Supply-Chain-Engineering

The term Supply Chain Engineering ( SCE) describes a method for conceptual design of time and realization of logistic and production-oriented supply chains ( supply chains ) within a company and across company boundaries. Not only individual elements of a supply chain are considered, but takes into account all the necessary processes holistically. Essential to this approach is especially its integrated approach with regard to the parts of strategy, technology, and information technology ( IT). The engineering embossing of this approach is expressed not only in content but also in its naming.

The concept of supply chain engineering, very few standard works have been published due to his young age so far. Subsequent term declaration refers primarily to the book published in July 2010 basic book " Supply Chain Engineering - Methodology of integrated planning in logistics" edited by Dr. Joachim Miebach and Dominik Bühring which SCE is defined as an independent and comprehensive method in the design of supply chains.

Basics and definition

The method of SCE moves along the classical definition of a value-added supply chain within and between firms and markets. This SCE designed the network structures, processes and facilities along the supply chain so that strategy, technology and IT are not considered separately, but in all planning steps and should be respected equally integrated. Therefore, solutions for the design of supply chains with the SCE approach are regarded as a whole and are always characterized engineering and science. In this case, all actions focus in the context of a SCE process to an ideal possible supply chain design is factored into the cost optimization, the proper use of technology and IT, and the training and integration of employees, both in production as well as in purely logistical facilities.

For the German-speaking countries, this approach is, inter alia, been defined by Dr. Miebach. The work in July 2010, published by Gabler -Verlag "Supply Chain Engineering - Methods of integrated planning in logistics" is so far is the only work which describes SCE as a holistic and clearly defined method. According to the publishers, experience has shown that neither coined by strategy consultants top-down approach, nor the bottom- up approach of most engineering leads as singular perspectives on satisfactory results in the most optimal design of supply chains.

Also employs the concept of SCE have the French author Alexandre Dolgui and Jean Marie Proth in her book " Supply Chain Engineering - Useful Methods and Techniques" ( Springer -Verlag London Limited, 2010). The authors SCE but not as a stand-alone method, but subsumed under this term several individual elements of the planning and execution of supply chains. My focus is more on production processes rather than on a holistic view of supply chains.

Another driver of the term, the department is "Supply Chain Engineering " of the Fraunhofer Institute. In this case, however, the Fraunhofer Institute SCE sees rather than named. The methodology of this department continues to work with the narrower concepts Supply chain management.

Demarcation to Supply Chain Management ( SCM)

The SCE approach as defined by Dr. Miebach, sees itself as the offshore entity and the basis for an efficient and effective supply chain management. While SCM is a definition of the Council of Supply Chain Management Professionals ( CSCMP ) rather than strategic and operational management tool provides already installed supply chains, is where the SCE approach to the basic, often first-time configuration or optimization of supply chains and integrated in the sequence Supply chain management as a subsystem to control the supply chain.

Common goals through the coordination and integration of processes along a supply chain with a view to cross-functional business processes and value-added approach are therefore inherent objective component of the SCE.

SCE - top-down and bottom-up

The basic assumption of the miebach'schen SCE concept based on the recognition that neither the so-called top-down approach, nor the bottom- up approach can represent satisfactory results in the design of supply chains as a singular methods.

The top-down strategic approach initially think after over networks, strategies, supply rhythms and other economic variables. Based on this result is a best-practice scenario that finally predefined all facilities and technical details from top to bottom basic organizational structures and processes, however. Typical of this approach is especially important for strategy consulting firms.

In the technology-oriented bottom-up method that is often used by engineering and operation planners, cost and quality problems along the supply chain are considered almost exclusively technical. This eventually resulted in proposals for installations, storage techniques and management organizations. A consultation with the strategic overview is often done after that time or not at all.

According to the SCE approach can contribute to the business success of a company's optimal supply chain only if their structure is designed holistically from scratch both from a strategic as well as from a technical point of view. The supply chain has also definition sovereignty over economic variables such as the bound in the company liquidity ( inventories ), customer satisfaction (prompt delivery ), investment in equipment and IT systems, such as through technology -and process -dependent variables, such as costs for personnel and transportation or quality of supply. The individual elements of a supply chain therefore influence each other and can not be separated.

Methodological approaches of the SCE

The methodology of the SCE is divided into five different parts of a planning cycle:

• Key Performance Indicators (KPI ) and targets
• Network strategy
• Process planning
• Technology and Operations
• Optimization of the overall system

In principle, an evaluation of the respective actual state of a supply is necessary, as well as the development of different scenarios based on the quantified model calculation. As the basis of a conception by this method no coarse benchmark tables are used, but to the particular situation and the particular location matched data.

Here, the SCE approach assumes that there is no computational model that generated from all possible network strategies, processes and techniques, the ideal solution of a case automatically because of the expense of this would be too large.

Along the planning cycles progressively unfavorable solutions are eventually excluded, but others further specified and the target guided optimization then questioned continuous quantification.

Important tools of the SCE are knowledge management databases, simulations and emulations, IT tools for the detailed calculations, implementation experience in program and project management, and last but not least, the motivation and experience inserted specialists.

The planning cycle

I. Key performance indicators as targets

For the design of logistics network from the perspective of the SCE applies: What can not be measured, can not even make. Therefore, all the requirements of a supply chain in the form of so-called Key Performance Indicators must be quantified as an economic dish sizes. Looking back flow on the integration of top-down and bottom- up approach "from above" the company's strategy with purchasing, production and distribution strategy into the system while be specified performance and cost data "from below". These relate, for example, are to achieve throughput times or refund amounts.

The limiting definition of individual cost elements is at this point not yet been carried out, since this can result in necessary changes, for example, by the displacement of storage and transport costs.

II network strategy

This part of the SCE planning cycle focuses on locations, production networks, collaborations and suppliers as well as the question of centralization and specialization and other influences on the structure of a network.

New approaches from several location options are formed and quantifies the alternative strategies, and compared with the specified target KPI. This is done for example by simulating the flow of goods.

III. planning processes

Within this step first processes are considered that take place at the enterprise level. Depicting these processes are in the Enterprise Resource Planning system (ERP system ). It is in detail the requirements and resource planning, batch size and Einlastungsplanung, the strategy of supplies along the storage levels in the push or pull method, inventory planning and the overall software architecture.

At this level a quantification of the individual processes is necessary in order to arrive at an ideal solution as possible. The use of simulation for decision-making is also in the process of planning an adequate instrument.

IV techniques and operations

In the next step of the planning cycle processes and systems are considered at the operational level. This includes conveyor and storage systems, systems for picking and packing, loading equipment, warehouse management systems, route planning, staff scheduling and safety issues.

Since most manufacturers offer only data for own solutions, requires the SCE methodology at this point a further quantification of possible alternatives. Accessed on is mostly as many comparative projects that are best prepared in the form of databases. Already collected empirical data must be queried. Must also be available performance data, such as seasons, picking performance, error rates or transportation services.

V. optimizing the overall system

The fifth and final step of the SCE planning cycle is the optimization of the overall system. The over the previous three stages developed overall system is compared with the KPI system from step 1 of the planning cycle here. It is queried whether the proposed system meets the requirements, they may even exceeds, or whether the alternative found to be revised again before the planned supply chain system can go into execution.

Reasons for re- run of the planning cycle may be surprising deviations, risk factors, not yet sufficiently reliable quantifications or deviation from benchmarks or tolerances that could be uncovered only during the first pass.

Furthermore, questions the robustness of the chosen alternative in this step and tested along changing factors in the product or the market efficiency.

This methodology can ultimately also result in that the targets set were perhaps too ambitious.