SlideShare a Scribd company logo

Supply Chain Planning ^0 Operations Part 10.pptx

•Download as PPTX, PDF•
•
S
Sheldon Byron

Supply Chain Planning ^0 Operations Part 10

Career
1 of 236
Supply Chain Planning & Operations Part 10
What is Supply Chain? Supply chain coordination aims at improving supply chain performance by aligning the plans and the objectives of individual enterprises. •A supply chain is a network of companies and people that are involved in the production and delivery of a product or service. •The components of a supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers. •The functions of a supply chain include product development, marketing, operations, distribution, finance, and customer service. •Today, many supply chains are global in scale. •Effective supply chain management results in lower costs and a faster production cycle.
What is just-in-time (JIT) inventory system? JIT inventory system is a system that delivers inventory to a company just in time for it to be used. This can help to reduce inventory levels and costs. • The just-in-time (JIT) inventory system is a management strategy that minimizes inventory and increases efficiency. • Just-in-time manufacturing is also known as the Toyota Production System (TPS) because the car manufacturer Toyota adopted the system in the 1970s. • Kanban is a scheduling system often used in conjunction with JIT to avoid overcapacity of work in process. • The success of the JIT production process relies on steady production, high-quality workmanship, no machine breakdowns, and reliable suppliers. • The terms short-cycle manufacturing, used by Motorola, and continuous-flow manufacturing, used by IBM, are synonymous with the JIT system.
What is VMI system? VMI system is a system where the supplier manages the inventory for the company. This can help to reduce the company's workload and improve coordination with suppliers. Here’s how a vendor managed inventory system works: 1.Both the vendor and buyer agree on what goals and metrics define success for their VMI relationship. These are usually in-stock performance, inventory turnover rate, and transaction cost. Other parts of the agreement will address whether or not the buyer pays for the inventory on acquisition or on sale to the end user. Along with how excess inventory will be returned. 2.The vendor ships inventory to the buyer or retailer. 3.The vendor monitors the sales patterns and inventory levels of their products at that buyer or retailer. 4.The vendor makes reordering and replenishment calculations based on demand forecasting and lead time. 5.The vendor’s VMI specialist or planner reviews the calculations and places the
What is Demand Sensing? Demand sensing is a technique that uses real-time data to track demand and adjust inventory levels accordingly. This can help to reduce excess inventory and stockouts. Demand sensing uses real-time data and advanced analytics to understand and predict customer demand. This enables companies to optimize their supply chain and inventory management. • The concept of demand sensing differs from traditional demand planning, which relies on historical sales data and assumes that future demand will follow the same patterns as in the past. • Modern demand sensing is designed to be more agile and responsive, incorporating up-to-date information on factors like changes in consumer behavior, weather patterns, and economic conditions. • And in today's market, demand sensing is becoming increasingly important as companies face a variety of challenges
What is the Significance of Coordination for Supply Chain? Significance of coordination for supply chain performance include minimizing inefficiencies and costs, enhancing customer service and satisfaction, and improved overall supply chain performance. Effective supply chain coordination results in reduced excess inventory, shortened delivery time, increased sales, improved customer service and efficient product development efforts, low manufacturing cost, improved flexibility in dealing with high demand uncertainty and increased customer retention.
Outline What is supply chain management? A supply chain strategy framework Components of a SCM Major obstacles and common problems Seven Eleven Japan
Traditional View: Supply Chains in the Economy (1990, 1996) Freight Transportation$352, $455 B Transportation manager in charge Transportation software Inventory Expense $221, $311 B Inventory manager in charge Inventory software Administrative Expense $27, $31 B Logistics related activity 11%, 10.5% of GNP  $898 B spent domestically for SC activities in 1998.  $1,160 B of inventory in the US economy in the early 2000s. Transportation and inventory managers
Traditional View: Cost breakdown of a manufactured good Profit 10% Supply Chain Cost 20% Marketing Cost 25% Manufacturing Cost 45% Profit Supply Chain Cost Marketing Cost Manufacturing Cost Effort spent for supply chain activities are invisible to the customers.
What can Supply Chain Management do? Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies A typical box of cereal spends 104 days from factory to sale A typical car spends 15 days from factory to dealership Faster turnaround of the goods is better? Laura Ashley (retailer of women and children clothes) turns its inventory 10 times a year five times faster than 3 years ago inventory is emptied 10 times a year, or an item spends about 12/10 months in the inventory. To be responsive, it relocated its main warehouse next to FedEx hub in Memphis, TE. National Semiconductor used air transportation and closed 6 warehouses, 34% increase in sales and 47% decrease in delivery lead time.
Magnitude of Supply Chain Management Compaq estimates it lost $0.5 B to $1 B in sales in 1995 because laptops were not available when and where needed P&G (Proctor&Gamble) estimates it saved retail customers $65 M (in 18 months) by collaboration resulting in a better match of supply and demand When the 1 gig processor was introduced by AMD (Advanced Micro Devices), the price of the 800 meg processor dropped by 30%
Importance of SCM understood by some AMR Research: "The biggest issue enterprises face today is intelligent visibility of their supply chains-both upstream and down" Forrester Research: "Companies need to sense and proactively respond to unanticipated variations in supply and demand by adopting emerging technologies such as intelligent agents. To boost their operational agility, firms need to transform their static supply chains into adaptive supply networks” Gartner Group: “By 2004, 90% of enterprises that fail to apply supply-chain management technology and processes to increase their agility will lose their status as preferred suppliers” Open ended statement. Agility can be increased continuously.
Top 25 Supply Chains AMR research http://www.amrresearch.com publishes reports on supply chains and other issues. The Top 25 supply chains report comes out in Novembers. The table on the right-hand side is from The Second Annual Supply Chain Top 25 prepared by Kevin Riley and Released in November 2005.
SCM Generated Value Minimizing supply chain costs while keeping a reasonable service level customer satisfaction/quality/on time delivery, etc. This is how SCM contributes to the bottom line SCM is not strictly a cost reduction paradigm!
A picture is better than 1000 words! How many words would be better than 3 pictures? - A supply chain consists of - aims to Match Supply and Demand, profitably for products and services SUPPLY SIDE DEMAND SIDE The right Product Higher Profits The right Time The right Customer The right Quantity The right Store The right Price = + + + + + - achieves Supplier Manufacturer Distributor Retailer Customer Upstream Downstream
Detergent supply chain: Customer wants detergent Albertson’s Supermarket Third party DC P&G or other manufacturer Plastic cup Producer Chemical manufacturer (e.g. Oil Company) Tenneco Packaging Paper Manufacturer Timber Industry Chemical manufacturer (e.g. Oil Company)
Flows in a Supply Chain Customer Material Information Funds The flows resemble a chain reaction. Supplier
SCM in a Supply Network  Supply Chain Management (SCM) is concerned with the management and control of the flows of material, information, and finances in supply chains. Supply Demand Products and Services Cash Supply Side OEM Demand Side THAILAND INDIA MEXICO TEXAS US N-Tier Suppliers Suppliers Logistics Distributors Retailers Information  The task of SCM is to design, plan, and execute the activities at the different stages so as to provide the desired levels of service to supply chain customers profitably
Importance of Supply Chain Management  In 2000, the US companies spent $1 trillion (10% of GNP) on supply- related activities (movement, storage, and control of products across supply chains). Source: State of Logistics Report  Eliminating inefficiencies in supply chains can save millions of $. Tier 1 Supplier Manufacturer Distributor Retailer Customer Inefficient logistics High stockouts Ineffective promotions Frequent Supply shortages High landed costs to the shelf High inventories through the chain Low order fill rates Glitch-Wrong Material, Machine is Down – effect snowballs
Supply Sources: plants vendors ports Regional Warehouses: stocking points Field Warehouses: stocking points Customers, demand centers sinks Purchase Inventory Transportation Inventory A Generic Supply Chain
Cycle View of Supply Chains Customer Order Cycle Replenishment Cycle Manufacturing Cycle Procurement Cycle Customer Retailer Distributor Manufacturer Supplier Any cycle 0. Customer arrival 1. Customer triggers an order 2. Supplier fulfils the order 3. Customer receives the order
Push vs Pull System What instigates the movement of the work in the system? In Push systems, work release is based on downstream demand forecasts Keeps inventory to meet actual demand Acts proactively e.g. Making generic job application resumes today (e.g.: exempli gratia) In Pull systems, work release is based on actual demand or the actual status of the downstream customers May cause long delivery lead times Acts reactively e.g. Making a specific resume for a company after talking to the recruiter
Push/Pull View of Supply Chains Procurement, Manufacturing and Replenishment cycles Customer Order Cycle Customer Order Arrives Push-Pull boundary PUSH PROCESSES PULL PROCESSES
Examples of Supply Chains Dell / Compaq Dell buys some components for a product from its suppliers after that product is purchased by a customer. Extreme case of a pull process Zara, Spain’s answer to Italy’s Benetton Sells apparel with a short design-to-sale cycle, avoids markdowns.
