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