Requirements

• All responses in the discussion board must be written in your own words demonstrating your understanding and analysis of the topics being discussed.
• Merely agreeing with another student’s answer is not enough, explain WHY you agree or disagree.
• In all your responses assume that the reader has no idea what the topic is about.

Discussion Case

Case 1.1 Lehigh Valley Transport and Logistics Service (LVTLS) PG. 24

Complete questions #1 and #2.Discussion Case

Text Book

Title: Supply Chain Management: A Logistics Perspective

ISBN-13: 9781305888692

ISBN-10: 1305859979

Author: John J. Coyle; C. John Langley; Robert A. Novack; Brian Gibson

Edition: 10

Binding: eBook

Publisher: South-Western College Pub

CHAPTER1

Supply Chain Management:

An Overview

Supply Chain Management: A Logistics Perspective (10e)
Coyle, Langley, Novack, and Gibson
© 2016 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Outline
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Five major external forces
Development of supply chain management concept
Integrated supply chain characteristics
Supply chain flows
Major supply chain issues
2

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3
Leading Retailers (Sales Year)
2000 2010 2014
1. Wal-Mart 1. Wal-Mart 1. Wal-Mart
2. Kroger 2. Kroger 2. Kroger
3. The Home Depot 3. Target 3. Costco
4. Sears, Roebuck & Company 4. Walgreen 4. The Home Depot
5. Kmart 5. The Home Depot 5. Walgreen
6. Albertson’s 6. Costco 6. Target
7. Target 7. CVS Caremark 7. CVS Caremark
8. JC Penny 8. Lowe’s 8. Lowe’s
9. Costco 9. Best Buy 9. Amazon.com
10. Safeway 10. Sears Holdings 10. Safeway

Source: Table 1.1

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
4
Five Major External Forces

1
2
3
4
5
Government
Policy &
regulation
Organizational
consolidation
Globalization
Technology
Empowered
consumer

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
5
Five Major External Forces – Globalization
Inventory management challenges
Faster duplicability of products & services
Faster reduction in demand
Requirement of new pricing policies
Higher risk of obsolescence
Longer and more complex supply chain challenges
Growth and increased scope of outsourcing

Images courtesy of Daily Lending News
Globalization creates more economic and political risk, shorter product life cycle, and the blurring of traditional organizational boundaries.

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
Five Major External Forces – Technology
The Internet. “Connected” 24/7
Images courtesy of National Conference of State Legislatures
Social networks. Impact on customer demand and the speed of information transfers
The world’s “knowledge pool” connection. Opportunities for collaboration in supply chains
Technology is a facilitator of internal process and supply chain transformation. It is also a major force in changing the dynamics of the marketplace.

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7
Five Major External Forces – Organization Consolidation and Power Shifts
During the 1980s and especially the 1990s, economic power and the driving force in supply chains shift from product manufacturers to the retail end of the supply chain.
More collaboration among organizations in supply chains
Win-win, improved services such as:
Scheduled deliveries
“Rainbow” pallets
Advance shipments notices (ASNs) shrink-wrapped pallets
Sharing of point-of-sale data to mitigate “bullwhip effect”

Images courtesy of Community Services and Health Industry Skills Council (Australia)

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
8
Five Major External Forces –
Empowered Consumers
Consumers are empowered by exponentially expanded access to product sources and related information and increased buying power due to high income levels.
Increased pressures on supply chain due to increased demands at the retail level in terms of:
Competitive prices
High quality in products and services
Tailored or customized products
Convenience and responsiveness – 24/7 availability with a minimum of wait time
Flexibility – Omnichannel distribution strategies

Images courtesy of Forrester Research

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
9
Five Major External Forces –
Government Policy and Regulation
More competitive environment is a result of the deregulation of several important sectors in the United States occurred in the 1980s and 1990s.
The transportation industry. Expanded services beyond transportation, with service providers’ role evolving to outsourcing partners
Images courtesy of Liberty Unyielding
The financial sector. More flexible and responsive to customer needs, making businesses more cognizant of supply chain management impact on efficiency and cash flow
The communications industry. A component of the information revolution, leading to dramatic improvements and opportunities in logistics and supply chains

