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Flashcards in Supply Chain Management Deck (25)
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1

A. DEFINITION

measures wealth of the company by the way the produce the products
SCM - complex network which makes transformation possible
Dynamic Network which requires effective coordination of Information (up/downward streaming the SC)

2

Conflict in Traditional System
4 main objectives to get most profit

1. Provide best C. Service
2. Provide lowest production costs
3. Provide lowest inventory investment
4. Provide lowest distribution costs

3

Supply Chain Concept

all activities involved (directly/indirectly) in full-filling C. request
Add value to Organisation (C. Experience)
Value Creation Network (all external entities)
Within Company - includes all function fulfilling C. Request (departments)

4

A. SC Value Proposition

gross margin/return of assets=
(sales - COGC)/
(Average Inventory at cost)
Will depend on RIGHT
--> Product, Price, Store, Quantity, Customer, Time

5

C.
1. SCM Objectives

What - Strategy
--> establish policies, operating footprints
How much? - Tactical
--> deploy resources to match S&D
When/Where? - Operational
--> Schedule, Monitor, Control, Adjust Production
Do - Execution?
--> Build & Transport

6

C.
2. SCM Outcomes

What - Strategy
--> Supply Policies, Network Design
How much? - Tactical
--> Demand forecast, Logistic Plan, Inventory Target
When/Where? - Operational
--> Work Center Scheduling, Order/Inventory Tracking
Do - Execution?
--> Order Cycle, Material Movement

7

A. Supply Chain McKinsey

1. Technology (Patent)
2. Design (physical, quality)
3. Production (RM, Integration, Procurement, Assembly)
4. Marketing (prices, Advert)
5. Distribution (Chain, Warehouse, Integration)
6. Service (Speed, Warranty, Value added)

8

A. SC McKinsey
Downside

He misses out most important part which is Operation Department - linking all other departments

9

B. Conflicts in Traditional System

to get most profit firm must fulfil 4 main objectives:
1. provide best C.S
2. provide lowest production cost
3. Provide lowest inventory investment
4. Provide lowest distribution cost

10

B. Supply Chain Future

companies will no longer focus to compete on products but on VALUE CHAIN NETWORK

11

D. Value Chain Structure

Supplier (Physical Supply)
Manufacturer (M, Planning, Control)
Distribution System (Physical Distribution)
Customer
--> flow of P&S

12

D.
1. Physical Supply

movement & storage of goods from supplier to manufacturers

13

D.
2. Physical Distribution

movement & storage of finished goods from end of production to Customer

14

D
3. Channel Distribution

particular path where goods are moved through distribution centers, wholesalers, retailers

15

D.2 - Physical Distribution
Responsible

delivering to C. what they want on time and at min. cost
design & operate a system that attain the required level of C. Service
all activities involved in movement & storage of goods must in organised into an integrated system

16

D.2 - Physical Distribution
Activities

1. Transportation
--> adds place value to product
2. Distribution inventory
--> creates time value by placing order closer to C.
3. Warehouse (Distribution Centers)
4. Material Handling (efficiency & cost of operating the distribution)
5. Protective Packaging
6. Order Processing & Communication (C.Service, time element in delivery as many intermed. involved)

17

Transportation Costs
Benefits

knowledge of these elements enables shipper to get a better price by selecting right shipping methos

18

Transportation Costs
Elements

1. Line Haul
2. pickUp & Delivery
3. Terminal handling
4. Billing & Collecting

19

E. Service Function Of Warehouse
GENERAL WH

--> prime purpose = protecting stored goods (furniture storages invent. accumulation before big seasonal sale)

20

E. Service Function Of Warehouse
Distribution WH

movement & mixing (handling)
goods receive in large volume must be stored briefly, broken down into small indv. orders, different items required by C. in the MP

21

F. Role of WH
Transport Consolidation

reduce transportation costs using WH
consolidation of small (LTL) shipment to large (TL) shipments
Break-Bulk Shipment
Shipment from factories are consolidated in WH, which they divided into small Shipment to go into local market

22

F. Role of WH
Product Mixing

grouping diff. items into an order & economies
a) without D.C - C. would have to order from each diff. sources and pay for LTL transport from each source
b) with D.C - diff. items can be palced & delivery from central location (coming from diff. sources) to the diff. customers

23

G. Warehouse System
Physical Supply System

Suppliers (many) --> LTL Shipment
WAREHOUSE --> TL Shipment
FACTORY (one)

24

G. Warehouse System
Physical Distribution System

Factories (many) --> TL
WAREHOUSE --> LTL Shipment
MARKET (Many)

25

LTL

Less than trackload