SCM Strategy
Mission-Strategy-Tactics- Decisions Mission, Mission statement The reason for existence of an organization Strategy A plan for achieving organizational goals Tactics The actions taken to accomplish strategies Operational decisions Day to day decisions to support tactics
Life Strategy for Ted Ted is an undergrad. He would like to have a career in business, have a good job, and earn enough income to live comfortably Mission: Live a good life Goal: Successful career, good income Strategy: Obtain a master’s degree Tactics: Select a college and a concentration Operations: Register, buy books, take courses, study, graduate, get a job
Linking SC and Business Strategy New Product Development Marketing and Sales Operations Distribution Service Finance, Accounting, Information Technology, Human Resources Competitive (Business) Strategy Product Development Strategy -Portfolio of products -Timing of product introductions Marketing Strategy -Frequent discounts -Coupons Supply Chain Strategy
Strategies: Product Development It relates to Technologies for future operations (via patents) and Set of products/services Be the technology leader IBM workstations Offer many products Dell computers Offer products for locals Tata’s Nano at $2500=100000 rupees Production at Singur, West Bengal, India; l x w x h=3.1 x 1.5 x 1.6 meters; Top speed: 105km/hr; Engine volume 623 cc; Mileage 50 miles/gallon; Annual sales target 200,000.
Strategies Marketing and sales strategy relates to positioning, pricing and promotion of products/services e.g. Never offer more than 40% discount e.g. EDLP = every day low price At Wal-Mart e.g. Demand smoothing via coupons BestBuy Supply chain management strategy relates to procurement, transportation, storage and delivery e.g. Never use more than 1 supplier for every input e.g. Never expedite orders just because they are late e.g. Always use domestic suppliers within the sales season not in advance.
Fitting the SC to the customer or vice versa? Understand the customer Wishes Understand the Capabilities of your SC Match the Wishes with the Capabilities Challenge: How to meet extensive Wishes with limited Capabilities?
Achieving Strategic Fit: Consistent SCM and Competitive strategies Fit SC to the customer Understanding the Customer Range of demand, Production lot size, seasonal products Response time, Service level, product availability Product variety Innovation Accommodating quality Implied (Demand) Uncertainty for SC Implied trouble for SC
Contributors to Implied Demand Uncertainty Low High Price Responsiveness Customer Need Implied Demand Uncertainty Commodities Detergent Long lead time steel Customized products High Fashion Clothing Emergency steel, for maintenance/replacement Short lead times, product variety, distribution channel variety, high rate of innovation and high customer service levels all increase the Implied Demand Uncertainty
Loosing the strategic fit: Webvan Webvan started a merger with HomeGrocer in Sept 2000 and completed in May 2001. Declared bankruptcy in July 2001. Why? “Webvan was so behemoth that could deliver anything to anyone anywhere that it lost sight of a more mundane task: pleasing grocery customers day after day”. Short to midterm cash mismanagement. Venture capital of $1.2 B run out. Merger costs: duplicated work force, integration of technology, realignment of facilities. Peapod has the same business model but more focused in terms of service and locations. It actually survives with its parent company Royal Ahold’s (Dutch Retailer) cash. Delivers now at a fee of $6.95 within a day.
Top 10 Retailers Reported in 2008 – First 4 Source www.deloitte.com/dtt/cda/doc/content/dtt_2008globalpowersofretailing.pdf
Top 10 Retailers Reported in 2008 – First 5-10
Big retailers’ Strategy Wal-Mart: Efficiency Target: More quality and service Carrefour: International, ambiance K-Mart: Confused. Squeezed between Target and Wal-Mart Reliance on coupon sales Do coupons stabilize or destabilize a Supply chain? K-Mart and Sears merged in November 2004. Now called Sears Holdings. K-Mart gets cash Sears gets presence outside malls
Other Factors Multiple products in a SC. Multiple customers for a given product Separate supply chains or Tailored supply chains e.g. Barnes and Noble: Retailing and/or e-tailing Product and/or customer classes e.g. UTD library loans books for 6 months (2 weeks) to faculty (students) Customer segmentation by pricing Competitors: more, faster and global UTD online programs compete globally Product life cycle (shortening) SCM strategy moves toward efficiency and low implied uncertainty as products age e.g. Air travel is becoming more efficient e.g. Southwest airlines lead the drive for efficiency e.g. Airbus announced A380 accommodating 555-800 people on Jan 17, 2005. e.g. Flat screen TV producer of AU Optronics of Taiwan was looking for ways to make its SC more efficient in June 2004. Replacement sales Selling to replace broken units. e.g. AC replacement is about 50% of the market. Macroeconomic factors for visibility Forecasting Home Depot sales from S&P 500 price index. Positive correlation is detected.
Integration Integration is the central theme in SCM Building synergiesby integrating business functions, departments and companies
Supply Chain Drivers and Obstacles
Drivers of Supply Chain Performance Efficiency Responsiveness Inventory Transportation Facilities Information Supply chain structure Logistical Drivers How to achieve Sourcing Pricing Cross- Functional Drivers
1. Inventory Convenience: Cycle inventory No customer buys eggs one by one Unstable demand: Seasonal inventory Bathing suits Xmas toys and computer sales Randomness: Safety inventory Pipeline inventory Work in process or transit
Little’s law Long run averages = Expected values I = R . T I=Pipeline inventory; R=output per time=throughput; T=delay time=flow time Flow time? Thruput? Pipeline (work in process) Inventory? 10/minute Spend 1 minute
2. Transportation Air Truck Rail Ship Pipeline Electronic
3. Facilities Production Flexible vs. Dedicated Flexibility costs Production: Remember BMW: “a sports car disguised as a sedan” Service: Can your instructor teach music as well as SCM? Sports: A playmaker who shoots well is rare. Inventory-like operations: Receiving, Prepackaging, Storing, Picking, Packaging, Sorting, Accumulating, Shipping Job Lot Storage: Need more space. Reticle storage in fabs. Crossdocking: Wal-Mart
4. Information Role in the supply chain The connection between the various stages in the supply chain Crucial to daily operation of each stage in a supply chain E.g., production scheduling, inventory levels Role in the competitive strategy Allows supply chain to become more efficient and more responsive at the same time (reduces the need for a trade-off) Information technology Andersen Windows Wood window manufacturer, whose customers can choose from a library of 50,000 designs or create their own. Customer orders automatically sent to the factory.
Characteristics of the Good Information Information Global Scope Coordinated Decisions Supply Chain Success Strategy Analytical Models $$$ Information  Accurate?  Accessible?  Up-to-date?  In the Correct form? » If not, database restricted ability. How difficult is it to import data into SAP?
Quality of Information Information drives the decisions: Good information means good decisions IT helps: MRP, ERP, SAP, EDI Relevant information? How to use information?
Information Technology in a Supply Chain: Legacy Systems Supplier Customer Retailer Distributor Manufacturer Strategic Planning Operational
Information Technology in a Supply Chain: ERP Systems Supplier Customer Retailer Distributor Manufacturer Strategic Planning Operational ERP Potential ERP Potential ERP
Information Technology in a Supply Chain: Analytical Applications Supplier Customer Retailer Distributor Manufacturer Strategic Planning Operational Supplier Apps SCM MES Dem Plan Transport execution & WMS APS Transport & Inventory Planning CRM/SFA
ERP Systems Wider focus Push (MRP) versus Pull (demand information transmitted quickly throughout the supply chain) Real-time information Coordination and Information sharing Transactional IT Expensive and difficult to implement About 25% of ERP installations are cancelled within a year About 70% of ERP installations go over the budget
IT Push 0 100 200 300 400 500 1965 1973 1981 1989 1997 IT investment($B)
5. Sourcing Role in the supply chain Set of processes required to purchase goods and services in a supply chain Supplier selection, single vs. multiple suppliers, contract negotiation Role in the competitive strategy Sourcing is crucial. It affects efficiency and responsiveness in a supply chain In-house vs. outsource decisions- improving efficiency and responsiveness Cisco sources: Low-end products (e.g. home routers) from China. Components of sourcing decisions In-house versus outsource decisions Supplier evaluation and selection Procurement process: Every department of a firm buy from suppliers independently, or all together.