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
10
Evolution of Supply Chain Management Concept
Demand forecasting
Purchasing
Requirements planning
Production planning
Manufacturing inventory
Warehousing
Material handling
Packaging
Finished goods inventory
Distribution planning
Order processing
Transportation
Customer services
Strategic planning
Information services
Marketing/Sales
Finance
Activity fragmentation to 1960s
Activity integration 1980s
1990s +
Purchasing/
Materials Management
Physical Distribution
Integrated Logistics
Supply Chain Management

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11
Integrated Supply Chain – Basics
SCM is the art and science of integrating the flows of products, information and financials through the entire supply pipeline from the supplier’s supplier to the customer’s customer.
Suppliers
Contracted Manufacturers
Manufacturers
Wholesalers/ Distributors
Retailers/ Customers
Product/Services Flow
Information Flow
Finance /Cash Flow

Demand Flow

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Integrated Supply Chain – Network

Retail Store
Retailer Warehouse
Manufacturing Warehouse
Manufacturing Plant
Wholesaler Warehouse
Raw Material Supplier

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
Supply Chain Flows
PRODUCT FLOW
Physical movement of goods and materials
INFORMATION FLOW
Enabling physical flow of products
Decision making
Supply chain collaborations
CASH FLOW
Management of working capital
DEMAND FLOW
Detect and understand demand signals
Synchronize demand vs. supply

Source: Figure 1.8

Major Supply Chain Issues
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
14
Cost and
value
Information
Organizational relationships
Inventory deployment
Complexity
Technology
Performance measurement
Supply chain security
Transportation management
Talent management
3
5
7
8
10
11
4
6
9
Supply chain network
1
2

Major Supply Chain Issues (continued)
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15
Images courtesy of (left to right) Elemica, The Mudd Partnership, Qstrock Inventory

The challenges
Network system (facilities and supporting transportation services) must be capable and flexible to respond and change with market dynamics.
Supply Chain Network
The challenges
Increased requirements in simplifying and continually evaluating areas of complexity in the various aspects of supply chains
Complexity
The challenges
Increased requirements for coordination or integration to reduce inventory levels on horizontal (single-firm) and vertical (multiple-firms) levels in the supply chain.
Inventory Deployment

Major Supply Chain Issues (continued)
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16
Images courtesy of (left to right) TTGT Media, in-sourcing, The Billing Project.

The challenges
The sharing of information along the supply chain
The discipline to ensure the integrity of the vast amount of data collected and stored
Information
The challenges
The prevention of sub-optimization.
Cost and Value
The challenges
Internal collaboration (marketing, sales, operations, finance, etc.)
External collaboration (vendors, customers, transportation companies, 3PLs)
Organizational Relationships

Major Supply Chain Issues (continued)
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
17
Images courtesy of (left to right) FCW, Pixabay, The FSL Group

The challenges
Connecting lower-level metrics in an organization directly to the high-level performance measures of the organization and the supply chain
Performance Measurement
The challenges
Evaluate, strategically plan, and successfully implement the technology to make the improvements desired
Technology
The challenges
Transport “perfect storm.” Transport market changes; driver shortages; fuel costs; infrastructure constraints; and regulatory changes
Transportation Management

Major Supply Chain Issues (continued)
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
18
Images courtesy of (left to right) One Source Technology, MediaTec Publishing

The challenges
Risk of disruptions, vulnerability, and exposure to terroristic threats exacerbated by distance and complexity in global supply chain
Supply chain security
The challenges
Attract, develop, and maintain the appropriate pool of talent from entry level to executive level
Talent management

Summary
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
19
The rate of change has been driven by a set of external forces including globalization, technology, organizational consolidation and shifts in power in supply chains, empowered consumers, and government policy and regulations.
Supply chains are extended enterprises which require managing four flows—products, information, financials (cash), and demand on a collaborative basis.
The global supply chains of the best companies must be adaptive, resilient, and responsive to meet the challenges of the global economy and develop mitigating strategies for disruptive forces.

