Lecture 5 Supply Network Management
Lecture 5 Supply Network Management
Lecture 5 Supply Network Management
Types of relationship
Business to Business - E.g. Alibaba.com, Boeing
Business to Consumer E.g. Nestle, Unilever, Lacoste
Consumer to Business Consumer places an offer and business decides to buy,
Google AdSense
Consumer to Consumer Auction sites like eBay and file sharing sites
Trust
Virtual Operations
Virtual operations do relatively little themselves, but rely on a network of
suppliers that can provide services and products on demand
Example: Hollywood film industry. A production company may buy and develop
an idea for a movie but it is created, edited and distributed by a loose network
of agents, actors, technicians, studios and distribution companies.
Advantage: Flexibility and low risk due to low level of investment in facilities.
Disadvantage: Outsourced Expertise available to everyone and difficult develop
a unique core of technical expertise
Core Competence = Management of the supply network
Sourcing Suppliers
The ability to produce a quality product at a reasonable cost and in a timely
manner is heavily influence by its suppliers capabilities
Supplier selection is one of they key issues of Supply Chain Management as cost
of materials and components makes up majority of the cost of a product
Numerous factors are considered when choosing a supplier. Factors include hard
factors such as cost, quality, delivery and downtime, as well as, soft factors such as
capability, work culture, ethics, environment etc. Due to importance of factors
varying, companies use a weighted system to make supplier decisions.
The tendency of supply chains to amplify relatively small changes at the demand
side of a supply chain such that the disruption at the supply end of the chain is
much greater.