6. Pricing Role in the supply chain Pricing determines the amount to charge customers in a supply chain Pricing strategies can be used to match demand and supply Price elasticity: Do you know yours? Role in the competitive strategy Use pricing strategies to improve efficiency and responsiveness Low price and low product availability; vary prices by response times Amazon: Faster delivery is more expensive Components of pricing decisions Pricing and economies of scale Everyday low pricing versus high-low pricing Fixed price versus menu pricing, depending on the product and services Packaging, delivery location, time, customer pick up Bundling products; products and services
Considerations for Supply Chain Drivers Driver Efficiency Responsiveness Inventory Cost of holding Availability Transportation Consolidation Speed Facilities Consolidation / Dedicated Proximity / Flexibility Information Low cost/slow/no duplication High cost/ streamlined/reliable Sourcing Low cost sources Responsive sources Pricing Constant price Low-high price
Major Obstacles to Achieving Fit SC is big: Variety of products/services Spoiled customer Multiple owners (Procurement, Production, Inventory, Marketing) / multiple objectives Globalization Local optimization and lack of global fit
Dealing with Multiple Owners / Local Optimization Information Coordination Information sharing / Shyness / Legal and ethical issues Contractual Coordination Mechanisms to align local objectives with global ones Coordination with (real) options Rare in the practice Without coordination, misleading reliance on metrics: Average safety inventory, Average incoming shipment size, Average purchase price of raw materials, Revenue Major Obstacles to Achieving Fit
Major obstacles to achieving fit Instability and Randomness: Increasing product variety Shrinking product life cycles Customer fragmentation: Push for customization, segmentation Fragmentation of Supply Chain ownership: Globalization Increasing implied uncertainty
Common problems Lack of relevant SCM metrics: How to measure responsiveness? How to measure efficiency, costs, worker performance, etc? Poor inventory status information Theft: Major problem for furniture retailers. Transaction errors: Retailers with inaccurate inventory records for 65% of SKUs Information delays, dated information, incompatible info. systems Misplaced inventory: 16% of items cannot be found at a major retailer Spoilage: active ingredients in the products are losing their properties Product quality and yield Lack of visibility in SCs Do you know the inventory your distribution centers hold? Do you know the inventory your fellow retailer holds?
Common problems Poor delivery status information Not knowing the order status Poor IT design Unreliable, duplicate data Security problems: too much or too little Ignoring uncertainties “The flight from uncertainty and ambiguity is so motivated that we often create pseudocertainty.” Nitin Nohra, HBR February 2006 issue, p.40. Internal customer discrimination Giving lower priority to internal customers than external customers Poor integration Elusive inventory costs Accounting systems do not capture opportunity costs SC-insensitive product design
Seven Eleven Japan (SEJ) A Case Study
Factual Information on Seven Eleven Japan (SEJ) Largest convenience store in Japan with market value of $95 B. The third largest retail company in the world after Wal-Mart and Home Depot. Established in 1974. In 2000, total sales $18,000 M, profit $620 M. Average inventory turnover time 7-8.5 days. Stock value increased by 3000 times from 1974 to 2000. In 1985, there were 2000 stores in Japan, increasing by 400-500 per year. Return on equity 14% over 2000-2004. A SEJ store is about the half the size of a US 7-eleven store, that is about 110 m2. Sales: Products 32.9% Processed food: drinks, noodles, bread and snacks 31.6% Fast food: rice ball, box lunch and hamburgers 12.0% Fresh food: diary products 25.3% Non-food: magazines, ladies stockings and batteries. Services: Utility bill paying, installment payments for credit companies, ATMs, photocopying
More on SEJ More factual info: Average sales about twice of an average US store SKU’s offered in store: Over 3,000 (change by time of day, day of week, season) Virtually no storage space No food cooking at the stores Japanese Images of Seven Eleven: Convenient Cheerful and lively stores Many ready made dinner items I buy Famous for its great boxed lunch and dinner - On weekends, when I was single, I went to buy lunch and dinner SC strategy: Micro matching of supply and demand (by location, time of day, day of week, season)
Information Analysis of POS Data Analysis of Sales for product categories over time SKU (stock keeping unit) Waste or disposal 10 day (or week) sales trend by SKU Sales trends for new product In the early 1990s, half-prepared fresh noodle sales were going up, new fresh noodle products were quickly developed Sales trend by time and day Different sales patterns for different sizes of milk at different times of the day results in rearrangement of the milks in the fridge. Extreme store micromanagement. Let us speculate: Flavored milks are put in front of the pure milks in the evening (or the morning?). List of slow moving items About half of 3000 SKUs are replaced by new ones every year
Facilities Strategy Limited storage space at stores which have only 125-150 m2 space Frequent and small deliveries to stores Deliveries arrive from over 200 plants. Products are grouped by the cooling needs Combined delivery system: frozen foods, chilled foods, room temperature and hot foods. Such product groups are cross-docked at distribution centers (DC). Food DCs store no inventory. A single truck brings a group of products and visits several stores within a geographical region Aggregation: No supplier (not even coke!) delivers direct The number of truck deliveries per day is reduced by a factor of 7 from 1974 to 2000. Still, at least 3 fresh food deliveries per day. Goods are received faster with the use of scanners. Have many outlets, at convenient locations, close to where customers can walk Focus on some territories, not all: When they locate in a place they blanket (a.k.a. clustering) the area with stores; stores open in clusters with corresponding DC’s. 844 stores in the Tokyo region; Seven Eleven had stores in 32 out of 47 prefectures in 2004. No stores in Kobe. Success rate of franchise application <= 1/100
The Present and the Future Is food preparation a good idea at 7-eleven locations? e.g. Compare microwave heating vs. salad preparation. Why SEJ does not allow direct delivery from suppliers to retailers? Point out which of the following strategies can also be used in US (or Taiwan) Information strategy Facilities strategy Discuss the differences between the Japanese and US (or Taiwanese) consumers with regard to Frequency and amount of grocery purchase Use of credit cards vs. cash for purchase 7-eleven inventory turnover rate is 50 in Japan and 19 in the USA. 7-eleven growing rapidly in the US so it aims to be a web depot in both the US and Japan. Does this make sense from a supply chain perspective? Cost vs. Responsiveness Business strategy What is the risk of micro-matching strategy? No direct deliveries to SEJ, what is the potential risk of this strategy if used in the USA?
