Ae - Aesos - Learning Packet - No. 2 - Prelim

Supply Chain Management
(SCM)
OBJECTIVE
 Understand the Supply Chain Management structure and objectives

 To be familiarize with the Supply Chain Management Principle and Methodology
Lesson 1.1.4: The Supply Chain Management Pipeline
 The freight transportation industry has undergone a revolutionary change during the
last decade. As deregulation spread to all modes of transport, the number of
surviving companies declined. Carriers unprotected by regulation discovered they
could not differentiate themselves from the competition on price alone. Successful
transportation companies must provide prompt pickup, excellent customer service,
and swift, complete and damage-free delivery.
 The motor carrier industry forges a critical link in a multimodal Supply Chain
Management system and must compete against time and service to stay in
business. Shippers move cargo over whatever mode provides the best service.
Less-than-truckload (LTL) motor carriers find their competition particularly stiff.
Parcel carriers constantly increase their maximum shipment weight while truck load
carriers now accept partial trailer loads as small as 10,000 pounds. Shorter cycle
times means better service.
 Customers' needs have also changed. The growth of Just-in-Time and Quick Response
inventory management and third-party Supply Chain Management requires all
participants in the Supply Chain Management chain to consider shorter cycle time a
competitive advantage. Manufacturers, distributors, and some carriers effectively use
information technology to reduce cycle times and improve the quality of freight
handling. Package handlers use the technology to great competitive advantage.
 LTL∗ carriers are beginning to adapt their information systems to provide on-line,
realtime data on the movement of freight through their systems. To successfully use
information technology to speed the movement of freight, these carriers must have
lowcost methods to accurately gather and disseminate data. Bar code and radio
frequency technologies provide the tools for LTL carriers to survive and thrive.
 Traditional bar codes uniquely identify every package in the pipeline. Scanning the packages
positively confirms custody transfer from shipper to carrier to consignee. Two-dimensional
bar codes on shipping documents record the entire bill of lading (BOL). Scanners in drivers'
hands provide error-free entry of the BOL in less than a second. Radio communication from
the truck cab to central operations immediately informs dispatchers of incoming freight.
Similar scanning during delivery shortens the billing cycle and provides positive
confirmation of delivery. Information technology speeds cargo through every phase of LTL
operations
 Dock management systems speed cross docking operations. A combination of radio

