Supplier Stakeholder

Transformation management

Acquired inputs are converted into outputs of more value to the customer

Attributes of improved supply chain relationships (Handfield)

Co-destiny relationships, long-term strategic goal, trust firmly entrenched, objective performance measure, communications..

Quality

Conformance to requirements of the customer

Supplier rights

Contractual (supply agreement), statutory (competitive marketplace, product protection), ethical (fair treatment in a good business-like manner)

Appraisal costs

Cost incurred to determine conformance to requirements: inspections, planned evaluations

Prevention costs

Costs of all activities undertaken to prevent defects: in house training, training material, meetings, quality training

Functional silos

Entities within an entity

Supplier Interests

Good customer relationships, they care about the financial condition of the customer, and they want to maintain and expand customer business (increase market share)

Supply Chain management

Integration of supply chain activities through improved supply chain relationships, to achieve a sustainable competitive advantage

Failure costs

Internal and external costs associated with nonconformance; spoiled work, material waste, repairs

ISO Standards

International Organization of Standardization's 9000 series sets standards for defining how a company ensures its product meets customer requirements

Downstream supplier networks

Involves processing materials collected during the upstream stage into a finished product. Also includes that sale of the product to other businesses, government of individuals. Has direct contact with consumers.

Upstream supplier networks

Involves searching for and extracting raw materials, it does not process materials. Input suppliers

Conversion costs

Labor, overhead aka value added costs

Benchmarking

Looking for and learning from best practices, no matter where they exist (mimic companies)

Implementing the production plan

Make or buy decision, selection of suppliers, inventory control, and material resource planning

Direct Costs

Materials, labor

Internal failure costs

Net cost of scrap, net cost of spoilage, rework labor and overhead, debugging software

Indirect costs

Overhead (building, machines, insurance, taxes, managers, supervisor)

Six Sigma

Quality control program embraced by many major corporations in an attempt to produce essentially error free product (error rate-3 defects per million)

External failure costs

Returns and allowance arising from quality problems, lost sales arising from a reputation of poor quality, product recalls, liability arising from defective products

Just-in-Time systems

Stock only on an as needed basis; reduces cost and complexity

Material Resource Planning

System to ensure adequate parts and materials on hand based on production schedules and product bill-of-materials

Supply Chain

These "links" (firms and activities) span from extraction of raw materials through delivery of product to the customer. Includes upstream supplier networks, internal functions, and downstream supplier networks.

Reasons why supplies are stakeholders

They have interests, rights or claims in regards to the focal (target) company

How supply chain management creates value

Through strengthening and integration of supply chain activities: networks (both upstream and downstream members), information flows, material flows and relationships

Primary Task of production and operation management

To manage the use of people and machinery in converting materials and resources (inputs) into finished goods (outputs)

Internal functions

operations

Supplier claims

unpaid goods and services, unfulfilled supply contracts