supply chain management ...
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om5-9_1.pptxCopyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
OM
Supply Chain Design
9
COLLIER/EVANS
5
1
Explain the concept of supply chain management
Describe the key issues in designing supply chains
Define metrics used in evaluating supply chain performance
LEARNING OUTCOMES
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OM5 | CH9
2
Explain important factors and decisions in locating facilities
Describe the role of transportation, supplier evaluation, technology, and inventory in supply chain management
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OM5 | CH9
LEARNING OUTCOMES (continued)
Supply Chain
Key subsystem of a value chain that focuses on physical movement of goods and materials
Supports information through the supply, production, and distribution processes
Coordinates the flow of materials, services, and information among the elements of the supply chain to maximize customer value
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OM5 | CH9
4
Key Functions of Supply Chain
Purchasing and procurement of materials and supplies
Sales and order processing
Operations
Inventory and materials management
Transportation and distribution
Information management
Finance
Customer service
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9.1 Typical Goods-Producing Supply Chain Structure
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Exhibit
6
Supply Chain Management (SCM)
Management of all activities that facilitate the fulfillment of a customer order for manufactured goods
To achieve satisfied customers at a reasonable cost
Includes managing:
Materials within supply chain
Flows of information and money that are necessary to coordinate activities within the supply chain
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OM5 | CH9
7
The Supply Chain Operations Reference (SCOR) Model
Framework for understanding the scope of SCM based on functions involved in managing a supply chain
Plan
Source
Make
Deliver
Return
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OM5 | CH9
8
Designing the Supply Chain
Strategic and operational perspectives are included in supply chain design decisions
Contract manufacturer: Firm that specializes in certain types of goods-producing activities
Customized design
Manufacturing
Assembly, and packaging
Works under contract for end users
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9
Advantages of Using Contract Manufacturing
Access to advanced manufacturing technologies
Faster product time-to-market
Customization of goods in regional markets
Lower total costs resulting from economies of scale
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OM5 | CH9
10
Third-Party Logistics (3PL) Providers
Provide integrated services that might include:
Packaging
Warehousing
Inventory management
Inbound or outbound transportation
Leverage business intelligence to create efficiencies and economies of scale in the supply chain
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OM5 | CH9
Efficient and Responsive Supply Chains
Efficient supply chains: Designed for efficiency and low cost
By minimizing inventory and maximizing efficiencies in process flow
Responsive supply chains: Focus on:
Flexibility and responsive service
Ability to react quickly to changing market demand and requirements
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12
Push and Pull Systems
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13
Push system
Pull system
Produces goods in advance of customer demand
Produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages
Uses a forecast of sales and moves them through the supply chain to points of sale where they are stored as finished goods inventory
Push and Pull Systems
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OM5 | CH9
Push-pull boundary
Point in the supply chain that separates the push system from the pull system
Postponement
Process of delaying product customization until the product is closer to the customer at the end of the supply chain
9.2 Supply Chain Push-Pull Systems and Boundaries
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OM5 | CH9
Exhibit
15
Sustainable Supply Chains
Purpose - Reduce costs while helping the environment
Green sustainable supply chain: Process of using environmentally friendly inputs and transforming these inputs through change agents
Byproducts can improve or be recycled within the existing environment
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16
Manufactured Good Recovery
Developing options to recover manufactured goods that will be discarded or stable
Reuse or resell
Repair
Refurbish
Remanufacture
Cannibalize parts
Recycle goods
Incineration or landfill disposal
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OM5 | CH9
17
Manufactured Good Recovery
Reverse logistics: Managing the flow of finished goods, materials, or components that can be unusable or discarded
Through supply chain from customers toward either suppliers, distributors, or manufacturers
For the purpose of reuse, resale, or disposal
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18
9.3 Example of a Manufactured Good Recovery (Reverse Logistics) Supply Chain
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Exhibit
19
Measuring Supply Chain Performance
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20
Delivery reliability
Responsiveness
Customer-related measures
Supply chain efficiency measures
Sustainability measures
Financial measures
Location Decisions in Value Chains
Profound effect on supply chain performance and a firm’s competitive advantage
Type of facility and its location affect the supply chain structure
Service organizations operate large numbers of similar facilities
Multisite management: Process of managing geographically dispersed service-providing facilities
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21
Critical Factors in Location Decisions
Economic factors
Facility costs - Construction, utilities, insurance, taxes, depreciation, and maintenance
Operating costs - Fuel, direct labor, and administrative personnel
Transportation costs - Associated with moving goods and services from the origins to the final destinations
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22
Critical Factors in Location Decisions
Noneconomic factors
Availability of labor, transportation services and utilities
Climate, community environment, and quality of life
State and local legal and political factors
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Location Decision Process
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24
Global location
Regional location
Community location
Local site location
Center of Gravity Method
Determines the X and Y coordinates (location) for a single facility
Takes into account locations, demand, and transportation costs to arrive at the best location
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25
Center of Gravity Method
Cx= ΣXiWi/ΣWi
Cy= Σ YiWi/ΣWi
Where
Cx = x coordinate of the center of gravity
Cy = y coordinate of the center of gravity
Xi = x coordinate of location i
Yi = y coordinate of location i
Wi = Volume of goods and service moved to or from location i
Used to locate service facilities
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OM5 | CH9
Managing Supply Chains
Requires numerous operational decisions
Global sourcing
Selecting transportation services
Incorporating technology
Managing inventory
Vendor managed inventory (VMI)
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OM5 | CH9
Vendor-managed Inventory
Advantages
Optimize production operations
Better control on inventory and capacity
Reduce total supply chain costs
Disadvantage
Results in higher than necessary customer inventories
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28
Supply chain management is managing materials within the supply chain
Sustainable supply chains reduce costs while helping the environment
Managing supply chains requires numerous operational decisions
SUMMARY
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OM5 | CH9
Contract manufacturer
Efficient supply chains
Green sustainable supply chain
Multisite management
Postponement
Pull system
Push system
Push-pull boundary
Responsive supply chains
Reverse logistics
KEY TERMS
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OM5 | CH9
Supply chain management (SCM)
The supply chain operations reference (SCOR) Model
Vendor managed inventory (VMI)
KEY TERMS
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OM5 | CH9
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OM5 | CH9