communication and bar code scanning immediately delivers control information to people
who need it. From dispatchers to fork operators, every member of the dock team receives
immediate information where they work. The system efficiently tracks all packages from
inbound docks through staging to outbound docks. No package waits for information.
 Yard management systems ensure the delivery of the right equipment to the right
location at the right time. Radio communication to yard tractors keeps shuttle
drivers working on the highest priority tasks. Real-time communication between
yard drivers, hub managers, and information support systems provides positive
control of all moving stock. Optimising personnel and rolling stock results in
shortened stripping and loading time at the doors.
Consistent application of appropriate information technology throughout
the Supply Chain Management pipeline results in shortened cycle times and
lowered effort. Immediate, reliable information allows managers to
optimise their physical and human resources. While maximum benefit
comes to those carriers who implement a consistent information strategy
throughout their operations, segmentation of the problem allows carriers
to phase in their transformation. Each phase provides immediate economic
benefits, while improving the strategic position of the carrier.
 Co-ordinating Multiple Initiatives through IT
The Supply Chain Management model of LTL carriers offers the greatest advantage and the fundamental
vulnerability of the mode. City terminals, break bulk consolidation, and other cargo transfer techniques allow
LTL carriers to sell economies of scale to shippers with small cargo consignments. However, the same process
requires multiple handling and offers frequent opportunities for delays, misshipments, and cargo damage.
 Effective use of information technology maximises the advantages and minimises the risks inherent in LTL
transportation. Each package must be positively identified every time it is handled. Information about every
destination must be checked and double checked to maximise cargo speed while minimising empty trailer
miles.
 Implementation of competitive information technologies begins wherever carriers feel they need the most
assistance. For many, dock management represents a logical starting point. Positive tracking of every
package in and out of every hub drastically reduces the possibility of cargo delays and damage. Automatic
optimisation techniques simultaneously reduce handling expenses and allow some trailers to bypass
consolidation hubs entirely.
When carriers augment a dock management system with yard management support, the two projects amplify each
other's advantages. Yard management initiatives closely control the movement of trailers and drivers based on
information provided by the dock management system.
 The dock management system, in turn, profits from data provided by pickup and delivery automation. When
shipment information from city drivers immediately flows to the hubs, support systems and supervisors can
anticipate requirements. Incoming cargo stays in motion because dock managers already know what is on each
inbound truck. If pickup and delivery systems are not immediately automated, carriers can implement
intermediate systems to efficiently feed information to hub management support projects.
 Dockside data collection allows operators to enter all data about an inbound truck's cargo at the dock even as
operators strip the cargo for consolidation.
 Dockside data collection becomes more efficient when carriers encourage their shippers to produce scannable
bills of lading. These documents can be produced on existing printers with specialized software. A two-
dimensional bar code encodes all necessary shipment information. In less than one second, a dockside scanner
captures an entire bill of lading. The same scannable documents can be used when the carrier later implements a
pickup and delivery management system.
Effective supply-chain management may be the best way to achieve reduced order-to-delivery
cycle time. Instead of treating each function as consisting of discrete activities, supply-chain
management considers all functions to be linked and interdependent. As a result, supply-chain
management can reveal the cumulative effect of problems anywhere in the chain, not just within
Supply Chain Management' areas of responsibility.
LESSON 1.2: Objectives of the Supply Chain Management
The fundamental objective is to "add value".
That brings us to the example of the fish fingers. During the Supply Chain Management '98 conference
in the United Kingdom this fall, a participant in a supply chain management seminar said that total time
from fishing dock through manufacturing, distribution, and final sale of frozen fish fingers for his
European grocery-products company was 150 days. Manufacturing took a mere 43 minutes. That
suggests an enormous target for supply chain managers. During all that time, company capital is--
almost literally in this case--frozen. What is true for fish fingers is true of most products. Examine any
extended supply chain, and it is likely to be a long one. James Morehouse, a vice president of consulting
firm A.T. Kearney, reports that the total cycle time for corn flakes, for example, is close to a year and
that the cycle times in the pharmaceutical industry average 465 days. In fact, Morehouse argues that if
the supply chain, of what he calls an "extended enterprise," is encompassing everything from initial
supplier to final customer fulfilment, could be cut to 30 days, that would provide not only more
inventory turns, but fresher product, an ability to customize better, and improved customer
responsiveness. "All that add value," he says. And it provides a clear competitive advantage.
Supply Chain Management becomes a tool to help
accomplish corporate strategic objectives:
 reducing working capital,

 taking assets off the balance sheet,
 accelerating cash-to-cash cycles,
 increasing inventory turns, and so on.
LESSON 1.3: Supply Chain principles/ Methodology and Solutions
If supply-chain management has become top management's new "religion," then it

needs a doctrine. Andersen Consulting has stepped forward to provide the needed
guidance, espousing what it calls the "Seven Principles" of supply-chain
management. When consistently and comprehensively followed, the consulting firm
says, these seven principles bring a host of competitive advantages.
The seven principles as articulated by Andersen Consulting are
as follows:
1. Segment customers based on service needs. Companies traditionally have grouped

