Chapter 3_The Supply Management Process.pptx

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1. Chapter III The Supply Chain Management Process

2. Chapter Objectives

3. How does supply chain management work? Supply chain management (SCM) represents an effort by suppliers to develop and implement supply chains that are as efficient and economical as possible. Supply chains cover everything from production to product development to the information systems needed to direct these undertakings.

4. How does supply chain management work? SCM attempts to centrally control or link the production, shipment, and distribution of a product. By managing the supply chain, companies can cut excess costs and deliver products to the consumer faster. This is done by keeping tighter control of internal inventories, internal production, distribution, sales, and the inventories of company vendors. SCM is based on the idea that nearly every product that comes to market results from the efforts of various organizations that make up a supply chain.

5. 5 components of SCM Planning Sourcing Manufacturing Delivering Reurning

6. Supplier Development Working with suppliers to help increase efficiency and decrease cost for the benefit of both supplier and buyer

7. Successful companies have incorporated suppliers into management decisions. It identifies strategic suppliers providing critical components and ensures good partnerships and relationships between supply chain members. Suppliers are also expected to add value to the supply chain process and not just simply engage in transactions of the component for sale.

8. Supplier Development can be segmented into 5 functions: Strategic planning and risk decision Engagement, collaboration, and project management Training and facilitation Continuous improvement and surveillance Quality systems, process, and control.

9. Each organizations struggles with late deliveries, poor quality and inadequate responses to problems by suppliers

10. Supplier development programs aim at achieving lower supply chain cost, increase in product quality, increased profitability for all supply chain participants, and near perfect 0n-time delivery at each point in the supply chain

11. The Product Development Within Hospitality Environments  Different types of hospitality products and services The hospitality industry including food and tourism services, is more susceptible to economic fluctuations compared to other industries economic fluctuations- are changes in national income and economic growth. These changes are caused by the level of employment, productivity, and the total demand for supply of the nation’s goods and services. The industry consist of two major areas such as lodging and the entertainment. Involvement of the information technology is a developing trend in the industry. example: travel technology

12. The Product Development Within Hospitality Environments  Different types of hospitality products and services (cont..) because trends of demand are frequently changing, the on-time changes may be highly effective. Example: Cultural Values can be cooperated. In Community based Tourism the unique and aesthetic value of the different destinations.

13. The Product Development Within Hospitality Environments 

14. Institutional source-based demand patterns may arise from commercial enterprises, educational institutes, and other government and non-government bodies that are incorporated with the economic sector. Historical, aesthetic beauty, cultural, and extraordinary attractions can be considered under the demand pattern based on recreation. ex. El Nido attracts thousands of tourists and many 5-star hotels may provide facilities for them. Small individual groups who are expecting a break during their long journey can be considered as the demand based on transit sources.

15. Product Development Within Hospitality Environments 

16. The Product Development Within Hospitality Environments  3. Different characteristics of the tourist (cont..) Their requirements may be based on the availability of space in relation to advanced conference rooms with multimedia rather than lodging. Leisure travelers may include the people engaged in vacations or sporting events or other personal visits. Most of the time, their major need may be comfortable lodging facility at an affordable price. But, the group meeting traveler group may include both business and leisure travelers.

17. The Product Development Within Hospitality Environments 

18. The Product Development Within Hospitality Environments 

19. The product development within hospitality environment

20. Product development is important in the modification of existing products to cope with identified opportunities and the modern marketing trends. It may provide the improved quality for the product and the customer satisfaction. Product development process should be consisting of knowledge on the product weaknesses and strengths, modern marketing trend which is facilitated by the advanced technology.

21. Kotler’s principal product Development Core product- basic selling of product. ex. Hilton Hotel resort may provide well-appointed rooms, excellent dining and the other services for their customers. Augmented product- may include the extra services and value added services which may provide for their customers. For an example, gym facilities, spa facilities and the other packages relevant to the different sports such as Golf and Tennis Tangible product- Tangible products can be identified as the products that can be physically feel by the customer. For an example, restaurant of Intercontinental Sea Bq provides sea foods for the customers.

22. According to the novel product development process five(50 major steps can be identified) Generation of idea Screening process Evaluation of idea/development of concept Product development/ Business Analysis Commercialization process

23. Idea generation may be a result of a market research. It would be the confirmation of a requirement of a product based on existing consumer need.

24. Screening process ideas may be collected from media, potential customers and employees.

25. Evaluation of Idea / Development of Concept Revenue, cost, and expected profit may identified in the idea evaluation step. Market research may be important in this step. The expected customers may be described theoretically.

26. Product development / Business Analysis physical production and manufacturing process may do and the selling price may also determine. Not only will that, testing of the product also be done.

27. Commercialization process Commercialization is the process of bringing new products or services to market. The broader act of commercialization entails production, distribution, marketing, sales, customer support, and other key functions critical to achieving the commercial success of the new product or service.

