1116 1 inventory management2863
TRANSCRIPT
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11/16 1 Inventory Management & Supply Chain
Supply ChainManagement
Chapter 11
9thEdition
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Supply Chain Management
Supply Chain:THE SEQUENCE OF ORGANIZATIONS
their facilities, functions, and activities
THAT ARE INVOLVED IN PRODUCING
AND DELIVERING A PRODUCT OR
SERVICE
Sometimes referred to as value chains
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Warehouses Factories
Processing centers
Distribution centers
Retail outlets
Offices
Facilities
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Functions and Activities
Forecasting Purchasing
Inventory management
Information management
Quality assurance
Scheduling
Production and delivery
Customer service
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Typical Supply Chain
MANUFACTURING
Supplier
Supplier
Supplier
Storage
}Mfg. Storage Dist. Retailer Customer
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Supplier
Supplier}Storage Service Customer
Typical Supply ChainService
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1. Improve operations2. Increasing levels of outsourcing
3. Increasing transportation costs
4. Competitive pressures
5. Increasing globalization
6. Increasing importance of e-
commerce
7. Complexity of supply chains
8. Manage inventories
Need for Supply Chain Management
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Bullwhip Effect
Final CustomerInitial
Supplier
Demand
Inventory oscillations become progressively
larger looking backward through the supply chain
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Benefits of Supply Chain Management
Organization Benefit
Campbell Soup Doubled inventory turnover rate
Hewlett-Packard Cut supply costs 75%
Sport Obermeyer Doubled profits and increased sales 60%
National Bicycle Increased market share from 5% to 29%
Wal-Mart Largest and most profitable retailer in the
world
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Benefits of Supply Chain Management
Lower inventories Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty
Integrates separate organizations into
a cohesive operating system
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Global Supply Chains
Increasing more complex
Language
Culture
Currency fluctuations Political
Transportation costs
Local capabilities Finance and economics
Environmental
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Strategic or Operational
Two types of decisions in supply chain
management
Strategic design and policy
Operational day-today activities
Major decisions areas
Location
Production Inventory
Distribution
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Logistics Refers to the movement of materials
and information within a facility and to
incoming and outgoing shipments of
goods and materials in a supply chain
Logistics
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Materials MovementFigure 11.4
RECEIVING
Storage
Work
center
Work center Work center
Storage
Work
center
Storage
Shipping
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Management uses DRP (Distr ibut ionrequ irements plann ing)to plan and
coordinate:
Transportation Warehousing
Workers
Equipment Financial flows
Uses of DRP
11/16 16 I M & S l Ch i
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E-Bus iness: the use of electronic
technology to facilitate business
transactions
Applications include
Internet buying and selling
E-mail
Order and shipment tracking
Electronic data interchange
E-Business
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Companies can: Have a global presence
Improve competitiveness and quality
Analyze customer interests Collect detailed information
Shorten supply chain response times
Realize substantial cost savings
Create virtual companies
Level the playing field for smallcompanies
Advantages E-Business
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Reverse Logistics
Reverse log ist icsthe backward flow of
goods returned to the supply chain
Processing returned goods
Sorting, examining/testing, restocking,
repairing
Reconditioning, recycling, disposing
Gatekeepingscreening goods to prevent
incorrect acceptance of goods
Avo idancefinding ways to minimize the
number of items that are returned
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Effective Supply Chain
Requires linking the market, distribution
channels processes, and suppliers
Supply chain should enable members to:
Share forecasts
Determine the status of orders in real time
Access inventory data of partners
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Successful Supply Chain
Trust among trading partners Effective communications
Supply chain visibility
Event-management capability
The ability to detect and respond to
unplanned events
Performance metrics
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RFID Technology
Used to track goods in supply chain
RFID tag attached to object
Similar to bar codes but uses radio
frequency to transmit product information
to receiver
RFID eliminates need for manual counting
and bar code scanning
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1. Develop strategic objectives andtactics
2. Integrate and coordinate activities in
the internal supply chain
3. Coordinate activities with suppliers
with customers
4. Coordinate planning and execution
across the supply chain
5. Form strategic partnerships
Creating an Effective Supply Chain
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Supply Chain Performance Drivers
1. Quality2. Cost
3. Flexibility
4. Velocity
5. Customer service
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Velocity
Inventory velocity The rate at which inventory(material)
goes through the supply chain
Information velocity
The rate at which information is
communicated in a supply chain
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Purchasingis responsible forobtaining the materials, parts, and
supplies and services needed to
produce a product or provide a
service.
Purchasing cyc le: Series of steps that
begin with a request for purchase and
end with notification of shipment
received in satisfactory condition.
Purchasing
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Identifying sources of supply Negotiating contracts
Maintaining a database of suppliers
Obtaining goods and services
Managing supplies
Duties of Purchasing
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Inventory Management & Supply Chain
Purchasing Cycle
1. Requisition received2. Supplier selected
3. Order is placed
4. Monitor orders
5. Receive orders
Purchasing
Legal
AccountingOperations
Data
process-ing
Design
Receiving
Suppliers
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Inventory Management & Supply Chain
Quality and quality assurance Flexibility
Location
Price Product or service changes
Reputation and financial stability
Lead times and on-time delivery
Other accounts
Factors in Choosing a Supplier