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Regular version of the site
Master 2019/2020

Supply Chain Diagnostics

Type: Elective course (Strategic Management in Logistics)
Area of studies: Management
Delivered by: Department of Logistics
When: 1 year, 4 module
Mode of studies: offline
Instructors: Pavel Sverchkov
Master’s programme: Strategic Management in Logistics
Language: English
ECTS credits: 3

Course Syllabus

Abstract

The most interesting and challenging part of logisticians' work include analysis of current logistic business processes and finding reserves to improve operational efficiency. Successful supply chain optimization and achieved savings always assume the previous step of clearly structured and well-managed diagnostics. Supply Chain diagnostics is a course about structural approach for analysis and investigation of operational efficiency in a number of areas within supply chain management. Classes will cover the following key SCM areas: • Planning • Procurement • Manufacturing • Distribution Approach for diagnostics within each area will include general sequence of steps, key aspects of SC efficiency to investigate, list of questions to address, examples of benchmarks and good practices to consider when comparing the current and the target states of supply chain and defining major deviations. Students also will be introduced to existent tools and methods for collection, processing and visualization of raw data and final results / conclusions of diagnostics. Course will help students to build up professional look on supply chain functional areas, develop skills for express analysis and problem identification, improve overall supply chain competence.
Learning Objectives

Learning Objectives

  • Course will help students to build up professional look on supply chain functional areas, develop skills for express analysis and problem identification, improve overall supply chain competence.
Expected Learning Outcomes

Expected Learning Outcomes

  • Knows basic concepts of SC diagnostics
  • able to analyze SC planning
  • able to analyze SC procurement
  • able to analyze SC manufacturing
  • able to analyze SC distribution
Course Contents

Course Contents

  • Introduction in methodology
    Supply Chain Management. Supply Chain Diagnostics. Internal audit. Supply Chain Due Diligence. Preventive and symptomatic diagnostics. Business process maturity assessment. Maturity model. Gap analysis. Data template. Supply Chain metric. Benchmarking. Supply Chain data analysis. Investigation and prioritization of hypothesis for performance improvement. Questionnaires, process maps and interviews as ways to collect information for maturity assessment. Types of questions within maturity assessment. Radar charts. Four business process maturity levels: lagging, developing, performing, leading. Approach to Supply Chain benchmarking. 6 types of benchmarking. Sources of benchmarking. Supply Chain key performance indicators. Supply Chain modeling. Five main types of Supply Chain data. Object- event simulation of logistic bottlenecks. Gaps identification. Two main criteria for prioritization of recommendations: business impact and easy of implementation. Prioritization matrix. Waves of recommendations. “Low hanging fruits”. Quick wins. Elevator test. Framework for diagnostics. Mnemonics. Areas and levels of analysis. The existing techniques of SC Diagnostics. The Depot Service Index. Hierarchy of Supply Chain metrics (by Debra Hofman). Cash-to-Cash cycle. Days payable outstanding. Days sales outstanding Root cause analysis. Supply Chain Diagnostic Tool (by J.H. Foggin). Customer value determination method. Means-ends hierarchies. Supply Chain Problem Symptoms. Quick Scan Audit Methodology (QSAM) (by M.M. Naim). Supply Chain optimization modelling architecture (SCOMA) framework. Supply Chain Operations Reference (SCOR) model. Four main areas of SC Diagnostics: Planning, Procurement, Manufacturing, Distribution. Five main levels of analysis: Strategy, Business processes, Infrastructure, Organization, system.
  • Diagnostics in planning
    Demand planning. Sales and Operations planning. Distribution requirements planning. Master scheduling. Materials requirements planning. Rough cut capacity planning. Order Promising. Available-to-promise. Capable-To-Promise. Client Order Decouppling Point (CODP). Postponement. Collaborative Planning. Advanced Planning & Scheduling System Assessment. Frozen schedules. S&OP planning issues and opportunities. Check-list collaboration issues in product development and improvement. Check-list collaboration issues in order, delivery and receiving process. Determination of the cycle information flows. Forecasting method and timeline. Relationship between the forecasts method and the demand pattern of products. Variety analysis of goods for forecast technique selection.“Brown paper” analysis. Forecast accuracy. Bias. Standard deviation of forecast error (MAD). Impacts of forecast errors ABC-classification of inventory. Inventory Carrying Strategy. Inventory Carrying Costs. Inventory Service Level. Inventory Pareto Analysis. Inventory Gap Analysis. Inventory Item Diagnosis. Slow moving inventory. Illiquid inventory. Inventory turns. Stock days. Out-of-stock. On-stock availability
  • Diagnostics in procurement
    Procurement. Sourcing and Purchasing as the main parts of Procurement. Spend profile. Spend analysis. Spend data and spend cube dimensions. Main spend data: Price data, Volume data, Supplier reliability data and Cash-to-Cash cycle data. Sources of spend data: purchase requisitions, purchase orders, contracts, invoices, ERP system transactions. Hypothesis to be generated on the basis of spend analysis. Main savings levers: Price competition, Demand management, Total cost of ownership, Contract structuring. Estimation of savings in procurement. Maturity assessment of procurement business processes. Five groups of processes: Category management, Supplier relationships management, Purchasing, Contracting and Material flow management. Examples of maturity assessment. Organizational structure benchmarking. Organizational chart analysis. Benchmarking a number of procurement staff. Quantitative metrics for benchmarking. Motivation system. Procurement data availability check. IT capability mapping. Standard IT functionality utilized in procurement operations. Business requirements for automation in procurement.
  • Diagnostics in manufacturing
    Cost of quality problems. Drivers of the quality problems. Conformance to schedule of production and the drivers for non-conformance. The strategic importance of quality – an organization’s competitive environment. The tactical importance of quality – cost of rejects, rework, and scrap and disruptions to operations resulting from quality problems. Product and Process Quality. Quality metrics. Yield loss. Yield loss drivers. A causee and effect analysis of quality problems. Production performance. Overall equipment efficiency. Downtime analysis. Rated capacity: product of available time, utilization and efficiency. Bottlenecks identification. Input / Output control report. Order Fulfillment Lead Time. Production schedule attainment. MRP Nervousness. Rapid plant assessment (RPA). 7 types of waste in Lean manufacturing. The areas of waste: Excessive Motion, Waiting Time, Over Production, Unnecessary Processing Time, Defects, Excessive Inventory, and Unnecessary Material Movement. Kaizen typical hypothesis: Manufacturing Cycle Time Reduction, Cell layout, Setup/Tool Change Time Reduction, etc.
  • Diagnostics in distribution
    Distribution. Transportation and Warehousing operations. Transport KPIs: Transportation costs as a % of sales, Logistic service level, Down time (demurrages), Truck utilization. Warehousing KPIs: Economic costs, Useful square utilization, Space utilization, Receiving & Shipping Volumes, Annual Operating Cost. Warehouse Operations Effectiveness. Warehouse Facility Effectiveness. Distribution network design. Logistic audit of network design. Analyses on product groups, supply chain entities, service levels, product flows, costs and any gaps between the current and desired situation .General Optimal Market Area (GOMA) Model (by D. Erlenkotter). Distribution business processes maturity assessment. Customer Order Fulfillment. Distribution Operations Quick Analysis. Modern IT technologies to support distribution operations.
Assessment Elements

