Operations management by stevenson 9th student slides chapter 11

Chapter 11 Supply Chain Management McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc All Rights Reserved Chapter 11: Learning Objectives • You should be able to: – – – – – – Discuss the key issues of supply chain management (SCM) State the goal of SCM List the components of SCM List four recent trends in SCM State some of the complexities of global SCM List some of the strategic, tactical and operational responsibilities of SMC – List some advantages of e-business – Explain the motivations and risks of outsourcing as a strategy 11-2 Chapter 11: Learning Objectives (contd.) • You should be able to: – Explain the importance of supplier partnerships – List some key issues relative to managing supply chain inventories – Explain the importance of logistics management – Discuss the issues involved in managing returns – List the requirements of an effective supply chain – Explain some of the challenges in creating an effective supply chain 11-3 Supply Chain • Supply Chain: – the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service – Sometimes referred to as value chains 11-4 Typical Supply Chains 11-5 Supply Chain Management • Supply Chain Management (SCM) – The strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management 11-6 Key SCM Issues • The goal of SCM is to match supply to demand as effectively and efficiently as possible • Key issues: – – – – – – Determining appropriate levels of outsourcing Managing procurement Managing suppliers Managing customer relationships Being able to quickly identify problems and respond to them Managing risk 11-7 Trends in SCM • Trends affecting supply chain design and management: – Re-evaluation of outsourcing – Risk management – Inventory management – Lean supply chains – Sustainability 11-8 Procurement • The purchasing department is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service • The goal of procurement – Develop and implement purchasing plans for products and services that support operations strategies 11-9 E-Business • E-business – the use of electronic technology to facilitate business transactions – Applications include • Internet buying and selling • E-mail • Order and shipment tracking • Electronic data interchange • Product and service promotion • Provide information about products and services 11-10 Contrasting Supplier Relationships 11-11 The Bullwhip Effect 11-12 Supply Chain Performance Metrics • Financial – – – – Return on assets Cost Cash flow Profits • Suppliers – – – – Quality On-time delivery Cooperation Flexibility • Operations – Productivity – Quality • Inventory – Average value – Turnover – Weeks of supply • Order fulfillment – – – – Order accuracy Time to fill orders % of incomplete orders shipped % of orders delivered on time • Customers – Customer satisfaction – % of customer complaints 11-13 Challenges • Barriers to integration of organizations • Getting top management on board • Dealing with trade-offs • Small businesses • Variability and uncertainty • Response time 11-14 Operations Strategy • Effective supply chains are necessary for organizational success – Requires integration of all aspects of the chain – Supplier relationships are a critical component of supply chain strategy – Lean operations and six sigma are being employed to improve supply chain success 11-15 ... risk 11- 7 Trends in SCM • Trends affecting supply chain design and management: – Re-evaluation of outsourcing – Risk management – Inventory management – Lean supply chains – Sustainability 11- 8... a product or service – Sometimes referred to as value chains 11- 4 Typical Supply Chains 11- 5 Supply Chain Management • Supply Chain Management (SCM) – The strategic coordination of business functions... service promotion • Provide information about products and services 11- 10 Contrasting Supplier Relationships 11- 11 The Bullwhip Effect 11- 12 Supply Chain Performance Metrics • Financial – – – – Return