Electronics Manufacturing – B324
Supply chain analysis
Where and how were these computers manufactured?
A supply chain is a goal oriented network of processes and organizations.
Source: National Research Council Staff (2000). Surviving supply chain integration: strategies for small manufacturers. Washington, DC: National Academies Press.
Supply chains
transfer two commercially valuable assets:
- Stock (products)
- Information
A supply chain should support
strategic goals, such as:
- Cost
- Quality
- Speed
- Service
- Flexibility
Electronics manufacturing supply chain in 1990:
Source: Gover, J. & Gwyn, C. (1992). Strengthening the us microelectronics industry by consortia. Albuquerque: Sandia National Laboratories.
Personal computer manufacturing supply chain during 1990s:
Source: Dedrick, J., Kraemer, K. (2005). The impacts of it on firm and industry structure: the personal computer industry [Electronic version]. California Management Review, 47(3), 122-142.
Personal computer manufacturing supply chain after 2000:
Source: Dedrick, J., Kraemer, K. (2005). The impacts of it on firm and industry structure: the personal computer industry [Electronic version]. California Management Review, 47(3), 122-142.
Supply chain operations have different levels of
planning integration:
- Collaborative integration requires trust.
- Optimized integration require control and trust.
What are specific
examples might have a
manufacturing supply chain like this?
- What do the blue arrows represent?
- What is not on this diagram?
What are specific
examples might have a
manufacturing supply chain like this?
What are specific
examples might have a
manufacturing supply chain like this?
Percentage of computer shipments by
sales channel:
| Company | INDIRECT | DIRECT |
| Retail | Reseller | Sales | Internet |
| 1995 | 2005 | 1995 | 2005 | 1995 | 2005 | 1995 | 2005 |
| HP | 20 | 51 | 80 | 21 | 0 | 24 | 2 | 5 |
| Dell | 0 | 0 | 0 | 6 | 100 | 67 | 15 | 27 |
| Acer | 31 | 3 | 67 | 96 | 3 | 0 | 10 | 0 |
| IBM | 30 | 0 | 57 | 51 | 14 | 36 | 6 | 13 |
| Apple | 36 | 39 | 53 | 13 | 11 | 43 | 7 | 4 |
Source: Adapted from Dedrick, J., Kraemer, K. (2007). Market making in the pc industry. Irvine, California: Personal Computing Industry Center.
Principles for supply chain
planning:
- The primary purpose of planning is to improve decision making.
- Planning is an integration process.
- Plan to control and minimize risk, not to completely eliminate risk.
- Do not plan if there is insufficient information, little variation or no decision making.
- More planning is not necessarily more beneficial.
- Planning is mostly re-planning.
- Planning is specific to each organization.
- There is no one best plan for all organizations.
- Planning is not a replacement for operations and strategies.
The bullwhip effect reflects the volatility that is propagated through a supply chain due to forecasting errors, buffering and gaming behaviour.
A short run is a period of time when at least one input variable is fixed. Otherwise, it is a long run.
The
inventory order interface is the
location in a supply chain where a
unique customer order is fulfilled by stock inventory.
Demand models:
- Keep finished goods inventory (FGI).
- Make to stock (MTS).
- Configure to order (CTO).
- Assemble to order (ATO).
- Make to order (MTO).
- Engineer to order (ETO).
- Make once (project).
Classic models of supply chain operations are based on
inventory control.
- More effective for distribution supply chains.
- More effective for supply chains with less pooling locations.
Material requirements planning (
MRP) took advantage of computers to
optimize inventory of dependent stock.
- Less effective with increase in supply chain size and complexity.
- Rigid master production schedules may cause excess buffering.
Just-in-time (
JIT) operations relied on the
demand pull in a supply chain to
trigger production of a small batch of dependent stock.
- More effective with higher schedule integration.
- Reduced the bullwhip effect in a supply chain.
- Lean manufacturing is the widespread application of JIT principles to minimize buffering costs.
Vendor managed inventory (
VMI) took advantage of information technology to implement a
push model where the
manufacturer or supplier controls the inventory at a retailer.
- The manufacturer or supplier has full control of the inventory level at a retailer in a hard VMI model.
- The retailer has the option to modify the inventory level in a soft VMI model.
- The consignment VMI model stipulates that the inventory remains property and liability of the manufacturer or supplier until it is consumed by customers.
Theory of Constraints (TOC) advocated that supply chains can maximize output by focusing on
effective management of the bottlenecks (i.e. constraints).
- Identify the constraints.
- Identify steps to exploit the constraints.
- Subordinate everything else to steps in 2.
- Fix the constraints.
- Go back to 1 whenever constraints have changed.
TOC strategies raised the importance of supply chain management for integrating all activities in a business.
Fully scheduled operations propose that
mathematical optimizations should be applied to all planning decisions.
- More effective for a short run.
- High level of dependency on information technology and data integration.
Trends affecting the
design of manufacturing supply chains:
Information technology
- Competitive advantage
- Business risk
- Bullwhip effect
- Standards ownership
Global capital markets
- Distribution of financing
- Distribution of profit
Transportation logistics
- Just in time manufacturing
- More markets for products
Global manufacturing
- Business specialization
- Risk specialization
