Supply Chain Management (3rd Edition) Ch1 Summary
Traditional View: Logistics in the Economy (1990, 1996)
Supply Chain Management (3rd Edition)
Chapter 1 Understanding the Supply Chain
Freight Transportation Inventory Expense Administrative Expense Logistics Related Activity
$352, $455 Billion $221, $311 Billion $27, $31 Billion 11%, 10.5% of GNP
Source: Cass Logistics
© 2007 Pearson Education
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© 2007 Pearson Education
1-2
Traditional View: Logistics in the Manufacturing Firm
Profit Logistics Cost Marketing Cost Manufacturing Cost 4% 21% 27% 48%
Manufacturing Cost Profit Logistics Cost Marketing Cost
Supply Chain Management: The Magnitude in the Traditional View
Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies
– A typical box of cereal spends 104 days from factory to sale – A typical car spends 15 days from factory to dealership
Laura Ashley turns its inventory 10 times a year, five times faster than 3 years ago
© 2007 Pearson Education
1-3
© 2007 Pearson Education
1-4
Supply Chain Management: The True Magnitude
Compaq estimates it lost $.5 billion to $1 billion in sales in 1995 because laptops were not available when and where needed When the 1 gig processor was introduced by AMD, the price of the 800 mb processor dropped by 30% P&G estimates it saved retail customers $65 million by collaboration resulting in a better match of supply and demand
Outline
What is a Supply Chain? Decision Phases in a Supply Chain Process View of a Supply Chain The Importance of Supply Chain Flows Examples of Supply Chains
© 2007 Pearson Education
1-5
© 2007 Pearson Education
1-6
What is a Supply Chain?
Introduction The objective of a supply chain
What is a Supply Chain?
All stages involved, directly or indirectly, in fulfilling a customer request Includes manufacturers, suppliers, transporters, warehouses, retailers, and customers Within each company, the supply
Supply Chain Management (3rd Edition)
Chapter 1 Understanding the Supply Chain
Freight Transportation Inventory Expense Administrative Expense Logistics Related Activity
$352, $455 Billion $221, $311 Billion $27, $31 Billion 11%, 10.5% of GNP
Source: Cass Logistics
© 2007 Pearson Education
1-1
© 2007 Pearson Education
1-2
Traditional View: Logistics in the Manufacturing Firm
Profit Logistics Cost Marketing Cost Manufacturing Cost 4% 21% 27% 48%
Manufacturing Cost Profit Logistics Cost Marketing Cost
Supply Chain Management: The Magnitude in the Traditional View
Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies
– A typical box of cereal spends 104 days from factory to sale – A typical car spends 15 days from factory to dealership
Laura Ashley turns its inventory 10 times a year, five times faster than 3 years ago
© 2007 Pearson Education
1-3
© 2007 Pearson Education
1-4
Supply Chain Management: The True Magnitude
Compaq estimates it lost $.5 billion to $1 billion in sales in 1995 because laptops were not available when and where needed When the 1 gig processor was introduced by AMD, the price of the 800 mb processor dropped by 30% P&G estimates it saved retail customers $65 million by collaboration resulting in a better match of supply and demand
Outline
What is a Supply Chain? Decision Phases in a Supply Chain Process View of a Supply Chain The Importance of Supply Chain Flows Examples of Supply Chains
© 2007 Pearson Education
1-5
© 2007 Pearson Education
1-6
What is a Supply Chain?
Introduction The objective of a supply chain
What is a Supply Chain?
All stages involved, directly or indirectly, in fulfilling a customer request Includes manufacturers, suppliers, transporters, warehouses, retailers, and customers Within each company, the supply