The Savvy Employees Who Saved 7-Eleven From Bankruptcy
Lecture Outline • What Operations and Supply Chain Managers Do • Operations Function • Evolution of Operations and Supply Chain Management • Globalization and Competitiveness • Operations • Strategy and Organization of the Text • Learning Objectives for This Course 1-70
What Operations and Supply Chain Managers Do • What is Operations Management? ■ design, operation, and improvement of productive systems • What is Operations? ■ a function or system that transforms inputs into outputs of greater value • What is a Transformation Process? ■ a series of activities along a value chain extending from supplier to customer ■ activities that do not add value are superfluous and should be eliminated 1-71
• Physical: as in manufacturing operations • Locational: as in transportation or warehouse operations • Exchange: as in retail operations • Physiological: as in health care • Psychological: as in entertainment • Informational: as in communication Transformation Process 1-72
INPUT •Material Operations as a Transformation Process •Machines •Labor •Management •Capital TRANSFORMATION PROCESS OUTPUT •Goods •Services Feedback & Requirements 1-73
Operations Function • Operations • Marketing • Finance and Accounting • Human Resources • Outside Suppliers 1-74
How is Operations Relevant to my Major? • Accounting • Information Technology • Management • “As an auditor you must understand the fundamentals of operations management.” • “IT is a tool, and there’s no better place to apply it than in operations.” • “We use so many things you learn in an operations class— scheduling, lean production, theory of constraints, and tons of quality tools.” 1-75
How is Operations Relevant to my Major? (cont.) • Economics • “It’s all about processes. I live by flowcharts and Pareto analysis.” • “How can you do a good job marketing a product if you’re unsure of its quality or delivery status?” • “Most of our capital budgeting requests are from operations, and most of our cost savings, too.” • Marketing 1-76 • Finance
Evolution of Operations and Supply Chain Management • Craft production ■ process of handcrafting products or services for individual customers • Division of labor ■ dividing a job into a series of small tasks each performed by a different worker • Interchangeable parts ■ standardization of parts initially as replacement parts; enabled mass production 1-77
• Scientific management ■ systematic analysis of work methods • Mass production ■ high-volume production of a standardized product for a mass market • Lean production ■ adaptation of mass production that prizes quality and flexibility Evolution of Operations and Supply Chain Management (cont.) 1-78
Historical Events in Operations Management Era Events/Concepts Dates Originator Industrial Steam engine 1769 James Watt Revolution Division of labor 1776 Adam Smith Interchangeable parts 1790 Eli Whitney Scientific Management Principles of scientific management Time and motion studies Activity scheduling chart Moving assembly line 1911 1911 1912 1913 Frederick W. Taylor Frank and Lillian Gilbreth Henry Gantt Henry Ford 1-79
Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator Human Relations Hawthorne studies 1930 Elton Mayo Motivation theories 1940s 1950s Abraham Maslow Frederick Herzberg 1960s Douglas McGregor Linear programming 1947 George Dantzig Digital computer 1951 Remington Rand Simulation, waiting line theory, decision theory, PERT/CPM 1950s Operations research groups Operations Research MRP, EDI, EFT, CIM 1960s, 1970s Joseph Orlicky, IBM and others 1-80
Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator JIT (just-in-time) 1970s Taiichi Ohno (Toyota) TQM (total quality management) 1980s W. Edwards Deming, Joseph Juran Quality Revolution Strategy and operations 1980s Wickham Skinner, Robert Hayes Business process reengineering 1990s Michael Hammer, James Champy Six Sigma 1990s GE, Motorola 1-81
Era Events/Concepts Dates Originator Internet Internet, WWW, ERP, 1990s ARPANET, Tim Revolution supply chain management Berners-Lee SAP, i2 Technologies, ORACLE E-commerce 2000s Amazon, Yahoo, eBay, Google, and others Globalization WTO, European Union, and other trade agreements, global supply chains, outsourcing, BPO, Services Science 1990s 2000s Numerous countries and companies Historical Events in Operations Management (cont.) 1-82
Evolution of Operations and Supply Chain Management (cont.) • Supply chain management ■ management of the flow of information, products, and services across a network of customers, enterprises, and supply chain partners 1-83
Globalization and Competitiveness • Why “go global”? ■ favorable cost ■ access to international markets ■ response to changes in demand ■ reliable sources of supply ■ latest trends and technologies • Increased globalization ■ results from the Internet and falling trade barriers 1-84
Globalization and Competitiveness (cont.) Hourly Compensation Costs for Production Workers Source: U.S. Bureau of Labor Statistics, 2005. 1-85
Globalization and Competitiveness (cont.) World Population Distribution Source: U.S. Census Bureau, 2006. 1-86
Globalization and Competitiveness (cont.) Trade in Goods as % of GDP (sum of merchandise exports and imports divided by GDP, valued in U.S. dollars) 1-87
Productivity and Competitiveness • Competitiveness ■ degree to which a nation can produce goods and services that meet the test of international markets • Productivity ■ ratio of output to input • Output ■ sales made, products produced, customers served, meals delivered, or calls answered • Input ■ labor hours, investment in equipment, material usage, or square footage 1-88
Productivity and Competitiveness (cont.) Measures of Productivity 1-89
Productivity and Competitiveness (cont.) Average Annual Growth Rates in Productivity, 1995-2005. Source: Bureau of Labor Statistics. A Chartbook of International Labor Comparisons. January 2007, p. 28. 1-90
Productivity and Competitiveness (cont.) Average Annual Growth Rates in Output and Input, 1995-2005 Source: Bureau of Labor Statistics. A Chartbook of International Labor Comparisons, January 2007, p. 26. Dramatic Increase in Output w/ Decrease in Labor Hours 1-91
Productivity and Competitiveness (cont.) • Retrenching ■ productivity is increasing, but both output and input decrease with input decreasing at a faster rate • Assumption that more input would cause output to increase at the same rate ■ certain limits to the amount of output may not be considered ■ output produced is emphasized, not output sold; increased inventories 1-92
• Strategy ■ Provides direction for achieving a mission • Five Steps for Strategy Formulation ■ Defining a primary task • What is the firm in the business of doing? ■ Assessing core competencies • What does the firm do better than anyone else? ■ Determining order winners and order qualifiers • What qualifies an item to be considered for purchase? • What wins the order? ■ Positioning the firm • How will the firm compete? ■ Deploying the strategy Strategy and Operations 1-93
Strategic Planning Mission and Vision Corporate Strategy Operations Strategy Marketing Strategy Financial Strategy 1-94
The Rise of China’s Shein
Order Winners and Order Qualifiers Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan Betts, Operations and Process Management, Prentice Hall, 2006, p. 47 1-96
Positioning the Firm • Cost • Speed • Quality • Flexibility 1-97
Positioning the Firm: Cost • Waste elimination ■ relentlessly pursuing the removal of all waste • Examination of cost structure ■ looking at the entire cost structure for reduction potential • Lean production ■ providing low costs through disciplined operations 1-98
Positioning the Firm: Speed • fast moves, fast adaptations, tight linkages • Internet ■ conditioned customers to expect immediate responses • Service organizations ■ always competed on speed (McDonald’s, LensCrafters, and Federal Express) • Manufacturers ■ time-based competition: build-to-order production and efficient supply chains • Fashion industry ■ two-week design-to-rack lead time of Spanish retailer, Zara 1-99
Positioning the Firm: Quality • Minimizing defect rates or conforming to design specifications; please the customer • Ritz-Carlton - one customer at a time ■ Service system is designed to “move heaven and earth” to satisfy customer ■ Every employee is empowered to satisfy a guest’s wish ■ Teams at all levels set objectives and devise quality action plans ■ Each hotel has a quality leader 1-100
Positioning the Firm: Flexibility • ability to adjust to changes in product mix, production volume, or design • National Bicycle Industrial Company ■ offers 11,231,862 variations ■ delivers within two weeks at costs only 10% above standard models ■ mass customization: the mass production of customized parts 1-101
Policy Deployment • Policy deployment ■ translates corporate strategy into measurable objectives • Hoshins ■ action plans generated from the policy deployment process 1-102
Policy Deployment Derivation of an Action Plan Using Policy Deployment 1-103
Balanced Scorecard • Balanced scorecard ■ measuring more than financial performance • finances • customers • processes • learning and growing • Key performance indicators ■ a set of measures that help managers evaluate performance in critical areas 1-104
Balanced Scorecard 1-105 Dashboard
Operations Strategy S Se er rv vi ic ce es s P Pr ro oc ce es ss s a an nd d P Pr ro od du uc ct ts s T Te ec ch hn no ol lo og gy y Capacity Human Resources Quality Facilities Sourcing Operating Systems 1-106
Learning Objectives of this Course • Gain an appreciation of strategic importance of operations and supply chain management in a global business environment • Understand how operations relates to other business functions • Develop a working knowledge of concepts and methods related to designing and managing operations and supply chains • Develop a skill set for quality and process improvement 1-107
108 Learning Objectives To understand the escalating importance of logistics and supply-chain management as crucial tools for competitiveness. To learn about materials management and physical distribution. To learn why international logistics is more complex than domestic logistics. To see how the transportation infrastructure in host countries often dictates the options open to the manager. To learn why international inventory management is crucial for success.
109 International Logistics International logistics is the design and management of a system that controls the forward and reverse flow of materials, services, and information into, through, and out of the international corporation.
110 International Logistics (cont.) Through the implementation of international logistics, the firm can implement cost-saving programs such as just-in-time (JIT), electronic data interchange (EDI), and early supplier involvement (ESI). The two phases of the movement of materials include: materials management, or the timely movement of materials, parts, and supplies. physical distribution, or the movement of the firm’s physical product to its customers.
111 Three Concepts of Business Logistics Total Cost Concept Trade-off Concept Systems Concept
112 Supply-Chain Management Supply-chain management is the integration of business processes from end user through original suppliers, that provide products, services, and information that add value for customers. Supply-chain management connects a company’s supply side with its demand side. It opens up supplier relationships for companies outside of the buyer’s domestic market.
