Global Supply Chain and Operations Management

This chapter introduces global supply chain and operations management. Underlying issues related to the observed transformation process(es) and value creation are analysed. The definitions of operations, supply chains, operations management and supply chain management are provided. Subsequently, typical decisions in the scope of supply chain and operations management are systematically rolled out. Practically relevant objectives to measure supply chain and operations performance are discussed. The question of which qualifications should obtain a future supply chain and operations manager is addressed and, finally, possible career paths for supply chain and operations managers are discussed.

This chapter provides up-to-date examples of supply chain and operations management in manufacturing, services, and e-operations. The case-studies include examples of operations and supply chains from different industries, services and continents. Particular focus is directed to e-operations and e-supply chains. With the help of the case-studies the readers obtain an overview of typical decisions and trade-offs in supply chain and operations management that will be addressed in detail in further chapters of the textbook. An E-Supplement containing additional case studies and video streams provides additional insights related to the content of this chapter.

This chapter starts with an introductory case-study from aerospace industry. In the first part, the interrelations between business processes, quantitative models, and information systems are discussed. Next, the role of business process management in operations and supply chains is considered. Subsequently, the effects of management information systems in supply chain and operations management are analysed. In particular, ERP, APS, WMS as well as RFID technologies are considered. In the second part, the terms “planning”, “problem”, and “decision” are clarified. The role of models and modelling in decision-making is discussed. Furthermore, this chapter analyses the crucial role of uncertainty, resilience, and risk management in decision-making. Finally, quantitative methods of decision-making are presented and discussed with regard to their applicability to supply chain and operations management. An E-Supplement provides additional case studies and video streams.

This chapter discusses basic supply chain and operations strategies. It starts with an introductory case-study considering supply chain strategies in the apparel industry. In the first part, operations strategies as well as the “strategic fit” are discussed. Subsequently, efficient and responsive supply chain strategies are distinguished. In the second part, the bullwhip-effect in the supply chain and mitigating coordination strategies such as Vendor-managed Inventory (VMI) and Collaborative Planning, Forecasting, and Replenishment (CPFR) are presented. Finally, the issues of supply chain resilience and sustainability are discussed. Additional case studies, Excel templates, tasks and video streams as part of an E-supplement enrich this chapter.

This chapter discusses sourcing strategies. It starts with an introductory case-study considering the logistics coordination concept at a global car manufacturer. In the first part, the roles of purchasing, procurement, and sourcing in supply chain and operations management are elaborated. The basic elements of a sourcing process are defined. Next, the issues of make-or buy vs outsourcing as well as organization issues in sourcing are discussed. Subsequently, sourcing strategies are classified according to the number of suppliers, geographical supplier distribution as well as sourcing principles. The methods of spend analysis and supplier selection are presented. Basic elements of the supplier relationship management (SRM) are classified. All proposed concepts are further analyzed by examples such as the sourcing strategy of a global electronics company and the just-in-time strategy in the automotive industry. Additional case studies, Excel templates, tasks and video streams as part of an E-supplement enrich this chapter.

In this chapter, production strategies are discussed. It starts with an introductory case-study considering production strategies at global electronics companies. At the beginning, push and pull views of the supply chain are discussed. Next, the concepts of mass customization and modularization as well as the order penetration point and postponement approaches are introduced. Subsequently, basic production strategies in the supply chain are depicted. Finally, a method for the analysis of the order penetration point location in the supply chain is presented. The concepts are assessed within numerous examples such as production strategies in furniture, automotive, and aerospace industries. Additional case studies, Excel templates, tasks and video streams as part of an E-supplement enrich this chapter.

This chapter starts with an outline of a recent real-world location planning problem. It provides the analysis of different decision tasks in a typical location planning scenario and reveals the interactions between individual decision situations of the tasks. The generic decision task regarding which regions should be incorporated into a supply network is addressed. A further part is dedicated to the identification of explicit location proposals for those regions that contribute to supply chain cost efficiency. The multiple factor search for the right location for a facility in a region is addressed in the final section. The chapter is completed by the respective E-Supplement providing additional case studies, Excel templates, tasks and video streams.

