supply chain management

Views:
 
     
 

Presentation Description

No description available.

Comments

Presentation Transcript

SUPPLY CHAIN MANAGEMENT:

SUPPLY CHAIN MANAGEMENT management of activities that procure materials & services, transforming them into intermediate goods & final products ,& delivering the products through a distribution system.

The strategic importance of Supply chain:

The strategic importance of Supply chain Low-cost strategy Response strategy Differentiation strategy Supplier’s goal Supply demand at lowest possible cost Respond quickly to changing requirement and demand to minimize stock outs . Share market research; jointly develop products and options . Primary selection criteria Select primarily for cost Select primarily for capacity, speed, and flexibility Select primarily for product development skills Process Characteristics Maintain high average utilization Invest in excess capacity and flexible processes Modular processes that lend themselves to mass customization Inventory characteristics Minimize inventory throughout the chain to hold down cost Develop responsive system, worth buffer stocks position ensure supply Minimize inventory in the chain to void obsolescence Lead-time Characteristics Shorten lead time as long as it does not increase costs Invest aggressively to reduce production lead time Invest aggressively to reduce development lead time Product-design characteristics Maximize performance and minimize cost Use product designs that lead low setup time and rapid production ramp-up Invest design to postpone product differentiation fro as long as possible

Global Supply Chain Issues:

Global Supply Chain Issues Supply chains in a global environment must be: Flexible enough to react to sudden changes in part availability, distribution or shipping channels, import duties and currency rates. Able to use t he latest computer & transmission technologies to schedule &manage the shipment of parts in & finished products out. Stuffed with local specialists to handle duties , trade, freight, custom, &political issues. The objective of global supply chain mgt. is to build a chain of suppliers that focus on maximizing value to the ultimate customers.

Supply Chain Economics:

Supply Chain Economics Make-or- buy decisions- choosing between producing a component or service in-house or purchasing it from an outside source. Reasons for making Reasons for buying 1.Maintain core competence 1. Frees management to deal with it’s primary business 2.Lower production cost 2. Lower acquisition cost 3. Unsuitable suppliers 3. Preserve supplier commitment 4 .Assure adequate supply( quantity or delivery) 4. Obtain technical or management ability 5. Utilize surplus labor or facilities and make marginal contribution 5. Inadequate capacity 6. Obtain desired quality 6. Reduce inventory costs 7. Remove supplier collusion 7. Ensure alternative sources 8. Obtain unique item that would entail a prohibitive commitment for a supplier 8. Inadequate managerial or technical resources 9. Protect personnel from layoff 9. Reciprocity 10. Protect proprietary design or quality 11. Increase or maintain size of the company( mgt.preference ) 10. Item is protected by a patent or trade secret

Outsourcing – transferring a firms activities that have traditionally been internal to external suppliers. Electronic Data Systems(EDS)-provides information technology outsourcing for many firms. Automatic Data Processing (ADP)- provides payroll services for thousand of firms. :

O utsourcing – transferring a firms activities that have traditionally been internal to external suppliers. Electronic Data Systems(EDS)-provides information technology outsourcing for many firms. Automatic Data Processing (ADP)- provides payroll services for thousand of firms.

Supply chain strategies:

Supply chain strategies Many Suppliers - the supplier respond to the demands & specifications of a “request for quotation” with the other usually going to the low bidder. -this approach holds the supplier responsible for maintaining the necessary technology , expertise, & forecasting abilities, as well as cost, quality &delivery competencies . Few Suppliers- implies that rather than looking for short-term attributes , such as low cost, a buyer is better off forming a long-term relationships with a few dedicated suppliers. Vertical Integration- developing the ability to produce goods or services previously purchased or actually buying a supplier or distributor 2 types of VI: 1.Backward integration- suggest firms to purchase its suppliers. 2.Forward integration-suggests that manufacturer of components make the finished product. VI can yield : cost reduction, quality adherence, timely delivery.

4. Keiretsu Networks- a Japanese term to describe suppliers who become part of a company coalition 5. Virtual Companies- companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies. Advantage of VC: include specializes mgt expertise , low capital investment, flexibility &speed w/c results to efficiency. Traditional example of VO: apparel business Contemporary example of VO: semiconductor industry.:

4. Keiretsu Networks- a Japanese term to describe suppliers who become part of a company coalition 5. Virtual Companies- companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies. Advantage of VC : include specializes mgt expertise , low capital investment, flexibility &speed w/c results to efficiency. Traditional example of VO: apparel business Contemporary example of VO: semiconductor industry.

Managing the supply chain:

Managing the supply chain Mutual Agreement on goals Trust – critical to an effective &efficient supply chain . Compatible Organizational Cultures

Issues in an integrated supply chain:

Issues in an integrated supply chain Local optimization Incentives (sales incentives, quantity discounts, quotas & promotions) Large lots Bullwhip effect-the increasing fluctuation in orders that often occurs as orders move through the supply chain.

Opportunities in an integrated supply chain:

Opportunities in an integrated supply chain Accurate Pull Data Pull data-accurate sales data that initiates transactions to “pull” product through the supply chain. Lot size reduction- done by aggressive managements Single stage control of replenishment- fixing responsibility for monitoring & managing inventory for the retailer. Control maybe in the hands of: A sophisticated retailer who understands demand patterns. A distributor who manages the inventory for a particular distribution area. A manufacturer that has a well-managed distribution system, such as Procter & gamble. 4 Vendor Managed Inventory- supplier maintains material for the buyer, often delivering directly to the buyer’s using department. Postponement - delaying any modifications or customization to the product as long as possible in the production process. Channel Assembly- postpones final assembly of a product so the distribution can assembly it . Drop shipping – shipping directly from the supplier to the end consumer, rather than from the seller ,saving both time and reshipping costs. Blanket orders - a long term purchase commitment to a supplier for items that are to be delivered against short term releases to ship Standardization- reducing the number of variations in materials & component as an aid to cost reduction . Electronic ordering & funds transfer- reduces paper transaction .

Internet purchasing (e-procurement):

Internet purchasing (e-procurement ) Order releases communicated over the internet or approved vendor catalogs available on the internet for use by employees of the purchasing firm. VENDOR SELECTION- a decision regarding from whom to buy goods or services . 3 stage process : Vendor evaluation – finding potential vendor & determining the likelihood of their becoming good suppliers . Vendor development- may include everything from training to engineering & production help, to procedures for information transfer. Negotiations - focus on quality, delivery, payment and cost. 3 classic type of negotiations strategies: 1.Cost-based price model- requires that the suppliers open it’s books to the purchaser. 2. Market-based price model- price is based on a published auction, or index price. 3. Competitive Bidding- the typical policy in many firms for the majority of their purchases.

Logistics Management:

Logistics Management An approach that seeks efficiency of operations through the integration of all material acquisition ,movement, storage activities. Distribution System: Trucking Railroads Airfreight Waterways Pipelines Cost of shipping alternatives – the longer a product is in transit, the longer the firm has it’s money invested. Faster shipping is more expensive than slow shipping.

authorStream Live Help