Examples of Supply Chains

In this section, we consider several supply chains and raise questions that must be answered during their design, planning, and operation phases. In later chapters, we discuss concepts and present methodologies that can be used to answer these questions. 

Gateway and Apple Two Different Journeys into Retailing 

In contrast, Apple has enjoyed tremendous success since it opened its first retail store in 2001. By 2013, Apple had more than 415 stores worldwide, with sales of over 20 bilhon. Unlike 

Gateway, Apple has always carried product inventory at its stores. Given its product designs, Apple carries relatively little variety in its stores. In 2012, average revenue per Apple retail store was 51.5 million, a 19 percent increase over 2011. 

The following questions highlight supply chain decisions that have a bearing on the difference between Apple s and Gateway s performance  

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This chapter focused on examples of supply chains and their underl dng supply chain architecture, using a Four C conceptual framework. The Four Cs refer to chain structure and ownership, capacity, coordination, and competitiveness. The supply chain audit permits an understanding of current choices and an approach to evaluate alternate choices for supply chain architecture. The goal of this chapter was to explain the Four C choices made in different successful supply chain contexts. 

Table 5.4 applies the model to a few examples of supply chain projects. Just because a project extends beyond the immediate company, it need not be strategic. It could be catch up to reach parity with a more aggressive competitor or of little relevance to competitive position. So, venturing outside the company to do a supply chain project alone is not a prerequisite for a strategic project. 

Give two examples of supply chain enablers. How do they differ from supply chain drivers ... 

Agility. New business opportunities can be captured by engaging in relationships with innovative supply chain partners. Utilization of various Internet-based distribution options is a prominent example of supply chain redesign to find new business opportunities. 

The remaining 19 chapters in the Handbook all provide different examples of supply chain risks including those Usted above and others more specific to different supply chain contexts (e.g. risks associated with the transportation of dangerous goods). The authors also outhne the nature of the impact these risks have on the focal organization and others in the supply chain. In each case the chapters conclude with potential solutions, presented and evaluated as part of the SCRM process. 

Automation users would like to apply the CII for automating functions that are crucial for them and for society (this is intrinsic to the definition of critical infrastructure ). The functions can be related for example to supply chains, production or financial operations. The positive side is given by the possibility to conduct fast and efficient reactions to unwanted conditions (e.g., unsafe states, security breaches). However this exposes those critical functions to the vulnerabilities and uncertainties of the CII - which can neither ensure the availability of the connection, nor the secure treatment of the data. 

There are many other examples of assembly postponement. The salad bar at a restaurant is a classic example of making the customer assemble their desired salad on demand. Hardware stores claim to carry over 30,000 colors of paint. But in most cases they carry only a small number of primary colors and additives and create the color on demand with the aid of software. Such assembly postponement permits lowering of supply chain costs while maintaining customer choice. 

In many industries, the provision of spare parts and associated services represents a significant component of supply chain profits. Some studies [23] estimate US sales of spare parts and after-sales services to be 8% of the annual gross domestic product (GDP) or 1 trillion. Others [28] surest, for example, that in 2001, General Motors earned relatively more profits from its 9 billion in after-sales revenues than it did from 150 billion in car sales. Another estimate [124] suggests that the total cost of ownership of a product may far exceed the amount spent on the initial product purchase and may vary between five and twenty times the original product cost. The main conclusion from these studies is that managing spare parts supply chains and related services after a product is sold may have a significant impact on both primary demand as well as on profits. 

When asked, "How many supply chains does the team have " often the supply chain group knows the answer intuitively. They look beyond items or assets. They think in terms of supply chain drivers and variability. It is a discussion of rhythms and cycles. The challenge is to have the entire organization think holistically and be inclusive of all supply chains when developing a design. Some examples are ... 

Linear programming became the basis for mixed-integer linear programming (MILP) which nowadays involves several branches of chemical engineering (Biegler and Grossmann, 2004). One example is supply chain management process control... 

For example, in the consumer goods industries the retail store is often the controlling member of the supply chain. In today s retail industry, the retail store must have the right product on the shelf at the right time. Many of these products are household brands which consumers expect to find in almost any retail store they visit. The factories supplying these products are then members of supply chains for competing retail stores. This increases the volume for the factory, but the factory may have to coordinate with the distribution systems of the different retail chains in different ways to meet the different requirements of these various retail stores. 

The resource planning conducted by a firm is influenced by the type of supply chain that the firm is involved with and the firm s own business strategy. For example, if a firm is a member of a supply chain where the number of suppliers of its products is being reduced and the firm was selected as one of the partners to receive more volume, the firm would have an incentive to invest in more capacity. If, on the other hand, the firm is one of many generic suppliers of a product in a supply chain where the customer treats all competitors products as commodities, the firm would have an incentive to compete on the basis of price. This would cause the firm to resist investment in capacity with a long pay back period and instead to focus on reducing other costs. 

This scenario occurs in the real world every day. In an effort to avoid poor customer service, elements of supply chains do exactly the same thing. Ironically, the result of these actions is even worse customer service. The actual fluctuation in monthly demand in the automotive industry, for example, is less than 10%. However, second and third tier suppliers are constantly adjusting capacities by as much as 50%. In the textile and apparel industries, the effect of seasonal fluctuations only compounds the same problems. 

In order to meet the real-time transfer of the signal, stringent service quality parameters are defined over the data transfers down the supply chain. This chapter provides techniques to meet these requirements with minimal resources. Intime flow of the commodities to the end user is the basic requirement in a supply chain. The tools and techniques used to meet this goal are different in different supply chains. The example of realtime transfer of information for the end user is eonsidered throughout this ehapter. The supply ehain involves various routers, switehes, and media in between. The goal is to getthe real-time performanee in the ehain with minimal retransmissions. The concepts may be easily extended to any other form of supply chain. 

The supply chain should support the satisfaction of end-user requirements. These requirements give rise to the fundamental mission of supply chains — matching supply and demand. The customer may not be the end-user, but a representative. An example is the parent buying a toy for the child. 

Chapter 2 described examples of buzz about supply chains. Buzz is behind the scenes conversation regarding a trend. Concepts in this chapter, many of which were introduced in Supply Chain Project Management j describe six drivers, often hidden from view, fueling the need for change in the supply chain. The drivers mirror environmental trends — economic, technological, competitive, political, and social. We also describe a framework for defining supply chain requirements for flexibility. We view flexibility requirements as the cornerstone of supply chain design. 

The primary measure for supply chain managers is cost. A common example is supply chain cost per dollar of sales. ... 

Flexibility specifications are imperative because they drive the design of supply chain processes and shape collaboration with supply chain partners. Static specifications are not acceptable the Upton method makes possible definition of ranges of operations and expectations for customer service. Also, many CEOs seek some kind of visual cockpit for their operations. One based on defined flexibility parameters such as those in the example is an excellent start. 

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