans 57

Creating a RACI Matrix 59

Designing Project Scorecards 61

Using the DIRECT Model 62

Part 2: Managing Supply Chain Processes 65

Chapter 5: Connecting Supply Chain Processes 67

Understanding Supply Chain Processes 67

Introducing the SCOR Model 68

Establishing Process Metrics 72

Building the Right Supply Chain 73

Chapter 6: Planning the Supply Chain 77

Balancing Supply and Demand 78

Aligning Resources with Requirements 79

Analyzing Your Customers 81

Planning Your Products 82

Planning Your Production Systems 83

Planning Your Delivery Systems 84

Planning for Returns 85

Chapter 7: Sourcing, Purchasing, and Procurement 87

Understanding Strategic Sourcing 88

Segmenting Your Supply Chain 88

Managing Life Cycle Costs 90

Minimizing input costs 91

Sourcing your inputs 92

Forecasting your demand 94

Insourcing, outsourcing, and offshoring 94

Managing Supplier Relationships 95

Establishing Supply Contracts 97

Selecting contract terms 97

Selecting payment terms 98

Mitigating Supplier Risks 100

Establishing Purchasing Ethics 104

Chapter 8: Making Your Products or Services 107

Planning and Scheduling Production 108

Planning production 108

Considering capacity 112

Identifying Manufacturing Process Types 115

Operating a discrete manufacturing process 115

Operating a continuous manufacturing process 117

Choosing Your Production Environment 118

Make-to-stock 119

Make-to-order 119

Engineer-to-order 120

Implementing Quality Control and Quality Assurance 121

Considering the risks of poor quality 122

Controlling quality and variability 122

Reducing Manufacturing Waste 124

Chapter 9: Delivering Your Products or Services 127

Understanding Modes of Transportation 128

Pipeline 129

Ocean 129

Rail 129

Truck 131

Parcel 132

Air 133

Selecting Modes of Transportation 134

Managing Warehousing and Inventory 135

Receiving 137

Put-away 137

Inventory counts 138

Picking 138

Packing 139

Shipping 139

Yard management 140

Over, short, and damaged 141

Establishing Inventory Ordering Policies 141

Selecting Material Handling Equipment 143

Managing and Filling Orders 145

Leveraging Third-Party Logistics 147

Chapter 10: Managing Product Returns and Reverse Supply Chains 149

Growing Revenues with Easy Returns 150

Processing Returns of New or Excess Products 151

Minor wear and tear 151

Damage or tampering 152

Substitution 152

Processing Returns of Used or Defective Products 152

Managing Closed-Loop Supply Chains 153

Handling Unauthorized Returns and Fraudulent Products 154

Managing Trade-Ins 155

Chapter 11: Enabling Your Supply Chain 157

Managing Your Business Rules 157

Managing Supply Chain Performance 158

Setting performance goals 159

Align your metrics with your customers 159

Share Your Metrics with Your Suppliers 160

Managing Your Assets 160

Labeling Your Products 161

Addressing Supply Chain Security Issues 163

Ensuring physical security 163

Dealing with counterfeiting 163

Tackling regulatory compliance 164

Addressing unique product requirements 165

Protecting supply chain information 165

Leveraging Information Technology 166

Leveraging Human Resources 167

Mastering Project Management 169

Part 3: Using Technology to Manage Supply Chains 173

Chapter 12: Managing Supply Chain Software 175

Understanding How Processes Evolve 176

Using Transportation Management Systems 178

Using Warehouse Management and Execution Systems 180

Using Demand Planning Systems 182

Using Material Requirements Planning Systems 183

Using Distribution Requirements Planning Systems 185

Using Labor Management Systems 186

Using Customer Relationship Management Systems 187

Using Supplier Relationship Management Systems 188

Using Enterprise Resources Planning Systems 189

Using Supply Chain Modeling Software 190

Using Business Intelligence Software 192

Leveraging Software Analysts 194

Anticipating the Future of Supply Chain Software 195

Chapter 13: Integrating Advanced Manufacturing into Your Supply Chain 197

Avoiding Obsolescence 198

Capitalizing on Advanced Manufacturing 199

Automated manufacturing 199

Computer-aided design 200

3D printing 200