28. Returns management Returns management is the supply chain management process by which activities associated with returns, reverse logistics, gatekeeping, and avoidance are managed within the firm and across key members of the supply chain.

29. Consumables in Hospitality Consumables are products that consumers use recurrently, i.e., items that "get used up" or discarded. Ex. Catering consumable in the restaurant. Hotel room accessories, such as furniture, linens, and equipment, are used repeatedly and can withstand wear and tear. Consumables, however, are used up or thrown away after a single use, such as slippers, robes, bags, umbrellas, toiletries, food and beverage supplies, and cleaning products.

30. Implements supply chain management in the hotel industry Tactical Level a. Executive support tactical level of implementation of logistics and supply chain management focuses on steps that are taken at a higher level for successful implementation. It is important that, during the tactical stage of implementation there is 100 % executive support and buy-in from senior managers and having the right people in place who understand the value logistics and supply chain implementation will bring to their properties. Managers need to take a lead in communication and making sure all employees understand why the initiatives are essential to the company’s business strategy.

31. Implements supply chain management in the hotel industry b. Visibility and Control- It is important to have visibility and control to implement logistics and supply chain practices to help make better decisions. The hotel environment has seen an increase in the need for visibility and control to help understand the decisions made by vendors and suppliers to help managers make well-informed logistics and supply chain decisions. This helps hotel managers make important decisions on parts of costs in areas of transportation and shipping

32. Implements supply chain management in the hotel industry b. Visibility and Control- It is important to have visibility and control to implement logistics and supply chain practices to help make better decisions. The hotel environment has seen an increase in the need for visibility and control to help understand the decisions made by vendors and suppliers to help managers make well-informed logistics and supply chain decisions. This helps hotel managers make important decisions on parts of costs in areas of transportation and shipping

33. Implements supply chain management in the hotel industry c. Benchmarking -This goal of benchmarking during logistics and supply chain implementation is to enhance design and operational effectiveness. It is important for hotel managers to measure set targets against results in the different areas of operation like order filling, transportation, and vendor compliance. Hotels can use information from benchmarking to improve processes and make better decisions.

34. Implements supply chain management in the hotel industry d. Creative solutions and risk taking-The goal of developing creative solutions and willingness to take risk during logistics and supply chain implementation is important since a lot of focus has been placed on reducing costs and increasing margins wherever possible. This helps focus on negotiating better costs and focus is placed on the customer’s demands.

35. Implements supply chain management in the hotel industry Strategic level a. Change management- the strategic level of implementation of logistics and supply chain management is linked to the long-term benefits over a period of time. Change management plays a big part in logistics and supply chain implementation in different areas, from making changes to the whole process or fixing issues with vendors. With the fast pace of the hotel industry during implementation, it is important for managers to think and act in real-time to help enable innovation and change, as people will always challenge the process.

36. Implements supply chain management in the hotel industry Strategic level b. Think Lean and Green-Even though lean started in the automotive industry, it can be used in any business process like in the hotel industry. Hotel managers need to use lean strategies when logistics and supply chain is implemented immediately instead of later. Since lean is focused on the end user, the main focus during implementation is to maintain profitability, save money, and add value that fulfills customer needs. During the lean implementation phase, it is important for managers to identify the service value stream focusing on design layout, development, procurement, and distribution process strategies.

37. Implements supply chain management in the hotel industry Strategic level c. Top talent and Accountability- When implementing logistics and supply chain management in any company, it is important to be able to sustain the implementation, which involves building a solid foundation that includes top managers to drive the process with deep expertise in logistics and supply chain functions and business skills.

38. Implements supply chain management in the hotel industry 3. Operational level a. cost- The operational level of logistics and supply chain management implementation focuses on decisions that are related to how to make the tactic approach happen in the short term.

39. Implements supply chain management in the hotel industry 3. Operational level b. Simplifying complexities is important in logistics and supply chain implementation for hotel managers to manage strategies to eliminate complexities that do not add any value to the organization. It is important that logistics and supply chain functions are broken down into different areas based on which areas matter the most in the supply chain. This segmentation helps hotel managers easily identify the relationship between costs and price with suppliers and helps in negotiating better prices.

40. Implements supply chain management in the hotel industry 3. Operational level c. Right metrics- Applying key performance indicators (KPI’s) to logistics and supply chain operations during implementation is vital to help monitor how well suppliers and vendors are meeting set targets, which helps improve top and bottom line performance. Starbucks created a weekly scorecard to monitor third party carrier performance in areas of costs, service, and productivity agreed upon with their partners. Applying KPI’s to operations will help create transparency, improve costs, and help serve customers better, as well as lay the foundation for future logistics and supply chain initiatives.

41. Implements supply chain management in the hotel industry 3. Operational level d. Risk management- Considering risk management is critical during logistics and supply chain implementation for hotel managers in order to evaluate risk associated with implementation in their strategy. Managers should have a good understanding of the benefits involved with sharing risk information across the network.

42. The End Quiz Next Meeting!