 Any organization, anywhere in the world, offering a product or a service has a supply chain.  Products and Services are created from materials, using equipment, labor, time, money, and other resources.  Producing and delivering products and services requires Suppliers, Manufacturers, and Customers; all of which make up the links in a supply chain.  Supply chains exist in organizations that are: – Large or Small (i.e., a multinational corporation or a “mom & pop shop” on the local corner) – Public or Private (i.e., a publically traded company or a privately held company) – For-Profit or Not-for-Profit (i.e., a commercial business, government or a charitable institution) What is a Supply Chain? 11 3
Suppliers Customers Finished Material Suppliers (Tier 1) Intermediate Suppliers (Tier 2) Raw Material Suppliers (Tier 3) Wholesaler & Distributor Customers (Tier 1) Retail Customers (Tier 2) Consumers (Tier 3) Manufacturer (Your Company) Finished Product Manufacturer Internal Internal Internal External External External What is a Supply Chain? (continued)  From SUPPLIERS: Raw Material, Intermediate, and/or Finished Material Suppliers  To MANUFACTURERS: Finished Product Manufacturers (Internal and/or External)  To CUSTOMERS: Wholesalers, Distributors, Retailers and/or Consumers Each of these are “Links” in the supply chain Inbound Transportation Outbound Transportation Air Truck Rail Water Pipeline Facilitated through the use of Logistics Warehousing A supply chain consists of the flow of materials and products . . .
Think about typical products that you buy  Automobiles  Books  Candy Bars  Cell phones  Clothes / Shoes  Fast food  Laptop computers  Soft Drinks What is your favorite Candy Bar? 11 5 Do you know what goes into making it?
Candy Bar Supply Chain (Simplified) 11 6 Suppliers Customers Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores)
11 7 Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Supply Disruption Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) Supply Chain Disruption 1 What happens if there is a shortage of Cocoa Beans ??? Suppliers Customers Manufacturer
11 8 Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Supply Disruption Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) Supply Chain Disruption 2 Suddenly, you cannot get the Chocolate and Cocoa Butter that you need to make your Candy Bars Meanwhile . . . your other suppliers will continue to ship their products to you Suppliers Customers Manufacturer
11 9 Consumers Candy Bar Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Wholesalers and Distributors Retailers (Stores) Supply Disruption Supply Chain Disruption 3 Candy Bar production will be forced to stop Your customers still have inventory of candy bars that they previously purchased from you which they can continue to sell and your inventory of the other materials will start to build up Suppliers Customers Manufacturer
12 0 Consumers Candy Bar Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Wholesalers and Distributors Retailers (Stores) Supply Disruption Supply Chain Disruption 4 The disruption impacts all suppliers You are forced to cancel your orders for materials from all your suppliers until Cocoa Beans are available again Suppliers Customers Manufacturer
12 1 Consumers Candy Bar Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Wholesalers and Distributors Retailers (Stores) Supply Disruption Supply Chain Disruption 5 The disruption impacts all customers Your customers sell out all remaining inventory of candy bars which creates a TOTAL MARKET STOCKOUT Suppliers Customers Manufacturer
Candy Bar Supply Chain (Simplified) 12 2 Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) All supply chain links are interconnected and a disruption with one will likely impact all The supply chain is only as strong as its weakest link Suppliers Customers Manufacturer
Service firms offer intangible products, meaning products that cannot be physically touched. Supply Chains in the Service Industry It is not just products . . . services have a supply chain as well. 12 3 Many services require the use of Facilitating Goods which are tangible elements that are used along with the service provided. These items need to be purchased, transported, received, and warehoused in order to provide the service activity, and each has a supply chain.
12 4 It is the coordination of a network of otherwise independent trading partners creating a desired product or service, and moving it from suppliers, through manufacturing, and out to customers when and where they want it. Supply Chain Management is the way business gets done. It is the execution process of any business. What is a Supply Chain Management?
Supply Chain Management accounts for $1.4 trillion (≈8%) of the total U.S. economy ---> annually. Companies have been expanding globally and speeding up every link in the supply chain to stay competitive. This has created a significant and growing shortage of supply chain talent --- which translates to JOBS !!! Current trends will continue to raise the bar in supply chain management, and by extension, the skills required:  Continued and accelerated pace of globalization  Expansion of e-Commerce  Heightened focus on supply chain risk  Widespread adoption of new technologies and innovations Talent Shortage in Supply Chain Management
Supply Chain Management is a skilled profession with cutting edge technologies and major innovations happening at an accelerated pace. Just a few examples: Technology and Innovation
Logistics: Warehousing, Transportation, and Distribution Finished Material Suppliers (Tier 1) Wholesaler & Distributor Customers (Tier 1) Finished Product Manufacturer Intermediate Suppliers (Tier 2) Raw Material Suppliers (Tier 3) Retail Customers (Tier 2) Consumers (Tier 3) Purchasing Strategic Sourcing Ethical and Sustainable Sourcing Supplier Relationship Management Customer Service Forecasting and Demand Planning Distribution Channel Management Customer Relationship Management Planning & Scheduling Operations Management Quality Assurance International Trade Risk Management Project Management Typical Supply Chain Career Areas Suppliers Customers Manufacturer Inbound Transportation Warehousing Outbound Transportation Distribution Inventory Management Material Handling Abundant job opportunities across all of these functional areas
Careers in Supply Chain Management Top 10 things you can expect from a career in Supply Chain Management 1. Job Availability (entry level and advanced) 2. Accelerated Growth and Advancement opportunities 3. Job Security 4. Excellent Income and Compensation packages 5. Career Contentment 6. Supply chain jobs available in every Industry and Worldwide 7. Work Location choices. Your supply chain skills are portable! 8. Travel and Relocation opportunities 9. Opportunities to Specialize in supply chain Disciplines & Sectors 10. Innovation and cutting edge Technologies Recent survey = 79% content with their career
129 Transportation Infrastructure A firm’s logistics platform is determined by a location’s ease and convenience of market reach under favorable cost circumstances. The public sector’s investment priorities, safety regulations, tax incentives, and transport policies can have major effects on the logistics decisions of firms. The logistics manager must learn about existing and planned infrastructures abroad and at home and factor them into the firm’s strategy.
130 Vessels Used in Ocean Shipping Liner Service Bulk Service Tramp Service
131 Airfreight Airfreight is available to and from most countries, including the developing world. Forty percent of the world’s manufactured travel by air. Items that are high-value or high in density tend to travel by air.
132 Considerations for Selecting a Mode of Transport Predictability Transit Time Cost Non-economic Factors
133 Export Documentation A bill of lading is a contract between the exporter and the carrier indicating that the carrier has accepted responsibility for the goods and will provide transportation in return for payment. A commercial invoice is a bill for the goods stating basic information about the transaction, including a description of the merchandise, total cost of the goods sold, addresses of the shipper and seller, and delivery and payment terms. A freight forwarder specializes in handling export documentation.
134 International Inventory Issues Inventories tie up a major portion of corporate funds, therefore proper inventory policies should be a major concern to the international logistician. Just-in-time inventory policies minimize the volume of inventory by making it available only when needed. The purpose of establishing inventory systems are: to maintain product movement in the delivery pipeline to have a cushion to absorb demand fluctuations
135 Three Factors that Decide the Level of Inventory Order Cycle Time Desired Customer Service Levels Use of Inventories as a Strategic Tool
136 International Packaging Issues Packaging is instrumental in getting the merchandise to the destination in a safe, presentable condition. Because of the added stress of international shipping, packaging that is adequate for domestic shipping may be inadequate for international shipping. Packaging considerations that should be taken into account are environmental conditions and weight. One solution to the packaging problem has been the development of inter-modal containers. Cost attention must be paid to international packaging.
137 Storage Facilities A stationary period is involved when merchandise becomes inventory stored in warehouses. The location decision addresses how many distribution centers to have and where to locate them. Storage facilities abroad can differ in availability and quality. The logistician should analyze international product sales and then rank order products according to warehousing needs.
138 Special Trade Zones Foreign trade zones are areas where foreign goods may be held or processed and then re-exported without incurring duties. Trade zones can be useful as transshipment points to reduce logistics cost and redesign marketing approaches. Governments and firms benefit from foreign trade zones.
