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