Supply Chain Series Posts

Supply Chain

Supply chain is a field with global impacts as services and products span across international borders. There are no businesses that are without a direct supply chain impact. Everyone and everything requires materials, equipment, and labor that are used to transform raw materials and information into finished goods and services.  Supply chain involves logistics, distribution, procurement, contracts,  information technology, and a host of other disciplines that come together to form the supply chain. 

There are many variations of supply chains from 'dyadic' networks to complex multi-firm groupings in a mesh network. Other variations focus on the kind of supply chain such as manufacturing, service, construction, or mega-projects. There are even physical and virtual supply chains. 

Overall, supply chains involve flows and are viewed in terms of processes such as:

• Gathering and processing marketing data
• Distribution and payment of invoices
• Processing and shipping of materials
• Scheduling 
• Fulfillment of orders
• Mapping information systems to business processes

Stakeholders are not only inside the supply chain but others outside the supply chain can affect outcomes significantly such as governments, regulatory agencies, tax agencies, as well as the availability of infrastructures; logistical or informational.  The general public influences the supply chains as amongst them is knowledge, political concerns, competitors, joint ventures, and trade associations.

While I possess the PMP certification, the CSCP is more difficult to achieve requiring an 80% passing score as opposed to the 70% required for the PMP. The CSCP is also touted by the APICS association to yield more professional positions at higher pay rates.  The CSCP also has the same core competencies as the PMP, of the more expansive Operations Management undergraduate degree I possess.  I hope to pull some of my old college papers and post them as part of this series. At the time I was going through college my program computer integrated manufacturing, CIM, was emerging and many of the papers I wrote centered on artificial intelligence and horizontal integration of all the manufacturing elements including the supply chain.

I have begun to list the posts here. Please feel free to read through them:

Supplemental Posts:

A. Supply Chain: Adapting Process to Create Customer Value

B. Supply Chain Holiday Bedlam

C. Reshaping the Travel Industries Global Distribution System

D. Project Complexity Perplexes Procurements

E. Supply Chain: Managing Butterflies, Not Bullwhip

Core Posts:

01. Supply Chain Overview

02. Manufacturing Supply Chain Model

03. Service Oriented Supply Chain Model 

04. Key Management Processes

05. Evolution of Supply Chain Management

06. Creating Value through Supply Chain Management

07. Globalization Impact on Supply Chain Management

08. Supply Chain Strategy

09. Building Supply Chain Collaboration

10. Aligning Supply Chain and Corporate Strategies

11. Change, Futures, and Supply Chain Strategy

12. Risk Management in Supply Chain

13. Supply Chain Metrics

14. Financial Performance

15. Leadership and Managing People

16. Security

17. Compliance

18. Continuous Improvement

19. Visibility

20. Analysis

21. Benchmarking and Goals

22. Continuous Improvement Part 1 - Six Sigma

23. Continuous Improvement Part 2 - Lean and JIT

24. Continuous Improvement Part 3 - Theory of Constraints

25. Implementation and Change Management

This wraps up the series on Supply Chain Basics. I may return to add additional support from time-to-time and will add a post on the CSCP exam. Please feel free to comment on the post by either emailing me, james.bogden@gmail.com, or by commenting directly on the posts. Thanks!

Reference:

(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.

Supply Chain: Service Model

This is a series on Supply Chain Basics looking at the discipline from the Society of Operations Management perspective. Supply chain is also essential to project management as PMs are typically trained in world class contracting. The Defense Acquisition Workforce Improvement Act, DAWIA, certification highlights the combination of project management and supply chain. In this post, we will explore Supply Chain Service Model adding some additional support as well.

Supply Chain:  Service Model

The traditional supply chain model was developed in support of manufacturing of finished goods.     The APICS dictionary defines the service industry in the most narrowest sense an organization that provides an intangible product. As we move from an industrialize economy more into a service economy, there is a need for a service industry supply chain model, Figure 1.

Figure 1:  Supply Chain Service Model

Service oriented supply chains require sophisticate management and can become complex too. For example, electrical power service providers purchase fuel sources (coal, oil, natural gas, radiological) via a wholesaler then convert the energy into electric power for transmission to the consumer.  The electrical power providers also purchase finished goods in terms of equipment and materials as well as the services to maintain the equipment.  A datacenter is similar as they provide computational power, long term data storage, and virtualization services. They must purchase equipment and supplies as finished goods from a materiel supplier as well as maintenance and production services from a host of service providers.  Healthcare is another service industry that has complex supply chain concerns.

Similar to the other models, the service supply chain model also has cash, service, and information flows. Unique to the service industry, warranty and returns are handled differently. In the service industry perception is a greater actor in quality than any measures due to the intangibility of the service.