139 Export Processing Zones and Economic Zones In export processing zones, special rules apply that are different in other regions of the country. These zones usually provide tax-free and duty-free treatment for production facilities whose output is destined abroad. The maquiladoras of Mexico are one example of a program that permits firms to take advantage of sharp differentials in labor costs. Through the creation of special economic zones, the Chinese government has attracted many foreign investors bringing in millions of dollars.
140 Centralized Logistics Management In international logistics, the existence of a headquarters staff that retains decision-making power over logistics is important. To avoid internal problems, both headquarters staff and local management should report to one person. This individual can contribute an objective view when inevitable conflicts arise in international logistics coordination.
141 Decentralized Logistics Management When a firm serves many diverse international markets, total centralization might leave the firm unresponsive to local adaptation needs. If each subsidiary is made a profit center in itself, each one carries the full responsibility for its performance. Once products are within a specific market, increased input from local logistics operations should be expected and encouraged.
142 Outsourcing Logistics Services The systematic outsourcing of logistics capabilities is a third option. By collaborating with transportation firms, private warehouses, or other specialists, corporate resources can be concentrated on the firm’s core product. One-stop logistics allows shippers to buy all the transportation modes and functional services from a single carrier.
143 The Supply Chain and the Internet Because of the internet, firms are able to conduct many more global comparisons among suppliers and select from a wider variety of choices. When customers have the ability to access a company through the internet, the company must be prepared for 24-hour order-taking and customer service. For all countries, but particularly in developing nations, the issue of universal access to the internet is crucial.
144 Logistics and Security After the terrorist attacks of 2001, companies have to deal with the fact that the pace of international transactions has slowed down and that formerly routine steps will now take longer. Logistics systems and modern transportation systems are often the targets of attacks. The need to institute new safeguards for international shipments will affect the ability of firms to efficiently plan their international shipments.
145 Logistics and the Environment Since environmental laws and regulations differ across the globe, the firm’s efforts need to be responsive to a wide variety of requirements. Reverse distribution systems are instrumental in ensuring that the firm not only delivers the product to the market, but also can retrieve it from the market for subsequent use, recycling, or disposal. Companies need to learn how to simultaneously achieve environmental and economic goals.
How Supply Chain Bottlenecks are Creating Environmental Issues
Understanding Distribution in the Supply Chain: Role and Significance
Where Did the Process of Distribution in Supply Come From? ▶ The process of distribution in supply can be traced back to the early days of commerce. As trade between different regions and cultures began to increase, the need for a system to distribute goods and services became apparent
The Evolution of Distribution in Supply ▶ The growth of trade: As trade between different regions and cultures has increased, the need for a system to distribute goods and services has become more important. ▶ The development of new transportation technologies: The development of new transportation technologies, such as railroads and steamships, has made it possible to move goods more quickly and efficiently. ▶ The growth of cities: The growth of cities has created a demand for new distribution methods, as people begin to live farther from where their goods are produced. ▶ The rise of globalization: The rise of globalization has led to even more changes in distribution, as businesses need to find ways to distribute their products to a global market.
The Future of Distribution in Supply ▶ The continued growth of e- commerce: E-commerce is growing rapidly, and this is likely to have a significant impact on the way goods and services are distributed. ▶ The development of new technologies: The development of new technologies, such as drones and self-driving vehicles, is likely to revolutionize the way goods and services are distributed. ▶ The changing needs of customers: The needs of customers are constantly changing, and businesses need to be able to adapt their distribution strategies to meet these needs.
The Rise and Fall of Montgomery Ward ▶ Montgomery Ward was one of the first major retailers in the United States. The company was founded in 1872 by Aaron Montgomery Ward, and it quickly became a leader in the mail- order business. ▶ Ward's innovation was to offer a wide variety of products at discounted prices through a catalog that was distributed nationwide. ▶ Ward's business model was very successful, and the company grew rapidly during the Industrial Revolution. By the early 1900s, Montgomery Ward was one of the largest retailers in the United States.
What Montgomery Ward Did Well ▶ Offered a wide variety of products at discounted prices through its catalog ▶ Catalog was also very well-designed
What Montgomery Ward Did Not Do Well ▶ Failed to adapt to the changing retail landscape. ▶ Focused on low prices, which led to a decline in customer satisfaction and a loss of market share
Where Montgomery Ward Is Today ▶ The Montgomery Ward brand is now owned by Sears Holdings Corporation. Sears has been struggling financially in recent years, and it is unclear whether the Montgomery Ward brand will be revived.
Conclusion ▶ The process of distribution in supply has come a long way since its early days. Today, it is a complex and sophisticated field that is essential to the smooth functioning of the global economy. As businesses continue to grow and expand, the need for efficient and effective distribution systems will only become more important.
Definition of Distribution in the Supply Chain ▶ Warehousing: Goods are stored in warehouses until they are needed to be shipped to customers. ▶ Transportation: Goods are transported from the warehouse to the customer using a variety of methods, such as trucks, ships, and airplanes. ▶ Logistics: Logistics is the process of managing the flow of goods through the distribution system. This includes activities such as inventory management, order fulfillment, and transportation scheduling. ▶ Customer service: Customer service is the process of interacting with customers to ensure that they are satisfied with the distribution process. This includes activities such as answering questions, resolving problems, and providing feedback.
Role of Distribution in the Supply Chain ▶ Customer satisfaction: Customers expect to receive products when they need them. If products are not delivered on time, customers may become dissatisfied and switch to a competitor. ▶ Profitability: Efficient distribution can help to reduce costs and increase profits. This is because it can help to reduce inventory levels, improve transportation efficiency, and provide better customer service. ▶ Competitive advantage: Efficient distribution can give businesses a competitive advantage. This is because it can help businesses to deliver products more quickly and cheaply than their competitors.
Ensuring Smooth Flow of Products to Meet Customer Demands Efficiently ▶ The location of customers: Businesses need to ensure that they have warehouses and distribution centers located in close proximity to their customers. This will help to reduce transportation costs and improve delivery times. ▶ The type of product: The type of product being distributed will also affect the distribution strategy. For example, perishable goods will need to be distributed more quickly than non-perishable goods. ▶ The needs of customers: Businesses need to understand the needs of their customers in order to provide them with the best possible distribution experience. This includes factors such as delivery speed, delivery options, and customer service.
Conclusion ▶ Distribution is a critical part of the supply chain. It is responsible for getting goods and services from the producer to the consumer in a timely and efficient manner. By understanding the role of distribution and the factors that affect it, businesses can develop distribution strategies that ensure a smooth flow of products to meet customer demands efficiently.
Functions and Responsibilities of a Distributor ▶ Inventory management: Distributors are responsible for managing the inventory of products that they sell. This includes ordering the correct amount of product, storing it in a safe and secure location, and tracking inventory levels. ▶ Order fulfillment: Distributors are responsible for fulfilling orders from customers. This includes picking the products from the warehouse, packing them, and shipping them to the customer. ▶ Customer service: Distributors provide customer service to customers who have questions or problems with their orders. This includes answering questions, resolving problems, and providing feedback. ▶ Marketing and sales: Distributors may also be responsible for marketing and selling products to retailers or other businesses. This includes developing marketing plans, generating leads, and closing sales.
Importance of Distributors in Expanding Market Reach ▶ Distributors can play an important role in expanding the market reach of manufacturers. They can help to reach a broader customer base by providing products to retailers in different geographic areas. They can also help to expand market coverage by providing products to retailers in different channels, such as online or brick-and-mortar stores.
Understanding the Difference Between Distribution and Logistics ▶ Distribution refers to the process of moving products from the manufacturer to the customer. ▶ Logistics, on the other hand, refers to the overall management of the flow of goods and services. This includes activities such as transportation, warehousing, and inventory management.
Distribution's Focus on Product Delivery and Customer Satisfaction ▶ Distribution places emphasis on delivering products to customers and meeting customer demands efficiently. ▶ This includes activities such as order fulfillment, customer service, and inventory management. ▶ Distributors strive to ensure that customers receive the products they need when they need them. ▶ Distributors also strive to provide excellent customer service, such as answering questions and resolving problems quickly.
Conclusion ▶ Distributors play an important role in the supply chain by providing a link between producers and consumers. ▶ Distributors help to ensure that products are available when and where customers need them, and they can also provide valuable services such as inventory management and order fulfillment. ▶ By focusing on product delivery and customer satisfaction, distributors can help manufacturers to increase sales and improve their reputation.
