A supply chain includes supply, production, storage, distribution, and selling facilities that are connected by material, informational, and financial links. Since facilities are not necessarily connected in a serial fashion, despite its name, a supply chain describes a network of connected facilities. Supply chain management (SCM) includes the strategic design of this network and choice of its capacity; the tactical planning of this capacity and related management of production, inventory, and logistics activities; and the operational control of the flows of materials, information, and money and the stocks of physical goods in this network.
The goal of SCM is to maximize the economic value that can be generated by managing these decisions. Depending on the context, this may involve an objective of profit/margin maximization or cost minimization. Typically, economic value maximization is associated with matching the supply of products with its demand: excess supply is too costly and inadequate supply irritates customers. Information technology and systems, such as radio frequency identification tags, enterprise resource planning systems, and advanced planning and inventory optimization systems greatly facilitate this task. Increasingly, the concept of risk, arising from supply and/or demand uncertainty, has been attached to supply chains – either to quantify the risk of supply/demand mismatch, or the risk involved due to a potential disruption of the supply chain (due to natural or man-made factors). Flexibility and responsiveness are useful strategies and tactics to manage supply chain risk.
This course explores how firms can make better SCM strategic and tactical choices. The course includes the following units: (1) Inventory Planning (both single stage and multiple stages); (2) Coordination; (3) The Inventory-Order Interface; and (4) Network Design. Throughout, this course illustrates mathematical analysis and qualitative principles applied to real SCM challenges, that is, the tools of SCM, with an emphasis on approaches to increase the flexibility and responsiveness of a supply chain. A substantial part of the course will focus on discussing advanced multistage inventory planning practices embedded in modern SCM software based on managing inventory from a network, rather than single site, perspective, and the practical benefits from their adoption.
The aim of the course is to provide both strategic insights and tactical knowledge needed by supply chain consultants and managers. We seek both rigor and relevance. We will demonstrate that companies can use (and have used) the tools from this course to significantly enhance their competitiveness. The course material is thus of particular importance to students interested in management consulting and managerial careers.
The course format includes lectures, case discussions, analyses of successful supply chain management practices, and, depending on availability, practitioner guest lectures. The course learning objectives are to teach students how and when to implement the tools of SCM, and to provide them with rigorous and practically relevant SCM education from the point of view of a strategic, high-level manager or consultant. (2/13-NS)
Lecture: 100min/wk and Recitation: 50min/wk