SUPPLY CHAIN MANAGEMENT IN CHINA

12 mars 2007

E-procurement

E-procurement is the business-to-business purchase and sale of supplies and services over the Internet. An important part of many B2B sites, e-procurement is also sometimes referred to by other terms, such as supplier exchange. Typically, e-procurement Web sites allow qualified and registered users to look for buyers or sellers of goods and services. Depending on the approach, buyers or sellers may specify prices or invite bids. Transactions can be initiated and completed. Ongoing purchases may qualify customers for volume discounts or special offers. E-procurement software may make it possible to automate some buying and selling. Companies participating expect to be able to control parts inventories more effectively, reduce purchasing agent overhead, and improve manufacturing cycles. E-procurement is expected to be integrated with the trend toward computerized supply chain management

Source : Wikipedia

10 mars 2007

Serial Shipping Container Code(SSCC)

Source: wikipedia

09 mars 2007

Vendor Managed Inventory (VMI)

Vendor Managed Inventory: A means of optimizing Supply Chain performance in which the manufacturer is responsible for maintaining the distributors inventory levels. The manufacturer has access to the distributors inventory data and is responsible for generating purchase orders.

To further define it, lets look at 2 business models:

Under the typical business model: When a distributor needs product, they place an order against a manufacturer. The distributor is in total control of the timing and size of the order being placed. The distributor maintains the inventory plan.

Vendor Managed Inventory model: The manufacturer receives electronic data (usually EDI or via the internet) that tells him the distributors sales and stock levels. The manufacturer can view every item that the distributor carriers as well as true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer generates the order*, not the distributor

*Note: VMI does not change the "ownership" of inventory. It remains as it did prior to VMI.

Consignment Inventory- When the supplier places inventory at a customers location and retains ownership of the inventory. Payment is not made until the item is actually sold.

The Benefits of VMI are numerous for both Manufacturer & Distributor. Here is a partial Listing:

DUAL BENEFITS:

• Data entry errors are reduced due to computer to computer communications. Speed of the processing is also improved.
• Both parties are interested in giving better service to the end customer. Having the correct item in stock when the end customer needs it, benefits all parties involved.
• A true partnership is formed between the Manufacturer and the Distributor. They work closer together and strengthen their ties.
• Stabilize the timing of Purchase Orders - PO's are now generated on a predefined basis.

DISTRIBUTORS BENEFITS:

• The goal is to have an improvement in Fill Rates from the manufacturer and to the end customer. Also, a decrease in stockouts and a decrease in inventory levels.


• Planning and ordering cost will decrease due to the responsibility being shifted to the Manufacturer.


• The overall service level is improved by having the right product at the right time.


• The manufacturer is more focused than ever in providing great service.

MANUFACTURERS BENEFITS:

• Visibility to the Distributors Point of Sale data makes forecasting easier.


• Promotions can be more easily incorporated into the inventory plan.


• A reduction in Distributor ordering errors (which in the past would probably lead to a return)


• Visibility to Stock Levels helps to identify priorities (replenishing for stock or a stockout?). Before VMI, a manufacturer has no visibility to the quantity and the products that are ordered. With VMI, the manufacturer can see the potential need for an item before the item is ordered

Source: Wikipedia

Cross Docking

Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer truck or rail car and loading these materials in outbound trailers or rail cars, with little or no storage in between. This may be done to change type of conveyance, or to sort material intended for different destinations, or to combine material from different origins.

In purest form this is done directly, with minimal or no warehousing. In practice many "cross-docking" operations require large staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship. If the staging takes hours or a day the operation is usually referred to as a "cross-dock" distribution center. If it takes several days or even weeks the operation is usually considered a warehouse.

Crossdocking is used to decrease inventory storage by streamlining the flow between the supplier and the manufacturer.

Typical Applications

• "Hub and spoke" arrangements, where materials are brought in to one central location and then sorted for delivery to a variety of destinations
• Consolidation arrangements, where a variety of smaller shipments are combined into one larger shipment for economy of transport
• Deconsolidation arrangements, where large shipments (e.g. railcar lots) are broken down into smaller lots for ease of delivery.

Factors influencing the use of cross docking

• Customer and supplier geography -- particularly when a single corporate customer has many multiple branches or using points
• Freight costs for the commodities being transported
• Cost of inventory in transit
• Complexity of loads
• Handling methods
• Logistics software integration between supplier(s), vendor, and shipper
• Tracking of inventory in transit

Source: wikipedia

02 février 2007

What is Supply Chain Management

Supply chain management (SCM) is the combination of art and science that goes into improving the way your company finds the raw components it needs to make a product or service and deliver it to customers. The following are five basic components of SCM.

1. Plan – This is the strategic portion of SCM. You need a strategy for managing all the resources that go toward meeting customer demand for your product or service. A big piece of planning is developing a set of metrics to monitor the supply chain so that it is efficient, costs less and delivers high quality and value to customers.

2. Source – Choose the suppliers that will deliver the goods and services you need to create your product. Develop a set of pricing, delivery and payment processes with suppliers and create metrics for monitoring and improving the relationships. And put together processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, verifying them, transferring them to your manufacturing facilities and authorizing supplier payments.

3. Make – This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity.

4. Deliver – This is the part that many insiders refer to as logistics. Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments.

5. Return – The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.

For a more detailed outline of these steps, check out the nonprofit Supply-Chain Council's website at www.supply-chain.org.