customers by industry, product, or trade channel and then provided the same level of service to
everyone within a segment. Effective supply-chain management, by contrast, groups customers
by distinct service needs--regardless of industry--and then tailors services to those particular
segments.
2. Customize the Supply Chain Management network. In designing their Supply Chain
Management network, companies need to focus intensely on the service requirements and
profitability of the customer segments identified. The conventional approach of creating a
"monolithic" Supply Chain Management network runs counter to successful supply-chain
management.
3. Listen to signals of market demand and plan accordingly. Sales and operations planning
must span the entire chain to detect early warning signals of changing demand in ordering
patterns, customer promotions, and so forth. This demand-intensive approach leads to more
consistent forecasts and optimal resource allocation.
4. Differentiate product closer to the customer. Companies today no longer can afford to stockpile
inventory to compensate for possible forecasting errors. Instead, they need to postpone product
differentiation in the manufacturing process closer to actual consuer demand.
5. Strategically manage the sources of supply. By working closely with their key suppliers to reduce
the overall costs of owning materials and services, supply-chain management leaders enhance margins
both for themselves and their suppliers. Beating multiple suppliers over the head for the lowest price is
out, Andersen advises. "Gain sharing" is in.
6. Develop a supply-chain-wide technology strategy. As one of the cornerstones of successful supply-
chain management, information technology must support multiple levels of decision making. It also
should afford a clear view of the flow of products, services, and information.
7. Adopt channel-spanning performance measures. Excellent supply-chain measurement systems do
more than just monitor internal functions. They adopt measures that apply to every link in the supply
chain. Importantly, these measurement systems embrace both service and financial metrics, such as
each account's true profitability.
The principles are not easy to implement, the Andersen consultants say, because they
run counter to ingrained functionally oriented thinking about how companies
organise, operate, and serve customers. The organisations that do persevere and build
a successful supply chain have proved convincingly that you can please customers
and enjoy growth by doing so.

Lesson 1.3.2: Methodology of a Supply Chain Management Project Solution
 The best supply-chain management programs display certain common

characteristics.For one, they focus intensely on actual customer demand. Instead of
forcing into the market product that may or may not sell quickly (and thereby
inviting high warehousing costs), they react to actual customer demand. And by
doing so, these supply-chain leaders minimize the flow of raw materials, finished
product, and packaging materials at every point in the pipeline.
 To respond more accurately to actual customer demand and keep inventory to a

minimum, leading companies have adopted a number of speed-to-market
management techniques. The names by now have become part of the Supply Chain
Management vernacular JIT manufacturing and distribution, quick response (QR),
efficient consumer response (ECR), vendor managed inventory (VMI), and more.
These are the tools that help build a comprehensive supply-chain structure.
A Four Step integrated Approach
In view of the importance of Supply Chain Management to commercial success, making the right
decision about which system is best is vital. Before deciding how to develop new service Supply
Chain Management chains and economical distribution centres, many factors must be considered,
such as, the required customer service levels, optimum location, stock holding policies and EDP
systems. To help organisations make the best decisions, the Miebach Supply Chain Management
Group employs an integrated planning approach, consisting of four steps from planning to
realization:
"The integrated planning process helps to find solutions that best match clients requirements and the
technical demands of the problem", states Dr Joachim Miebach, Chairman of the Miebach Supply Chain
Management Group. "The only way to manage the growing complexity in international Supply Chain
Management chains is through the integration of strategy, engineering and IT systems and methods."
• Potential analysis
• Concept study
• Detailed planning
• Project or change management
The main feature of Miebachs integrated approach is the simultaneous consideration of strategy,
engineering and IT at every step to arrive at an optimum Supply Chain Management solution, the
problem".
CONCLUSION:
 Transportation is the most essential component of a supply chain. It involves the

delivery of products from the start to the end of a supply chain. For a supply chain to be
deemed effective, the transportation segment must be managed efficiently. This involves
making sure the transport and logistics strategy is dynamic and responsive to the
demands of the market.
 Supply chain management has some key & important objectives which are also
applicable for International Logistics and Supply Chain management. The main
objectives of Supply chain management are to reduce cost, improve the overall
organization performance and customer satisfaction by improving product or service
delivery to the consumer.
Activity No. 2

 Provide 10 LTL carriers and briefly discuss each carrier. (PDF File Required)

Ae - Aesos - Learning Packet - No. 2 - Prelim

Uploaded by

Copyright:

Available Formats

Ae - Aesos - Learning Packet - No. 2 - Prelim

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Ae - Aesos - Learning Packet - No. 2 - Prelim

Uploaded by

Copyright:

Available Formats

Supply Chain Management

 Understand the Supply Chain Management structure and objectives

 Dock management systems speed cross docking operations. A combination of radio

The fundamental objective is to "add value".

 reducing working capital,

If supply-chain management has become top management's new "religion," then it

1. Segment customers based on service needs. Companies traditionally have grouped

 The best supply-chain management programs display certain common

 To respond more accurately to actual customer demand and keep inventory to a

 Transportation is the most essential component of a supply chain. It involves the

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.