Automated Mobile Robots 203

Unmanned and Autonomous Vehicles 204

Chapter 14: Managing Digital Supply Chains 207

Digitalizing Products and Services 208

Integrating Planning, Execution, and Visibility 209

Creating Customer Centricity 210

Sharing with Blockchains 211

Harnessing the Internet of Things, Big Data, and the Cloud 212

Employing Artificial Intelligence 214

Retooling for Omnichannel 214

Part 4: Driving Value with Supply Chain Management 217

Chapter 15: Transforming Your Supply Chain 219

Improve Transparency and Visibility 219

Deploying Demand Shaping 220

Performing Postponement 221

Renewing Regional Sourcing 222

Reducing Stock-Keeping Units 223

Optimizing Inventory 224

Incorporating Vendor-Managed Inventory 226

Adjusting Payment Terms 227

Using Supply Chain Finance 228

Control the Bullwhip Effect 229

Share information with your partners 229

Reduce and align lot sizes 230

Manage promotions 230

Starting with Small Improvements 231

Creating Sandboxes 231

Chapter 16: Adopting Supply Chain Metrics 233

Understanding Metrics 233

Identifying Performance Attributes 235

Understanding SCOR Metrics 236

Reliability 236

Responsiveness 237

Agility 237

Cost 238

Asset management efficiency 238

Optimizing Operational Metrics 238

Supplier metrics 239

Procure to pay metrics 239

Customer service metrics 239

Capacity, throughput, and yield metrics 240

Formalizing Financial Metrics 241

Accounts payable metrics 241

Total spend metrics 241

Savings metrics 242

Perfecting People Metrics 242

Engagement metrics 242

Productivity and efficiency metrics 243

Turnover metrics 243

Safety metrics 244

Solidifying Sustainability Metrics 245

Consumption metrics 245

Waste metrics 246

Chapter 17: Managing Supply Chain Risks 247

Challenging Assumptions About the Future 247

Building Supply Chain Resilience 249

Identifying Risks 250

Classifying Risks 252

Scoring Risks 253

Managing Risks 255

Accept the risk 255

Transfer the risk 256

Avoid the risk 256

Mitigate the risk 256

Chapter 18: Building Supply Chain Analytics 259

The Rise of Big Data, Sensors, and the Internet of Things 260

Outline of an Analytics Plan 261

Define your theory about the problem or opportunity 262

Acquire the data 263

Clean, structure, and filter the data 263

Query the data and test your theory 264

Look for correlations and patterns 264

Correlation, Causation, and Interpolation 265

Modeling, Simulation, and Optimization 268

Simulation 269

Optimization 269

Scenario Planning 270

Dashboards and Control Towers 272

Part 5: Building Your Supply Chain Management Career 275

Chapter 19: Selecting a Supply Chain Career 277

Doing Your Homework 277

Examining Supply Chain Career Categories 278

Associates 281

Technicians 283

Planners and Analysts 284

Engineers 286

Supervisors 287

Managers 288

Sales Representatives 290

Information Technology Managers 290

Project Managers 292

Journalists 292

Executives 292

Educators 293

Humanitarian Supply Chain Professionals 294

Chapter 20: Pursuing Supply Chain Education 295

Earning Certificates and Certifications 295

APICS 296

Project Management Institute 299

Council of Supply Chain Management Professsionals 300

Institute for Supply Management 301

International certifications 302

Earning Degrees and Diplomas 303

Undergraduate degrees 304

Graduate degrees 304

Exploring Online Education Options 304

Traditional online programs 305

MITx MicroMasters in Supply Chain Management 305

Coursera 305

LinkedIn Learning 306

YouTube 306

Playing Supply Chain Games 306

The Beer Game 307

The Fresh Connection 307

Part 6: The Part of Tens 309

Chapter 21: Ten Questions to Ask About Your Supply Chain 311

Who Are Your Key Customers? 311

What Do Your Key Customers Value? 312

How Could Your Supply Chain Create More Value? 312

How Do You Define Supply Chain Management? 313

What Information Do You Share with Suppliers? 313

How Do You Compare with Competitors? 314

What Changes Could Increase Revenue? 315

What Changes Could Lower Costs? 315

What Affects Your Supply Chain Now? 316

What Will Affect Your Supply Chain in the Future? 317

Index 319