In the service industry, many influences burden the supply chain. For example, labor contracts, regulations, the profit models operating, and competition all weigh on the supply chain and perhaps more on the service industry than others due to the intangibility and perceptive nature of the service.

Reference:

(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.

Supply Chain: Manufacturing Model

This is a series on Supply Chain Basics looking at the discipline from the Society of Operations Management perspective. Supply chain is also essential to project management as PMs are typically trained in world class contracting. The Defense Acquisition Workforce Improvement Act, DAWIA, certification highlights the combination of project management and supply chain. In this post, we will explore Supply Chain and Corporate Strategy adding some additional support as well.

Supply Chain: Manufacturing Model

Supply complexity is a challenge across project types. Mega-projects are generally engineered-to-order projects that involve large numbers of suppliers supporting construction of a highway, bridge, building a rocket, ship, or even developing a computer system such as Digital Fortress having millions of processors. Another type of supply chain complexity involves manufacturing a complex finished good such as a automobile which typically has over 30,000 parts and sub-assemblies resulting in 10's of 1000's of suppliers. 

In manufacturing, a supply chain common practice is to have multiple tiers of suppliers adding increased complexity and quality challenges, Figure 1. 

Figure 1: Manufacturing Supply Chain Model

In this model, suppliers typically have suppliers. The model can become more complex adding Tiers 3 and 4 or more to the model. In the Skunk Works project (Formally called Advanced Development Projects) run by Lockheed Martin, the classified projects had tiers of subcomponent assemblies built and shipped off to the next Tier where they where consolidated into the next higher level assembly which was sent off to another Tier for further consolidation into the next higher level assembly. Eventually, subassemblies that were not discernible as to the whole assembly arrived at a final assemble location where they were assembled then delivered. The end product in this case, were aircraft such as the U-2, SR-71, F-117, F-22, and F-35.  There were over 100,000 suppliers of goods and services that had no knowledge of the scale of the project or the highly classified nature of the project that they were participating within. 

A distributor in this model, does not create the end product but instead purchases or has some sort of agreement to resell the products.  Not shown are wholesalers which are a kind of distributor usually of commoditized goods. 

Overall,  the model can become quite complex falling into a Systems of Systems paradigm and eventually map out an entire economy or at least a major segment of the economy.  Hence, supply chains can become very important in managing costs and revenues as well as the legal and contractual relationships among all the actors.  There is one more model to consider and that is the Service Supply Chain in the next post.

Reference:

(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.

Supply Chain: Overview

Project Management in the purest form involves contracts and supply chain as resources and the business are tightly tied to contractual agreements. This is a series on supply chain basics looking at the discipline from the Society of Operations Management perspective.

Supply Chain: Overview

A supply supply chain is a global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.  The supply chain does not have to be global but many are global. The base supply chain model involves the flow of goods, information, and money between elemental actors from the supplier to the consumer. Logistical and information networks service the flows; Figure 1, which applies mostly to corporations rather than governmental or military supply chains. The US Navy's supply chain system is modeled after Caterpillar's supply system.

Figure 1:  Basic Supply Chain Model

The supply chain concept applies to both goods and services.  The 'upstream' flow travels from the Consumer towards the Supplier and the 'downstream' flow is from the Supplier towards the Consumer.  

Suppliers are a provider of goods and services or a seller with whom a buyer does business.  A vendor is an all inclusive generic term referring to all sellers in the marketplace.  The supplier provides goods such as sub-components and raw materials as well as services such as transportation, professional services, etc...

Producers receive goods and services from the supplier then creates finished goods and services for consumption by the Consumer. Service supply chains tend to be more abstract then the supply chain for goods.  

Consumers are those who receive the shipments of finished goods or purchase the services. 

Flows connect the supply chain entities together.

Primary Product Flows travel from the supplier to the consumer. Logistical networks move the goods through the producer.  In manufacturing, Just In Time (JIT) the goods are in constant motion with supply buffers that absorb variability.   

Primary Cash Flows travel from the consumer upstream to the supplier.

Information Flows both upstream and downstream as well as internally and externally.      

Reverse Product Flows travel upstream towards the supplier as the reverse supply chain.  This occurs for several reasons such as warranty, repairs, recycling, buybacks, disposals, etc...  Logistical services transport the goods through the reverse supply chain. 

The importance of supply in business is growing as economies regionalize and globalization increases. For example, the North American Free Trade Agreement (NAFTA) is increasing the freedom of movement throughout the region as the NAFTA superhighway completes construction. Logistical pipelines are lengthening in most cases. Although, Ford Motor Company's Bahi, Brazil enterprise has convergent production lines feeding the main production line.  Supply partnerships operate these convergent lines and synchronize the supply chains in the flexible manufacturing environment. 

Reference:

(2011). APICS Certified Supply Chain Professional Learning System. (2011 ed.). Version 2.2.