Assessment Elements

  • non-blocking case work
  • blocking Final test
Interim Assessment

Interim Assessment

  • Interim assessment (4 module)
    0.6 * case work + 0.4 * Final test
Bibliography

Bibliography

Recommended Core Bibliography

  • Blanchard, D. (2010). Supply Chain Management Best Practices (Vol. 2nd ed). Hoboken, N.J.: Wiley. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=319508
  • O’Brien, J. (2019). Category Management in Purchasing : A Strategic Approach to Maximize Business Profitability. London, United Kingdom: Kogan Page. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=2037093
  • Rushton, A. (2017). The Handbook of Logistics and Distribution Management : Understanding the Supply Chain (Vol. 6th revised edition). [Place of publication not identified]: Kogan Page. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=1446716

Recommended Additional Bibliography

  • Ballou, R. H. (2012). Business logistics management : planning, organizing, and controlling the supply chain. Slovenia, Europe: Prentice-Hall International. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsbas&AN=edsbas.7F7B29C
  • Christian Schuh, Joseph L. Raudabaugh, Robert Kromoser, Michael F. Strohmer, Alenka Triplat, & Jim Pearce. (2017). The Purchasing Chessboard. Springer. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.spr.sprbok.978.1.4939.6764.3
  • Erlenkotter, D. (1989). The General Optimal Market Area Model. Annals of Operations Research, 18(1–4), 45–70. https://doi.org/10.1007/BF02097795
  • Eyob, E., & New, S. (1993). World Class Production and Inventory Management. Interfaces, 23(6), 144–145. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=bsu&AN=4493029
  • Lütke Entrup, M. (2005). Advanced Planning in Fresh Food Industries : Integrating Shelf Life Into Production Planning. Heidelberg: Physica. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=145555
  • Palmatier, G. E., & Crum, C. (2003). Enterprise Sales and Operations Planning : Synchronizing Demand, Supply and Resources for Peak Performance. Boca Raton, Fla: J. Ross Publishing. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=103657
  • Simchi-Levi, D., Kaminsky, P., & Simchi-Levi, E. (2004). Managing the Supply Chain : The Definitive Guide for the Business Professional. New York: McGraw-Hill Professional. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=124519
  • Smith, J. S., Karwan, K. R., & Markland, R. E. (2007). A Note on the Growth of Research in Service Operations Management. Production & Operations Management, 16(6), 780–790. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=bsu&AN=31171561
  • Wild, A., & Institute of Operations Management. (2002). Best Practice in Inventory Management (Vol. 2nd ed). [Coventry, England]: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=195574