Professional Documents
Culture Documents
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Introduction
Supply chain management is the activities that procure materials and services, transform them into intermediate goods and final products, and deliver them to customers. The objective is to build a chain of suppliers that focuses on maximizing value to the ultimate customer. Supply chain management includes determining:
Transportation vendors Suppliers Account payable & receivable Order fulfillment Sharing customer, forecasting, credit and cash transfers distributors warehousing & inventory and production information
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Response Strategy
Respond quickly to changing requirement and demand to minimize stockouts Select primarily for capacity, speed, and flexibility Invest in excess capacity and flexible processes Develop responsive system, with buffer stocks positioned to ensure supply Invest aggressively to reduce production lead time Use product design that lead to low setup time and rapid production ramp-up
Differentiation Strategy
Share market research; jointly develop products and options. Select primarily for product development skills Use modular processes that lend themselves to mass customization Minimize inventory in the chain to avoid obsolescence Invest aggressively to reduce development lead time Use modular design to postpone product differentiation for as long as possible
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Inventory characteristics
Minimize inventory throughout the chain to hold down costs Shorten lead time as long as it does not increase costs Maximize performance and minimize cost.
Lead-time characteristics
Product-design characteristics
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Make-or-Buy Decisions
A choice between producing a component or service in-house or purchasing it from an outside source.
Outsourcing
Outsourcing transfers some of what are traditional internal activities and resources of a firm to outside vendors, making it slightly different from the traditional make-or-buy decision.
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LOYALTY TO YOUR ORGANIZATION; JUSTICE TO THOSE WITH WHOM YOU DEAL; FAITH IN YOUR PROFESSION
Avoid the intent and appearance of unethical or compromising practice. Demonstrate loyalty to the employer by diligently following the lawful instructions of the employer. Avoid any activity that would create a conflict between personal and employer interest. Avoid any activity that might influence, or appear to influence, supply management decisions. Handle confidential or proprietary information with due care and proper consideration.
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Many suppliers
A supplier responds to the demand and specifications of a request for quotation, with the order usually going to the low bidder.
Few suppliers
Low cost, a buyer is better of forming a long-term relationship with a few dedicated suppliers.
Vertical integration
Developing the ability to produce goods or services previously purchased or actually buying a supplier or a distributor.
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Keiretsu networks
A Japanese term that describes suppliers who become part of a company coalition.
Virtual companies
Companies that rely on a variety of supplier relationships to provide services on demand. Also known as hollow corporations or network companies.
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Trust
Members of the chain must enter into a relationship that share information.
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Local optimization
Members of the chain are inclined to focus on maximizing local profit or minimizing immediate cost based on their limited knowledge.
Large lots
Bullwhip effect is the increasing fluctuation in orders that often occurs as orders move through the supply chain.
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Blanket Orders
A long-term purchase commitment to a supplier for items that are to be delivered against short-term releases to ship.
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Standardization
The purchasing department should make special efforts to increase levels of standardization.
Postponement
Delaying any modifications or customization to a product as long as possible in the production process.
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Pass-through Facility
Expedites shipment by holding merchandise and delivering from shipping hubs.
Channel Assembly
Postpones final assembly of a product so the distribution channel can assemble it.
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E-PROCUREMENT
E-procurement uses the Internet to facilitate purchasing. E-purchasing speeds purchasing, reduces costs, and integrates the supply chain, enhancing an organizations competitive advantage. Electronic Ordering and Funds Transfers are traditional approaches to speeding transactions and reducing paperwork. Electronic data interchange (EDI) is a standardized data-transmittal format for computerized communications between organizations. Advanced shipping notice (ASN) is a shipping notice delivered directly from vendor to purchaser. 6/22/2013
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E-PROCUREMENT
Online Catalogs Auctions RFQs
When purchasing requirement are nonstandard, time spent preparing requests for quote (RFQ) and the related bid package can be substantial.
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VENDOR SELECTION
Vendor Evaluation
Involves finding potential vendors and determining the likelihood of their becoming good suppliers.
Vendor Development
How integrate the supplier into the system. Include everything from training, to engineering and production help, to procedures for information transfer.
Negotiations
Approaches taken by supply chain personnel to develop contractual relationships with suppliers.
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Negotiations
Competitive Bidding
When suppliers are not willing to discuss costs or where near-perfect markets do not exist, competitive bidding is often appropriate.
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LOGISTICS MANAGEMENT
Logistics management is an approach that seeks efficiency of operations through the integration of all material acquisition, movement, and storage activities.
Distribution Systems
Trucking,
Third-Party Logistics
Supply
chain managers may find that outsourcing logistics is advantageous in driving down inventory investment and costs while improving delivery reliability and speed.
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Inventory turnover
Cost
Weeks of supply
Inventory
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GOOD LUCK
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