Supply Chain Management

Three Main Links of Supply Chain

1. Materials flow 2. Transformation of materials into products 3. Distribution

Five Basic Supply Chain Management Components

1. Plan 2. Source 3. Make 4. Deliver 5. Return

Factors that add Value by OM decisions

Cost, Quality, Delivery, Flexiility, and Service

Dis-intermediation

Eliminate the middle man

Operations Management

Forecasting, Capacity Planning, Scheduling, Maintaining inventory, assuring quality, and motivating and training

SCM Best Practices

Make the sale to suppliers, wean employees off traditional business practices, ensure the SCM system supports the organizational goals, deploy in incremental phases and measure and communicate success, be FUTURE ORIENTED

"Classic" Supply Chain

Suppliers => Manufacturer => Wholesalers/Distributors => Retailers => Customers

Supply Chain Visibility

ability to view all areas up and down the supply chain

customer order promise cycle time

agreed upon cycle time of a purchase order

supply chain execution software

automates the various steps and stages of the supply chain

Cycle inventory

average amount of inventory held to satisfy customer demands between inventory deliveries

customer order actual cycle time

average time it takes to actually fill customer's order

Return

comapnies must create a network for receiving defective and excess products and support customers who have problems with delivered products

Source

companies carefully choose reliable suppliers that will deliver goods and services required for making products

Supply Chain

consists of all parties involved, directly or indirectly, in the procurement of a product or raw material

safety inventory

extra inventory held in the event demand exceeds supply

demand planning software

generates demand forecasts using statistical tools and forecasting techniques

Supply Chain Management (SCM)

involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

inventory replenishment cycle time

measure of the manufacturing cycle time plus time included to deploy the product to the appropriate distribution center

inventory turnover

number of times a company's inventory cycles

bullwhip effect

occurs when distorted product demand information passes from one entity to the next throughout the supply chain

supply chain partners

partners throughout the supply chain that deliver finished products, raw materials, and services

supply chain logistics

product delivery

Inventory management and control software

provides control and visisbility to the status of individual items maintained in inventory

supply chain operation

schedule for production activities

Deliver (Logistics)

set of proceses that plans for and controls the efficient and effective transportation and storage of suppliers to customers

Make

step where companies manufacture their products

Plan

strategic portion of supply chain management

supply chain strategy

strategy for managing all resources to meet customer demand

back order

unfulfilled customer order