Additional Information ▶ Marketing and sales support: Distributors may help manufacturers to develop marketing plans, generate leads, and close sales. ▶ Financial services: Distributors may offer financial services to manufacturers, such as credit, financing, and inventory management. ▶ Technical support: Distributors may provide technical support to manufacturers, such as product training and troubleshooting
Impact of Logistics' Emphasis on Transportation, Warehousing, and Inventory Management ▶ Logistics is the process of planning, organizing, and managing the flow of goods and services from the point of origin to the point of consumption. It encompasses a wide range of activities, including transportation, warehousing, inventory management, and customer service. ▶ Transportation is the movement of goods from one location to another. It is a critical part of logistics, as it determines how quickly and efficiently goods can be delivered to customers. There are a variety of transportation options available, each with its own advantages and disadvantages. ▶ Warehousing is the storage of goods in a secure facility. It is important for businesses to have enough warehouse space to store their products, as well as the right equipment to handle the loading and unloading of goods. ▶ Inventory management is the process of ensuring that the right amount of goods is available in the right place at the right time. This is important for businesses to avoid stockouts, which can lead to lost sales, and to avoid overstocking, which can lead to unnecessary costs.
Importance of Effective Distribution Management ▶ Supply chain performance: Effective distribution management can help to improve supply chain performance by reducing lead times, improving inventory turns, and increasing customer service levels. ▶ Cost control: Effective distribution management can help to control costs by optimizing transportation routes, negotiating favorable freight rates, and managing inventory levels. ▶ Customer satisfaction: Effective distribution management can help to improve customer satisfaction by ensuring that products are delivered on time, in good condition, and at the right price.
Impact on Supply Chain Performance and Customer Satisfaction ▶ Reduce lead times: By optimizing transportation routes and managing inventory levels, well-managed distribution can help to reduce lead times, which can improve customer satisfaction. ▶ Improve inventory turns: By managing inventory levels effectively, well-managed distribution can help to improve inventory turns, which can reduce costs. ▶ Increase customer service levels: By ensuring that products are delivered on time, in good condition, and at the right price, well-managed distribution can help to increase customer service levels.
Role of Distribution Management in Cost Control and Optimization ▶ Optimize transportation routes: By optimizing transportation routes, well-managed distribution can help to reduce transportation costs. ▶ Negotiate favorable freight rates: By negotiating favorable freight rates, well-managed distribution can help to reduce transportation costs. ▶ Manage inventory levels: By managing inventory levels effectively, well-managed distribution can help to reduce inventory carrying costs.
Conclusion ▶ Logistics is a complex and essential part of the supply chain. Effective distribution management can help to optimize supply chain performance, cost control, and customer satisfaction. By emphasizing transportation, warehousing, and inventory management, logistics can support the distribution process and help businesses achieve their goals.
Additional Information ▶ Increase market share: By providing superior customer service and meeting customer demand, well-managed distribution can help businesses to increase market share. ▶ Improve brand reputation: By delivering products on time and in good condition, well-managed distribution can help to improve brand reputation. ▶ Reduce risk: By managing inventory levels effectively, well- managed distribution can help to reduce risk.
Improved Inventory Control and Demand Forecasting ▶ By tracking inventory levels and sales data, distribution managers can identify trends and patterns that can be used to forecast future demand. This information can then be used to ensure that the right amount of inventory is on hand to meet customer demand. ▶ By using data analytics, distribution managers can identify and optimize distribution routes and schedules. This can help to reduce transportation costs and improve delivery times, which can lead to improved inventory turnover. ▶ By working closely with suppliers, distribution managers can ensure that there is a smooth flow of goods throughout the supply chain. This can help to reduce the risk of stockouts and ensure that customers receive their orders on time.
Better Coordination Between Suppliers, Manufacturers, and Retailers ▶ Distribution management can also foster better coordination among supply chain partners. This can be done by sharing information about inventory levels, sales data, and demand forecasts. By working together, supply chain partners can ensure that goods are delivered to the right place at the right time, which can lead to improved efficiency and profitability.
Enhanced Customer Service and Satisfaction ▶ By ensuring that products are delivered on time and in good condition, distribution managers can help to improve customer satisfaction. This can lead to repeat business and increased sales. ▶ By providing accurate information about product availability, distribution managers can help customers to make informed purchasing decisions. This can help to reduce customer frustration and improve the overall customer experience. ▶ By offering flexible delivery options, distribution managers can meet the needs of different customers. This can help to improve customer satisfaction and loyalty.
Optimal Use of Resources and Reduced Operating Costs ▶ Optimizing transportation routes and schedules. This can help to reduce transportation costs and improve delivery times. ▶ Managing inventory levels effectively. This can help to reduce inventory carrying costs and improve inventory turnover. ▶ Using data analytics to identify and optimize distribution processes. This can help to reduce waste and improve efficiency.
Conclusion ▶ Effective distribution management can play a vital role in improving inventory control, demand forecasting, coordination among supply chain partners, customer service, and satisfaction. By optimizing the flow of goods and services throughout the supply chain, distribution managers can help businesses to reduce costs, improve efficiency, and increase profitability.
Additional Information ▶ Increase market share: By providing superior customer service and meeting customer demand, well- managed distribution can help businesses to increase market share. ▶ Improve brand reputation: By delivering products on time and in good condition, well-managed distribution can help to improve brand reputation. ▶ Reduce risk: By managing inventory levels effectively, well-managed distribution can help to reduce risk.
Supply Chain Complexity and Global Operations ▶ Inventory management: Managing inventory in a global supply chain can be complex, as businesses must consider factors such as different product regulations, varying demand patterns, and longer lead times. ▶ Demand fluctuations: Demand for products can fluctuate rapidly in a global market, which can make it difficult to forecast demand and ensure that the right amount of inventory is on hand. ▶ Transportation and logistics: Transportation and logistics can be more challenging in a global supply chain, as businesses must often deal with multiple carriers and different shipping regulations. ▶ Maintaining service quality and consistency: Maintaining service quality and consistency can be difficult in a global supply chain, as businesses must often deal with different cultures and languages.
Inventory Management and Demand Fluctuations ▶ The challenges of inventory management and demand fluctuations are closely related. When demand for a product fluctuates, businesses must adjust their inventory levels accordingly.
Inventory Management and Demand Fluctuations ▶ Inventory management is the process of planning, organizing, and controlling the flow of goods and materials from the point of production to the point of consumption. Demand fluctuations refer to the changes in the demand for a product or service over time.
Impact of Inventory Management Challenges and Demand Fluctuations on Distribution Activities ▶ The impact of inventory management challenges and demand fluctuations on distribution activities can be significant. ▶ Demand fluctuations can also have a significant impact on distribution activities.
Strategies for Managing Inventory and Demand Fluctuations ▶ Demand forecasting: Businesses can use demand forecasting to predict future demand for their products. This information can then be used to adjust inventory levels accordingly. ▶ Just-in-time (JIT) inventory management: JIT inventory management is a system where businesses only order the amount of inventory they need to meet immediate demand. This can help businesses to reduce inventory costs and improve efficiency. ▶ Demand pooling: Demand pooling is a strategy where businesses pool their demand for a product or service. This can help businesses to get better pricing from suppliers and improve efficiency. ▶ Flexible manufacturing: Flexible manufacturing is a system where businesses can quickly and easily change the production of a product to meet changing demand. This can help businesses to adapt to demand fluctuations and avoid stockouts.
Inventory management and demand fluctuations are important challenges that businesses must face. By using the strategies outlined above, businesses can manage these challenges and ensure that they have the right amount of inventory to meet customer demand.
Transportation and Logistics Challenges ▶ Transportation and logistics can also be challenging in a global supply chain. Businesses must often deal with multiple carriers and different shipping regulations. This can make it difficult to track shipments and ensure that they arrive on time.
Maintaining Service Quality and Consistency ▶ Maintaining service quality and consistency is important for any business, but it can be especially challenging in a global supply chain.
