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Summary Supply Chain Management - Joris Leeman

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Summary study book Supply Chain Management of Joris Leeman - ISBN: 9783839137918, Edition: 1, Year of publication: 2010

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  • Ja
  • 9 juni 2015
  • 26
  • 2014/2015
  • Samenvatting
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Summary Supply Chain Management

Chapter 1 Introduction

§1.1 Strategy, verticalisation and supply chain management
- Speed up the supply chain and verticalise/integrate processes and systems
upstream and downstream in the supply chain.
- Vertical retailers have responded by:
 Increasing the probability of designing a bestselling product by
dramatically shortening the product’s time to market;
 Piloting the products in the stores and then replenishing the bestsellers
within 14 days by new type of make-to-order processes;
 Driving the inventory sales productivity by keen assortment and delivery
planning;
 Integrating the IT systems from point of sale back into production factories
and from there toward fabric suppliers;
 Focusing on quality of workmanship through fitting and process quality.
- Vertical retailers have their own retail stores and have tight control over their
manufacturers in comparison with brand label manufacturers, who have to
integrate their processes and systems from Point-of-Sales back into the Factory.

§1.2 Manufacturers and Retailer
- Retail issues  retail business drivers that drive the retail sales productivity -
performance:
 Time-to-market: reduced product development and product delivery time
enables to decide later in the process about the final product to bring on
the market.
 Shelf availability: having the product on the shelf at the right location
within the store, and be able to replenish it fast enough to the retail space
to maintain a high service level and avoid lost sales. Balancing a high
service level to the consumer versus maintaining a cost efficient inventory
level in the store.
 Transaction cost: overall cost per piece from manufacturing to retail sales.
- Vertical retailers have a better position to influence the retail business drivers.
- Figure 1 page 4: retail channels and its players in the supply chain network.
- Vertical integrated: Brand label manufacturers who run their own retail stores
and organize the manufacturing themselves.
- Vertical collaboration: Brand label manufacturers who cooperate/collaborate
with retailers and preferred, key suppliers to maintain end-to-end supply chain,
as if it were owned by the brand label manufacturer.
- Independent: the independent retailers and brand label manufacturers who do
not work together with each other.
- Measuring the performance results with operations performance, retail sales
productivity and financial performance.
- Figure 2: Retail business drivers and Performance results.

§1.3 Competing supply chains
- The design and engineering of a complete end-to-end Supply Chain System
includes the management of its (figure 3 page 6):
 Merchandise Planning and Assortment Flow: all the activities of a retail
merchandiser/product category manager to define and manage which
products and in what quantities price/fashion degree – levels move to
which retails stores by what delivery cycles during the year.

,  Logistics Infrastructure: the physical network infrastructure to
manufacture, transport, consolidate and deconsolidate and distribute the
merchandise to the retail stores.
 IT – Systems Network: the information systems, the electronic
collaboration with external partners and set up of an e-business network to
further enhance the collaboration via trade portals and internet.
- These actions are mostly seen as separate, which results in lost time, increased
cost, lack of visibility or inflexibility and frustration.
- Internal cooperation and external collaboration provide the basics for managing
the retail business drivers and improving the retail sales productivity.

§1.4 Supply Chain System – model
- Figure 4 page 8 to create the ‘pipeline structure’ and manage the ‘water flow’
through the supply chain.

§1.5 Elements of the model
1. Merchandise Flow Planning and Control
- How to design and develop the merchandise planning and assortment flow.
- Different types of merchandising business models (like push, pull or a
combination), sales productivity targets for the retail stores, merchandise
allocation planning and the replenishment process to synchronize the deliveries
and sales in the retail stores.

2. Supply chain management
- End-to-End thinking within the organization from POS back into the factory
- The development of a cost efficient an flexible physical SCM infrastructure to
move merchandise from manufacturer to retailer
- Set up of an information systems network to create visibility within the pipeline
- The focus on managing the supply chain by setting and managing time, service
or cost drivers.

3. Supplier Relationship Management
- Developing strategic supplier relationships with selected key suppliers
- The development of IT-systems to integrate each others processes and systems
- Monitoring the supplier performance via factory visits, ongoing supplier rating
performance and supplier education programs.

4. Outsourcing
- Move faster as an organization by focus on core competences
- It provides additional management capacity to the organization
- Flexibility, variable cost driven and eliminates high fixed costs investments
- Success and partnership development with the logistic service provider

5. IT –systems platform
- Optimise and synchronise the demand/supply –process cycles by means of
exchanging information between IT systems.
- Identification of the organization’s key processes and business functions
- Creation of collaborative IT Systems between the different members of the
supply chain
- Set up of the internal IT systems platform
- Definition of the IT-Roadmap.

6. Efficient Consumer Response and Collaboration

, - Enable electronic business with other companies following specific worldwide
transaction standards.
- The exchange of information via EDI and the development of partnerships to
collaborate and integrate.

7. E-Business network
- Development of the IT network structure to collaborate.

8. Organization and Change Management
- How to transform the organization towards a verticalised company.
- Team consisting of change agents who drive the change management process
within the organization and with its customers, suppliers and external partners.

Chapter 2 Merchandise flow planning and control

§2.1 Time-to-Market and Vertical Integration
- Merchandise flow planning and assortment flow includes the complete
assortment planning and merchandising of its product flows.
- Product flows can be characterized and categorized by its product life cycle, its
seasonality patterns, product features, collection and price levels which define
the supply chain process development  set of products can be seen as an
independent product flow.
- Each type of product flow requires its own level of TTM, Vertical Integration and
a supply chain system (figure 6 page 19)  time or cost leadership.
- To be close to the market enables Vertical Retailers to predict demand of the
consumer more precisely and make more accurate design and product
development decisions.
- Brand label manufacturers and department stores need to shorten the TTM of
their product development and need to intensify the vertical integration with
their partners in the supply chain, in order to regain competitiveness against the
vertical retailers.

- Time-to-market models figure 7 page 21  reduce lead time in number of
working days from product development up to product delivery into the stores.
- Benefit of monthly delivery is the ability to decide about the final product design
much closer to the actual product delivery moment  reducing the risk of
designing a product that won’t sell.
- The factor time is one of the determining criteria for success in the marketplace.
- Shortened TTM increased the probability of designing more bestseller products.
Product development needs to be as close as possible to actual product delivery
to the market. The closer design is to the market, the more accurate it can be in
fulfilling the customer’s demand.

§2.2 Choosing the Merchandising Business Model
- Push principle: the type of design and moment of supply o
f the merchandise is decided by the brand label manufacturer  the presented
collection is based upon the designer’s vision on what consumer needs to wear.
- Push principle is supply driven: it pushes the merchandise from the factory into
the stores. Mostly brand label manufacturers and department stores follow this
principle, but could apply the pull principle for standard products which should
always be available for purchase in the stores.
- Pull principle: the type of design and moment of supply of the merchandise is
more or less decided by the consumer  consumer selects which products he/she
wants to have on stock in the retail stores.

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