CHAPTER2

Global Dimensions of Supply Chains

Supply Chain Management: A Logistics Perspective (10e)
Coyle, Langley, Novack, and Gibson
© 2016 Cengage Learning. All Rights Reserved.
May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Outline
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Rationale for global trade and commerce
Contributing factors for global commerce and supply chain flows
Supply chains in global economy
Micro perspective of global supply chains
Supply chain security and role of ports
2

Rationale for Global Trade
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3

Absolute advantage

Lower cost and/or access to items not available locally

Comparative advantage

Differences in the cost of producing products in different countries

Contributing Factors for Global Flows and Trade

Contributing Factors for Global Flows and Trade
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5

2
1
3
4
5

Population size and distribution
1
Urbanization
2
Land and resources
3
Technology and information
4
Globalized economy
5

Population = Labor
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6
Rank Country 2000 2010 2015 2050
Population Population Population Expected Pop.
1 China 1,268,853,362 1,330,141,295 1,361,512,535 1,303,723,332
2 India 1,004,124,224 1,173,108,018 1,251,695,584 1,656,553,632
3 United States 282,338,631 310,232,863 321,362,789 439,010,253
4 Indonesia 213,829,469 242,968,342 255,993,674 313,020,847
5 Brazil 176,319,621 201,103,330 204,259,812 260,692,493
6 Pakistan 146,404,914 184,404,791 199,085,847 276,428,758
7 Nigeria 123,178,818 152,217,341 181,562,056 264,262,405
8 Bangladesh 130,406,594 156,118,464 168,957,745 233,587,279
9 Russia 146,709,971 139,390,205 142,423,773 109,187,353
10 Japan 126,729,223 126,804,433 126,919,659 93,673,826
TOP TEN Countries 3,618,894,827 4,016,489,082 4,213,773,474 4,950,140,178
Rest of the World 2,466,012,769 2,829,120,878 3,050,850,319 4,306,202,522
TOTAL World Population 6,084,907,596 6,845,609,960 7,264,623,793 9,256,342,700

Source: Table 2.1

Population = Labor (continued)
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7
Source: Figure 2.1

© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
8
Urbanization
The rise of “megacities” – By 2030, 60% of the world’s population will live in urban areas (vs. 47% in 2000)
Change most profound in the less and least developed countries of the world – Urban sustainability challenges
Image courtesy of Gijsbert Koren

Land and Resources
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9
Critical role of technology in mitigating resource scarcity
Image courtesy (left to right) of NRCS (USDA), U.S. Chamber, Agricultural Law blog, and Glacial Energy

Crop & forest Land

Water

Food

Energy

Technology and Information
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10
Technology as an “internal” change agent
Enhanced efficiency, effectiveness, and ability of an organization to compete in the global marketplace
Technology has two important dimensions.
Technology as an “external” change agent
New forms of competition or new business models (e.g. omnichannel distribution, global outsourcing)

Globalized Economy
Export-Trade Flows of Merchandise (2014)
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11
Source: Figure 2.2

Globalized Economy
Import-Trade Flows of Merchandise (2014)
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
12
Source: Figure 2.3

Globalized Economy
U.S. Total Exports and Top Export Partners (2014)
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
13
Source: Table 2.4
Rank Export Partner Total Merchandise (Thousands USD)
World 1,620,531,899,958
1 Canada 312,420,805,048
2 Mexico 240,248,662,812
3 China 123,675,667,401
4 Japan 66,827,397,507
5 United Kingdom 53,823,429,587
6 Germany 49,363,335,254
7 South Korea 44,471,327,831
8 Netherlands 43,075,167,531
9 Brazil 42,429,393,191
10 Hong Kong 40,857,860,576
11 Belgium 34,789,502,310
12 France 31,300,777,142

Rank Export Partner Total Merchandise (Thousands USD)
13 Singapore 30,237,316,176
14 Taiwan 26,670,195,718
15 Australia 26,581,669,437
16 Switzerland 22,175,920,059
17 United Arab Emirates 22,069,272,402
18 India 21,607,502,707
19 Colombia 20,106,608,178
20 Saudi Arabia 18,704,915,502
21 Italy 16,968,200,542
22 Chile 16,514,555,095
23 Israel 15,083,044,959
24 Malaysia 13,068,413,088
25 Thailand 11,809,766,363

