MSM 6645 DB 4 : Strategic Planning

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Quality Management
Managing the Supply Chain
Chapter 8

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• Companies don’t compete against other companies; they compete against each others’ supply chains.

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• A supply chain is the network of organizations involved in the movement of materials, information, and money as raw materials flow from their source through production until they are delivered as a finished product or service to the final customer.

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• Who are the participants in supply chains?
• Multiple suppliers
• Wholesalers
• Manufacturers
• warehouses
• Distribution centers
• Retailers
• Customers

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• What drives supply chains?
• Money
• Materials
• Information

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• Supply chain design should consider:
• The products travelling the supply chain
• The services travelling through the supply chain
• The information travelling through the supply chain
• The structure of the supply chain
• How each segment of the supply chain be managed and optimized

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• What are the benefits of effective supply chains?
• Effective supply chains optimize the value creation process by improving processes, implementing lean principles, optimizing asset allocation, and monitoring quality assurance.

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• The critical elements of supply chain management are:
• Inventory management
• Information sharing
• E-commerce
• Logistics,
• Purchasing

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• Why is information sharing critical when creating an effective supply chain?
• organizations need to know what is needed, how much, and when.

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• How does e-commerce support supply chain management?
• Faster purchasing cycle times
• Reduced inventory
• Fewer order processing people
• Faster product or service search and ordering
• Greater information availability
• Automated validation and pre-approved spending
• Less printed material like order forms or invoices
• Increased flexibility
• On-line communication

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• What is logistics?
• Logistics is the process of determining the best methods of procuring, maintaining, packaging, transporting, and storing materials and personnel in order to satisfy customer demand.

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• What role does purchasing play in supply chain management?
• Purchases are driven by several factors, including quality of the goods or services, timing of the deliveries of the goods or services, and the costs associated with purchasing the goods or services.

Summers: Quality Management, 2nd. ed.

© 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

• What challenges face the development of an effective supply chain?
• Synchronization
• Fluctuations in demand
• Long supply chains
• Great distances between supply chain members
• Lack of communication
• Lack of information sharing