Slide 1BUSINESS PLUG-IN B8
Supply Chain Management
List and describe the four drivers of supply chain management
Explain supply chain management strategies focused on efficiency
Explain supply chain management strategies focused on effectiveness
Summarize the future of supply chain management
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INTRODUCTION
Supply chain – consists of all parties involved, directly or indirectly, in the procurement of a product or raw material
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Facilities
Inventory
Transportation
Information
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FACILITIES DRIVER
Facility – processes or transforms inventory into another product, or it stores the inventory before shipping it to the next facility
Three primary facilities components
Location
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Capacity
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FACILITIES 3:
Operational Design
Operational design efficiency – product focus design allows the facility to become highly efficient at producing one single product, increasing efficiency
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Inventory – offsets discrepancies between supply and demand
Inventory management and control software – provides control and visibility to the status of individual items maintained in inventory
Two primary inventory components
INVENTORY 1:
Cycle Inventory
Cycle inventory – the average amount of inventory held to satisfy customer demands between inventory deliveries
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INVENTORY 2:
Safety Inventory
Safety inventory – extra inventory held in the event demand exceeds supply
Safety inventory efficiency – holding small amounts of safety inventory
Safety inventory effectiveness – holding large amounts of safety inventory
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Transportation – moves inventories between the different stages in the supply chain
Two primary inventory components
Method of Transportation
Global inventory management system – provides the ability to locate, track, and predict the movement of every component or material anywhere upstream or downstream in the supply chain
Method of transportation efficiency
Method of transportation effectiveness
TRANSPORTATION 2: Transportation Route
Transportation planning software – tracks and analyzes the movement of materials and products to ensure the delivery of materials and finished goods at the right time, the right place, and the lowest cost
Distribution management software – coordinates the process of transporting materials from a manufacturer to distribution centers to the final customer
Transportation route efficiency
Transportation route effectiveness
INFORMATION DRIVER
Information – an organization must decide how and what information it wants to share with its supply chain partners
Two primary information components
INFORMATION 1:
Information Sharing
Information sharing efficiency – freely share lots of information to increase the speed and decrease the costs of supply chain processing
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Pull information strategy (efficiency) – supply chain partners are responsible for pulling all relevant information
Pull technology – pulls information
Push technology – sends information
Wal-Mart’s supply chain management strategy emphasizes efficiency, but also maintains adequate levels of effectiveness
Facilities focus – Efficiency
Inventory focus – Efficiency
Transportation focus – Effectiveness
Information focus - Efficiency
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Selling chain management
Radio Frequency Identification (RFID)
Radio frequency identification (RFID) - use active or passive tags in the form of chips or smart labels that can store unique identifiers and relay this information to electronic readers
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CLOSING CASE ONE
Listerine’s Journey
When you use Listerine antiseptic mouthwash, you are experiencing the last step in a complex supply chain spanning several continents and requiring months of coordination by countless businesses and individuals
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Detail Warner-Lambert’s facilities strategy
Detail Warner-Lambert’s inventory strategy
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Detail Warner-Lambert’s transportation strategy
Detail Warner-Lambert’s information strategy
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Katrina Shakes Supply Chains
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CLOSING CASE TWO QUESTIONS
How did Home Depot manage its supply chain to be one of the first stores to reopen after Katrina?
How could Wal-Mart have revamped its transportation driver to handle Katrina more efficiently?
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CLOSING CASE TWO QUESTIONS
How can the government learn from big business in dealing with disasters such as Katrina?
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