Globalized Economy
U.S. Total Imports and Top Import Partners (2014)
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14
Source: Table 2.5
Rank Import Partner Total Merchandise (Thousands USD)
World 2,347,685,228,534
1 China 466,754,455,239
2 Canada 347,797,986,092
3 Mexico 294,074,053,415
4 Japan 134,003,716,530
5 Germany 123,259,613,666
6 South Korea 69,518,424,385
7 United Kingdom 54,392,304,698
8 Saudi Arabia 47,040,791,358
9 France 46,873,955,079
10 India 45,244,019,937
11 Italy 42,115,177,018
12 Taiwan 40,581,485,120

Rank Import Partner Total Merchandise (Thousands USD)
13 Ireland 33,955,621,192
14 Switzerland 31,190,602,048
15 Viet Nam 30,588,511,328
16 Brazil 30,536,551,551
17 Malaysia 30,420,378,588
18 Venezuela 30,219,171,644
19 Thailand 27,122,648,583
20 Russian Federation 23,658,083,164
21 Israel 22,962,203,403
22 Belgium 20,885,204,358
23 Netherlands 20,818,228,944
24 Indonesia 19,360,892,962
25 Colombia 18,299,722,680

Supply Chain in Global Economy

Supply Chain in Global Economy
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16

Global trade growth has been fueled by free trade agreements (FTAs) that lift most tariff, quota, and fee/tax limitations on trade.
The best supply chains compete very successfully on a national, regional, and global basis.
Bilateral
FTAs

Regional
Bi-lateral agreements are between two nations
US currently in 20 bi-lateral FTAs
Regional trade agreements involve 3 or more nations
US currently involved in:
Free Trade Area of Americas
Middle East Free Trade Initiatives
Enterprise for ASEAN Initiatives
North American Free Trade Agreement (NAFTA)

Supply Chain in Global Economy
NAFTA
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17
NAFTA establishes free trade among Canada, the United States, and Mexico.
NAFTA’s goals involve making structural changes to operate a borderless logistics network in North America.
Image courtesy of PanCanadian Immigration Law Group

Micro Perspective Of Global Supply Chains
Global Markets and Strategy

Global Markets and Strategy
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19
Success in the global market-place requires development of a cohesive set of strategies including product development, technology, marketing, manufacturing, and supply chains.
Supply chain perspective
Customer service perspective

Global Markets and Strategy
Supply Chain Perspective
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20

Strategically sourcing materials and components worldwide
Selecting global locations for key supply depots and DCs
Evaluating transportation alternatives and channel intermediaries
Understanding governmental influences on global SC flows
Examining opportunities for collaboration with 3PLs or 4PLs

1

2
3
4
5

Global Markets and Strategy
Customer Service Perspective
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21

Standardization to reduce complexity must maintain some customization.
Global competition often reduces the product life cycle.
Organizational structures and business models change with more outsourcing.
Globalization introduces more volatility and complexity.

1

2
3
4

Supply Chain Security and Role of Ports

Supply Chain Security
A Balancing Act
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23

Security
Efficient Flows
Security Measures
The Trade Act of 2002
The U.S. Maritime Transportation Security Act of 2002
The Customs Trade Partnership Against Terrorism (C-TPAT)
Global Trade Flows
Electronic filing of cargo information
Standards for container seals and locks, cargo tracking, identification, and screening systems for ocean containers
A “green lane”

Role of Ports
Global Supply Chain and Security
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24

Over 90 percent of U.S. international trade passes through ports.
Ports are bases of operation to deploy troops and equipment.
Ports are a critical part of global supply chains and a major focus for global security.

Summary
Trade flows between the United States and other countries have grown considerably, resulting in global supply chains becoming increasingly important.
The increased complexity and competiveness of a global economy have resulted in shorter product life cycles, new forms of competition, and new business models.
Success in the global marketplace requires ongoing development of a cohesive set of strategies that has implications to both supply chains and customer services.
Companies individually, jointly, and in cooperation with the government are actively involved in supply chain security.
With increasing regional economic integration, NAFTA has helped to foster trade in North America.