SCM,Networks ,Extended

Organisation and Generalised Supply

Chain Model
Dr Arvind Kalia
 Value delivery Networks
• Value delivery network is a part of supply
chain of a company and includes all its direct
participants involved in production,
distribution, marketing, customer service, etc
for given geographical area.
 Value delivery Networks
• It is a chain of system where after each system
more a more value is added to the product or
services thereby increasing its overall value for
the customer.
 Value delivery Networks
• Each system is partnering with other system to
provide better value to the customer.
Production system uses feedback sales history
to produce the right product in required
quantity. The value created through such
partnering depends upon the quality of
relationship between the systems.
 Supply Chains and the Value Delivery Network

Value Delivery Network

The network made up of the company, suppliers,

distributors, and ultimately customers who
“partner” with each other to improve the
performance of the entire system.

•Marketing Channel
Set of interdependent organizations involved in the
process of making a product or service available for
use or consumption by the consumer or business
user.
What Is Extended Enterprise?

The term "extended enterprise" represents a new

concept that a company is made up not just of its
employees, its board members, and executives, but
also its business partners, its suppliers, and its
customers.
The notion of extended enterprise includes many
different arrangements such as virtual integration,
outsourcing, distribution agreements, collaborative
marketing, R&D program partnerships, alliances,
joint ventures, preferred suppliers, and customer
partnership.
 Virtual Integeration
• Virtual integration is a new form of value chain
management. Under such a system, the links of
the value chain are brought together by informal
arrangements among suppliers and customers.
Shipments of the components that your firm
needs can be easily arranged through the
Internet or a networked computer system. The
same type of arrangement allows you to fully
serve your customers in ordering, services, or any
other needs.
 Virtual Integeration
• "Virtual integration can improve process coordination
and control, and help to better manage demand
volatility, allowing manufacturers to substitute
'information for inventory' and thereby improve
resource utilisation for all parties (Foster & Regan,
2001; Wang et al., 2006)."
•
Virtual integration stitches together a business with
partners that are treated as if they are inside the
company (Michael Dell, Founder of Dell Inc.)
 Virtual Integeration
• The term virtual integration was introduced by
Michael Dell in the 1990s to describe
processes resulting from combining traditional
supply chain vertical integration with the
characteristics of the virtual organisation.
Virtual integration uses technology to bind
together a dispersed network of suppliers,
manufacturers and distributors (Kraemer &
Dedrick, 2002).

Amazon Testing Drone Delivery System (Low).mp4 Virtual tracking of supply chains at Bosch - YouTube (360p).mp4
 Strategic Alliances
• An arrangement between two companies that have
decided to share resources to undertake a specific,
mutually beneficial project. A strategic alliance is less
involved and less permanent than a joint venture, in
which two companies typically pool resources to create
a separate business entity. In a strategic alliance, each
company maintains its autonomy while gaining a new
opportunity. A strategic alliance could help a company
develop a more effective process, expand into a new
market or develop an advantage over a competitor,
among other possibilities

Walmart Supply Chain (HD-720p).mp4

 Customer Partnership
• "Customer partnership is a shared journey to
create a future for both parties that is better
than either could have developed alone.
 Outsourcing
• Outsourcing is a business practice in which a
company hires another company or an
individual to perform tasks, handle operations
or provide services that are either usually
executed or had previously been done by the
company's own employees. ... Companies
today can outsource a number of tasks or
services.
 Generalised Supply Chain Model
• The general concept of an integrated supply chain is typically
illustrated by a line diagram that links participating firms into a
coordinated competitive unit. Figure 1-1 illustrates a generalized
model adapted from the supply chain management program at
Michigan State University.
• The context of an integrated supply chain is multi firm relationship
management within a framework characterized by capacity
limitations, information, core competencies, capital, and human
resource constraints. Within this context, supply chain structure and
strategy results from efforts to operationally link an enterprise with
customers as well as the supporting distributive and supplier
networks to gain competitive advantage.
• Business operations are therefore integrated from initial material
purchase to delivery of products and services to end customer.
 Supply Chain Synchronization
• Synchronizing the supply chain is, in essence, getting all of
the partners operating in a manner that is mutually
supportive (flexible, cooperative) and seamless (smooth,
unnoticed by customers).
• The synchronization process starts with a clear definition of
roles and responsibilities. That is, making sure that all
supply chain partners know specifically what tasks they are
expected to perform (e.g. storing goods, modifying them,
reassembling quantities, price marking), when they are
expected to do them (lead times and deadlines), how they
are expected to perform them (i.e. to what operating
specifications), and what results are expected (sales quotas,
customer satisfaction ratings).
 Five Steps To Synchronizing Your
Supply Chain
• 1. Facilitate collaboration and engagement -
Enlist the supply chain participants as key
stakeholders and make sure everyone is
engaged in their role in making this work, both
internally and externally. Segment your
suppliers, identifying the relationships that
yield the most profits and start the process
with them first.
 Five Steps To Synchronizing Your
Supply Chain
• 2. Establish full and complete visibility - Map
the end-to-end processes in the shared
community. Ensure you identify and road test
every process to provide exact lead times with
all considerations and any known buffers.
Share that data with the community, so
everyone knows what to expect.
 Five Steps To Synchronizing Your
Supply Chain
• 3. Collect and analyze real time and trusted
data - Define who provides the data, how to
capture it, and where it needs to go so that all
parties are working off one version of the
truth.
 Five Steps To Synchronizing Your
Supply Chain
• 4. Monitor, manage, execute - Ensure the
system informs everyone in real time on any
deviation to the plan or where disruption may
loom, so allowing all participants to
collaborate and take action as appropriate.
 Five Steps To Synchronizing Your
Supply Chain
• 5. Measure, remodel, re-engineer - Don’t wait
for end-of-year reviews to examine whether
your supply chain synchronization efforts are
working. Regularly measure performance and
let the system analyze and predict to help plan
for future ordering.