This chapter addresses basic strategies for the configuration of physical distribution and transportation networks so that given supplying locations are physically connected with demanding locations. At the beginning, it introduces a case study to discuss the challenges related to the installation of transportation links. The next section suggests generic types of transportation network set-ups as a starting point for the setup of more sophisticated network layouts. Subsequently, the concept of shipment consolidation as the key approach to the realization of economies of scale in transportation is considered. Additionally, different transport network configuration objectives and their balancing are analysed, so that efficient and profitable network layouts can be set up. The incorporation of transport service providers (freight carriers) is discussed. Finally different case studies regarding the distribution network design are presented and the concepts, models and principles are discussed with the backup of numerous examples such as distribution and transportation strategies at global retailers. The chapter is accompanied by an E-Supplement providing additional case studies, Excel templates, tasks and video streams.

In this chapter, factory planning and process design principles and models are discussed. It starts with an introductory case-study considering factory planning issues at an e-car manufacturer. At the beginning, the role of factory planning in supply chain and operations management is discussed. Next, factory planning processes are presented. Subsequently, the role and methods of capacity planning are considered. Furthermore, options for process flow design are elaborated. Finally, lean production systems are presented and modern trends, e.g., Industry 4.0, are discussed. The chapter is accompanied by an E-Supplement providing additional case studies, Excel templates, tasks and video streams.

In this chapter, layout planning concepts are discussed. It starts with an introductory case-study considering layout planning at a distribution center for spare parts. At the beginning, the role of layout planning in supply chain and operations management is discussed. Next, layout planning concepts in manufacturing and logistics are presented. Finally, quantitative and qualitative methods of layout planning are discussed. The concepts are reinforced by examples for manufacturing and warehouse layouts.

In this chapter, demand forecasting methods are considered. At the beginning, the role of demand forecasting in supply chain and operations management is discussed. Next, the role of expert methods in forecasting is analysed and it is demonstrated how to apply statistical methods for forecasting. Subsequently, it is shown how to calculate the forecasts based on statistical methods, understand and apply the measures for forecast quality assessments. The chapter is enriched by an E-Supplement providing additional Excel templates, tasks and video streams.

In this chapter, the sales and operation planning (S&OP) concept is presented. It starts with an introductory case-study considering sales and operation planning at a petrochemistry company. At the beginning, different planning horizons and the role of aggregate planning are discussed. Afterwards, different options of matching demand and supply at an aggregated level are explained. Next, the rolling planning concept is introduced. Subsequently, the concept of the master production schedule (MPS) is presented. We learn how to apply linear programming methods to production planning. Finally, the principles of exploiting the bill-of-materials are discussed in order to learn how to compute dependent material requirements taking into account the lead time. This chapter is accompanied by an E-Supplement providing additional case studies, Excel templates, tasks and video streams.

In this chapter, inventory management principles are discussed. It starts with an introductory case-study considering different inventory management principles in automotive, electronics, and e-commerce branches. At the beginning, the trade-off among “service levels” and “costs” in inventory management is highlighted. Next, the role of inventory in the supply chain is analysed. Therefore, the ABC and XYZ analysis is introduced and the use of the EOQ/EPQ models for independent inventory demand is explained. Subsequently, it is shown how to compute a reorder point and how to calculate service levels and probabilistic inventory models. In the next part, the applicability of dynamic lot-sizing models is elaborated. Finally, the discussion and computation of the effects of inventory aggregation takes place leading to the explanation of the ATP/CTP concept. The chapter is accompanied by an E-Supplement providing additional case studies, Excel templates, tasks and video streams.

In this chapter, scheduling and routing principles are discussed. At the beginning, a typical case for operative decision making and mathematical graphs for the representation of decision situations in a network structure are introduced. Additionally, the first insights into the algorithmic processing of graph-data as the basic ingredient for decision making in network structures are provided. The consideration of complex restrictions during the deployment of a resource is discussed by means of the traveling salesman problem (TSP) in which the sequencing of operations to build a schedule for a resource is in the focus of the decision making. The integrated consideration of assignment and scheduling/sequencing decision problems under limited resource availability is addressed in the context of the capacitated vehicle routing problem (CVRP). Finally, a short introduction to the scheduling of the production machines is given. The chapter is completed by an E-Supplement providing additional case studies, Excel templates, tasks and video streams.