Supply Management with other Internal Departments Supply Management within the Supply Chain Supply Management: Integrating Suppliers and Customers

1. Chapter 3
Supply Management:
An Organization
Spanning Activity
3-1

2. Key Concepts
• Supply Management with other Internal
Departments
• Supply Management within the Supply
Chain
• Supply Management: Integrating Suppliers
and Customers
3-2

3. Supply Management’s Relations with Other
Internal Departments
• Engineering
• Manufacturing and Operations
• Quality
• Marketing
• Finance
• Information technology
• Logistics
• Accounts Payable
• Legal
3-3

4. Customer
requirements
Internal Interfaces
of the Supply Management Function
Supply
Mgmt
Marketing
Engineering
Material Control Quality
Marketing
Manufacturing
Estimates
Specs.
V.A.
Make
orbuy
Supplier
capabilities
Distribution
Timing
Quantities
Source approval
Inspection
Customers
Suppliers
Figure 3-1
3-4

5. Effect of Different Materials on Productivity and
Cost
Exhibit 3-1
3-5

6. Supply Management in Non-Manufacturing
Organizations
• Supply management often must lead the
requirements process
» Professionals that often lead the effort in
manufacturing organizations are often not
available
• Quality implications, time-to-market,
pricing elasticity, technology inflow and
continuity of supply are all still issues
• These issues combine to have a major
impact on a non-manufacturing firm's
sales and bottom line!
3-6

7. Supply Management in Government
• Supply management has a major impact
on the efficient and effective use of our tax
dollars at all levels of government
• Many advances in supply management
originated in the federal government
• Virtually all of the problems present in
manufacturing organizations are present
in government procurement
3-7

8. Monitoring the Supply Environment
• Changes in legislation
• Wars and other conflicts
• A consolidation among suppliers
• Wages, projected wages, labor issues
3-8

9. Six-step Environment Monitoring Strategy
1. "Determine the cost, supply, and technology
drivers of the materials and services..."
2. "Identify the major suppliers and customers of
the materials and services."
3. "Determine the sources of information for those
drivers."
4. "Build a model that predicts the material (or
service) behavior."
5. "Monitor the model to determine its accuracy."
6. "Continuously make improvements as new
relationships are understood and additional data
becomes available."
3-9

10. Concluding Remarks
• In assuming greater strategic
responsibility, the activities of supply
managers have increased to include
spanning organizational boundaries
• Efforts to improve do not cease at an
organization’s internal functions, but
should span over the supply chain as well
3-10