Operations Management Chapter 15 – Supply Chain Management

supply chain
sequence of activities and enterprises involved in producing a product or delivering a service
upstream chain
organizations and activities between enterprise and source of raw materials
downstream chain
organizations and activities between enterprise and final customer
numbered tiers
method of identifying and managing upstream suppliers of an enterprise
supply chain management
coordination of all functions and activities needed to achieve integrated supply-demand management
Strategic responsibilities 1
Alignment of supply chain functional strategies with organizational strategies of the enterprise
Strategic responsibilities 2
Configuration of networks and facilities for upstream and downstream supply chains
Strategic responsibilities 3
Distribution Strategy
Strategic responsibilities 4
Strategic partnerships
Strategic responsibilities 5
Capacity planning
Strategic responsibilities 6
Risk Management
Strategic responsibilities 7
Technology Integration
Strategic responsibilities 8
Product and Service Design
Strategic responsibilities Issue 1
measuring and managing ROI for investments in supply chain facilities and networks
Strategic responsibilities Issue 2
Managing internal and external risk
Strategic responsibilities Issue 3
Determine appropriate levels of outsourcing
Strategic responsibilities Issue 4
Managing customer and supplier relationships
Strategic responsibilities Issue 5
Evaluating and integrating new technologies into supply chain activities and management
Strategic responsibilities Trends 1
Opportunities to use e-business technology to improve performance of enterprises and its supply chain
Strategic responsibilities Trends 1-2
Increase competitiveness by shortening response times
Strategic responsibilities Trends 1-3
Reduce operating costs while improving quality of service
Strategic responsibilities Trends 1-4
Enter new markets and create global presence without physical facilities and networks
Strategic responsibilities Trends 1-5
Collect big data on customers and their wants, needs, interests and preferences
Strategic responsibilities Trends 2
Improve environmental sustainability by identifying ways to green the supply chain
Strategic responsibilities Trends 3
Improve performance by applying principles and practices of lean operations to external activities and elements of its supply chain
Strategic responsibilities Trends 4
Use of strategic sourcing to systematically create a supply chain for components and products
Strategic responsibilities Trends 5
Term also used to refer considering factors other than price in procurement decision-making
Tactical responsibilities
1. Forecasting.
2. Logistics Management.
3. Traffic/Transportation Management.
4. Materials Handling.
5. Procurement management.
6. Inventory Management.
7. Collaboration.
Logistics management
decision-making and planning for operational and transportation aspects of products, services, and data flow – sometimes managed as inbound and outbound logistics
Traffic/transportation management
Routing and tracking of inbound and outbound shipments
Materials Handling
movement of raw materials, components and products within facilities
Procurement Management
decision-making and planning for the purchasing of components and services and managing of supplier relationships
Purchasing cycle
1. Receive requisition.
2. Select supplier.
3. Place order with supplier.
4. Monitor order.
5. Receive order.
Elements of managing supplier relationships
1. Conducting supplier audits.
2. Administration of supplier certification programs.
3. Establishing and maintaining supplier partnerships.
Inventory management
decision-making and planning for achievement of desired levels of customer service with reasonable inventory costs
Third party logistics – 3PL
use of outsourcing to manage logistics and related information flow
Access benefits of 3PL
1. Logistics management specialists.
2. Well-developed information systems.
3. More favorable transportation rates – prices.
Inventory Velocity
speed at which components or products move through the supply chain
Bullwhip Effect
inventory fluctuations tend to be larger moving upstream thru supply chain
Vendor Managed Inventory – VMI
involves suppliers physically managing component inventories at a customer’s facility.
Also known as JIT 2
Tactical Management Issues 1
Shift to global supply chains and impact on inventory and logistics costs and lead times.
Tactical Management Issues 2
Impact of language and cultural differences on global supply chain management.
Tactical Management Issues 3
Impact of political and economic instability on management of global supply chains.
Tactical Management Issues 4
Impact of currency fluctuations on procurement and transportation costs of global supply chains.
Tactical Management Issues 5
Maintaining trust among supply chain partners.
Operational Responsibilities
1. Scheduling.
2. Shipping and Receiving.
3. Inventory control.
4. Production and Assembly.
5. Quality control.
6. Information sharing.
7. Order fulfillment.
8. Reverse logistics.
Order fulfillment management
planning and decision-making for responding to customers from order placement to final delivery
Information velocity
speed at which information is communicated thru system
Fill rate
percent of orders – demand – filled from inventory – stock on hand.
Reverse logistics management
planning and decision-making for flow of returned products to the enterprise and its supply chain
process of screening return products to prevent incorrect acceptance
process of finding ways to minimize number of returned items
value chain
term that recognizes each activity or organization in a supply chain adds value to the final product or service
v – demand chain
value stream term for downstream portion of the chain
v – supply chain
value stream term for upstream portion of the chain

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