Supply chain management ppt @ bec doms
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Supply chain management ppt @ bec doms
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Supply chain management ppt @ bec doms
- 10. The Supply-Chain Consumer Retailer Manufacturing Material Flow VISA ® Credit Flow Supplier Supplier Wholesaler Retailer Cash Flow Order Flow Schedules
- 11. The Supply Chain Supplier Supplier Supplier Inventory Inventory Distributor Inventory Inventory Manufacturer Customer Customer Customer Market research data Scheduling information Engineering and design data Order flow and cash flow Ideas and design to satisfy end customer Material flow Credit flow
- 12. Material Costs in Supply-Chain 11% 31% 58% Material Dir Wages Other 71% 16% 13% COGS Payroll Other 83% 9% 8% COGS Payroll Other Manufacturing Wholesale Retail
- 14. Supply-Chain Support for Overall Strategy - continued Process Characteristics Maintain high average utilization Low Cost Invest in excess capacity and flexible processes Response Modular processes that lend themselves to mass customization Inventory Characteristics Minimize inventory throughout the chain to hold down costs Develop responsive system, with buffer stocks positioned to ensure supply Minimize inventory in the chain to avoid obsolescence Differentiation
- 15. Supply-Chain Support for Overall Strategy - continued Lead-time Characteristics Shorten lead-time as long as it does not increase costs Low Cost Invest aggressively to reduce production lead-time Response Invest aggressively to reduce development lead-time Differentiation Product-design Characteristics Maximize performance and minimize cost Use product designs that lead to low set-up time and rapid production ramp-up Use modular design to postpone product differentiation for as long as possible
- 19. Dollars of Additional Sales Needed to Equal 1$ Saved Through Purchasing Percent of Sales Spent in the Supply-Chain 30% 40% 50% 60% 70% 80% 90% 2 $2.78 $3.23 $3.85 $4.76 $6.25 $9.09 $16.67 4 $2.70 $3.13 $3.70 $4.55 $5.88 $8.33 $14.29 6 $2.63 $3.03 $3.57 $4.35 $5.56 $7.69 $12.50 8 $2.56 $2.94 $3.45 $4.17 $5.26 $7.14 $11.11 10 $2.50 $2.86 $3.33 $4.00 $5.00 $6.67 $10.00 Percent Net Profit of Firm
- 21. The Purchasing Focus Materials Management -High transportation cost -High inventory costs Supply Management -High costs -Scarcity: national or international Source Management -Unique items -Custom-made items -High technology items Purchasing Management -Commodity items -Standard products
- 22. Traditional Purchasing Process Receiving Dock Purchase Order Packing List Order Processing Invoice Receivables Report Check Accounts Receivable Accounts Payable Mail Mail Reconcile Mail Customer Supplier
- 30. Daimler Chrysler’s Supplier Cost Reduction Effort Supplier Suggestion Model Savings Rockwell Use passenger car door locks on trucks Dodge trucks $280,000 Rockwell Simplify design/substitute materials on manual window system Various $300,000 3M Change tooling for wood- grain panels to allow three from one die instead of two Caravan, Voyager $1,500,000 Trico Change wiper-blade formulation Various $140,000 Leslie Metal Arts Exterior lighting suggestions Various $1,500,000
- 33. Forms of Vertical Integration Iron Ore Steel Automobiles Distribution System Dealers Silicon Integrated Circuits Circuit Boards Computers Watches Calculators Farming Flour Milling Raw Material (Suppliers) Backward Integration Current Transformation Forward Integration Finished Goods (Customers) Baked Goods
- 34. Vertical Integration Can be Forward or Backward Vertical Integration Examples of Vertical Integration Raw material (suppliers) Iron ore Silicon Farming Backward Integration Steel Current Transformation Automobiles Integrated Circuits Flour Milling Forward Integration Distribution System Circuit boards Finished goods (customers) Dealers Computers, watches, calculators Baked Goods
- 46. Vendor Selection Rating Form
- 50. Supply-Chain Performance Compared Typical Firms Benchmark Firms Administrative costs as percent of purchases 3.3% 0.8% Lead time (weeks) 15 8 Time spent in placing order 42 minutes 15 minutes Percentage of late deliveries 33% 2% Percentage of rejected material 1.5% .0001% Number of shortages per year 400 4
Editor's Notes
- Is this the future? Is our increased application of technology forcing both individuals and organizations to become specialists in relatively narrow areas? What problems is this likely to cause? This is probably a good example to discuss in detail. Points which might be raised include: - What differences might one expect between Volkswagen’s employment of 800 of its own workers versus 800 workers from a variety of companies? - What risks does this practice raise for VW? - What changes must VW make to integrate the workers from the other companies into the VW organization? - While this might work in Brazil, would it work equally well in the U.S.?
- Ask students what are the benefits and pitfalls of such tight integration.
- Probably the most important point to be made here is the encompassing nature of supply-chain management - from suppliers’ suppliers through internal production through distribution to the customer.
- This slide might be used to make the point about the various “flows” - material, information, money.
- Students should be asked to explain the differences illustrated by these graphs.
- This and the following two slides look at how supply-chain strategy can support overall strategy.
- Ask students how these requirements differ from those in a national or domestic environment.
- Students might be asked how they believe the role of purchasing is changing given the increased use of information technology and strategies such as JIT.
- This slide should further impress upon students the importance of the purchasing function.
- This slide emphasizes the role of efficiency of purchasing.
- While these are the main functions of purchasing, one would also expect the purchasing department to participate in make-buy decisions.
- Students should be asked to consider how this traditional process might be changed through process reengineering and the effective application of information technology. (paperless purchasing?) How does the nature of this process change in a virtual company?
- You might provide examples of the use of each of these techniques.
- Ask students to consider the product characteristics which might cause a company to choose one or the other of the make/buy options.
- Ask students to consider the product characteristics which might cause a company to choose one or the other of the make/buy options.
- The strategic options listed are expanded upon in later slides.
- Subsequent slides expand upon these strategies.
- We read in the management literature more and more about “managing relationships.” If you use the “many supplier” strategy, how do you develop useful relationships?
- The risk of having only a single supplier will probably be obvious to most students. What nature of relationship must you have with your supplier to reduce this risk?
- Under what conditions is vertical integration an appropriate strategy? Would we choose it simply if the item production/purchase cost would be less?
- Students should be asked to consider why, other than on a “cost” basis, a company might want to consider vertical integration.
- Students might be asked to consider what it would take to implement such a system in the U.S.
- Students should be asked to consider the problems in establishing a virtual company, such as: - how does one decide which companies to ask to join their alliance? - how is the decision to share revenues made? - how is performance evaluated? - etc.
- Ask students to consider the conditions under which each of these options might be appropriate.
- Students should be asked to consider the problems which might be encountered at each step in this process.
- Students might be asked if they perceive one or another of these criteria to be especially important. Also, are there other criteria they would prefer to use or think should be added? (One such criteria might be the ability to communicate using EDT)
- Students might be asked to consider what additional information they might want before approving a vendor selection.
- Ask students under what conditions each of these models might be appropriate.
- In addition to framing the materials management function, this slide raises the issue of “how does one begin assigning responsibilities for each of the facets of supply-chain management?”
- Here you might simply discuss some of the options available under each of the categories listed.
- This slide summarizes some of the benefits of effective supply-chain management.