186 Operations Management = OM Management of ANY activities/process that create goods and provide services Exemplary Activities: Forecasting, Scheduling, Quality management Why to study OM At a typical manufacturing company Profit 5% OM Cost 21% Marketing Cost 26% Manufacturing Cost 48%
187 The management of systems or processes that create goods and/or provide services Organization Finance Operations Marketing The distinct –active- role of operations: Inputs become Outputs after some Transformation Operations Management = OM
MGT 236 188 Typical Organization Chart
189 Operations example in Manufacturing: Food Processing INPUTS PROCESS OUTPUTS Raw vegetables Cleaning Clean vegetables Metal sheets Cutting/Rolling/Welding Cans Energy, Vegetables Cutting Cut vegetables Energy, Water, Vegetables Cooking Boiled vegetables Energy, Cans, Boiled vegetables Placing Can food
190 Types of Operations Operation Examples Goods producing Farming, mining, construction Storage/transportation Warehousing, trucking, mail, taxis, buses, hotels, location Exchange Trade, retailing, wholesaling, renting, leasing, loans Entertainment Radio, movies, TV, concerts, recording Communication Newspapers, journals, magazines, radio, TV, telephones, satellite
191 Why OM? Core of all business organizations Many areas interrelated with OM activities Management of operations is critical to create and maintain competitive advantages
192 Organization of Businesses Three basic functions Operations/Production Goods oriented (manufacturing and assembly) Service oriented (health care, transportation and retailing) Value-added (the essence of the operations functions) Finance-Accounting Budgets (plan financial requirements) Economic analysis of investment proposals Provision of funds (the necessary funding of the operations)
193 Organization of Businesses (Cont.) Marketing Selling Promoting Assessing customer wants and needs Communicating those needs to operations The need for working closely Operations Finance Marketing
194 Operations Interfaces
195 Systems (Holistic) Approach Emphasizes interrelations among subsystems. A systems approach is essential whenever something is being designed, redesign implemented, or improved. It is important to take into account the impact on all parts of the system. Example: A new feature is added to a product. Designer must take into account how customers will view the change, instruction for using new feature, the cost, training of workers, production schedule, quality standard, advertising must be informed about the new feature.
196 Systems Approach “The whole is greater than the sum of the parts.” Suboptimization
197 Value Added Value added: The difference between cost of inputs and price (??) of outputs. Is this definition right? Should value added include profit? Value added: The difference between the cost of inputs and the (market or fair) value or price of outputs.
Value-Added Inputs Land Labor Capital Transformation/ Conversion process Outputs Goods Services Control Feedback Feedback Feedback Value added
MGT 236 199 OM’s Transformation Role To add value Increase product value at each stage Value added is the net increase between output product value and input material value Provide an efficient transformation Efficiency – means performing activities well for least possible cost
200 Degree of Standardization ! Standardized output Take advantage of standardized methods, less skilled workers, materials… Example: Iron, Wheat, most of commodities Customized output Each job is different Workers must be skilled Example: Hair cut
201 Manufacturing (=Goods) vs. Service operations Production of goods (goods oriented) Tangible products Automobile Refrigerator Services (TV and auto repair, lawn care) Government Regulatory bodies, FAA, FDA Wholesale/retail Financial services Education
202 Similarities for Service/Manufacturers Both use technology Both have quality, productivity, & response issues Both must forecast demand Both can have capacity, layout, and location issues Both have customers, suppliers, scheduling and staffing issues
203 Goods vs. Service Operations (Cont) Differences 1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity 6. Production and delivery 7. Quality assurance 8. Amount of inventory
204 Manufacturing vs. Service ! Characteristic Manufacturing Service Output Tangible Intangible Customer contact Low High Uniformity of output High Low Labor content Low High Uniformity of input High Low Measurement of productivity Easy Difficult Opportunity to correct quality problems Easy Difficult
205 Steel production Automobile fabrication Home remodeling Retail sales Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing High percentage goods Low percentage service Goods-service Continuum Low percentage goods High percentage service
206 U.S. Manufacturing vs. Service Employment 0 20 40 60 80 100 45 50 55 60 65 70 75 80 85 90 95 00 Year Percent Year Mfg. Service 45 79 21 50 72 28 55 72 28 60 68 32 65 64 36 70 64 36 75 58 42 80 44 46 85 43 57 90 35 65 95 32 68 00 30 70 Manufacturing vs. Service Industries in US
Growth of the Service Sector Service sector growing to 50-80% of non-farm jobs Global competitiveness Demands for higher quality Huge technology changes Time based competition Work force diversity
208 Responsibilities of Operations Management Planning Capacity, utilization Location Choosing products or services Make or buy Layout Projects Scheduling Market share Plan for risk reduction, plan B? Forecasting
209 OM Decisions All organizations make decisions and follow a similar path First decisions very broad – Strategic decisions Strategic Decisions – set the direction for the entire company; they are broad in scope and long-term in nature
210 OM Decisions Following decisions focus on specifics - Tactical decision Tactical decisions: focus on specific day-to-day issues like resource needs, schedules, & quantities to produce are frequent Strategic decisions less frequent Tactical and Strategic decisions must align
211 OM Decisions
212 Operations Managers Controlling Inventory Quality Costs Organization Degree of standardization Subcontracting Process selection Staffing Hiring/lay off Use of overtime Incentive plans Job assignments
213 Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities And more . . . Scope of Operations Management
214 Help comes from Models A structure which has been built purposefully to exhibit features and characteristics of some other object. Do not use “thing” or “something” in a definition. For Improved understanding and communication Experimentation Standardization for analysis Abstraction vs. computability
215 Modeling ! Use models Physical models (prototypes) Schematic models (Graphs, charts, pictures) Mathematical models, Statistical models Inventory models Linear programming Queuing techniques Project management models
216 What type of models Simulation models : to test a proposed idea – Monte Carlo Simulation Optimization models : to create an optimal idea – Linear programming Pattern recognition models : to recognize a pattern – Statistics, Forecasting, data mining
217 Decision Making Models Quantitative approaches Analysis of trade-offs Systems approach
218 Models Are Beneficial Easy to use, less expensive Require users to organize Increase understanding of the problem Consistent tool Standardized format Specific objectives Systematic approach to problem solving Analysis of tradeoffs Enable “what if” questions Power of mathematics
219 Pareto Phenomenon • A few factors account for a high percentage of the occurrence of some event(s). • 80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few?
220 Historical Evolution of Operations Management Industrial revolution (1770’s) Scientific management (1911) Mass production Interchangeable parts Division of labor Human relations movement (1920-60) Unemployment insurance Pension plans Decision models (1915, 1960-70’s) Influence of Japanese manufacturers (1970-1990)
MGT 236 221 Historical Development con’t Reengineering 1990s Global competition 1980s Flexibility 1990s Time-Based Competition 1990s Supply chain Management 1990s Electronic Commerce 2000s Outsourcing & flattening of world 2000s For long-run success, companies must place much importance on their operations
222 Trends in Business Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Agility
223 Recent Trends ! Worker involvement Environmental issues, emission reductions are popular after Central European floods Service economy in US, foreign production E-business – information technology Supply chain management Total Quality Management Globalization, emerging markets, NAFTA Lean Production – see the next page
224 Production systems classified Craft Production : System in which highly skilled workers use simple, flexible tools to produce small quantities of customized goods. Carpenter Lean production : System that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety. Dell Mass production: System in which lower-skilled workers use specialized machinery to produce high volumes of standardized goods. Ford
225 Production systems classified Agile=Lean manufacturing It provides flexibility to switch quickly and economically from one product design to another with little disruption. This characteristic, in turn enables faster response to changes in customer demand. A sophisticated computerized inventory control system allows the plant to keep track of large number of parts. Keys to being an agile manufacturer are : Reduction in inventories, Reduction in turnaround times, Availability of automated flexible machinery, Rapid collection and processing of information
226 Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer Simple Product Supply Chain Supply Chain: A sequence of activities and organizations involved in producing and delivering a good or service
227 Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 $0.15 Wheat transported to mill $0.08 $0.23 Mill produces flour $0.15 $0.38 Flour transported to baker $0.08 $0.46 Baker produces bread $0.54 $1.00 Bread transported to grocery store $0.08 $1.08 Grocery store displays and sells bread $0.21 $1.29 Total Value-Added $1.29 A Supply Chain for Bread
228 Other Important Trends Ethical behavior Operations strategy Working with fewer resources Cost control and productivity Quality and process improvement Increased regulation and product liability Lean production
MGT 236 229 Today’s OM Environment Customers demand better quality, greater speed, and lower costs Companies implementing lean system concepts – a total systems approach to efficient operations Recognized need to better manage information using ERP and CRM systems Increased cross-functional decision making
MGT 236 230 OM in Practice OM has the most diverse organizational function Manages the transformation process OM has many faces and names such as; V. P. operations, Director of supply chains, Manufacturing manager Plant manger, Quality specialists, etc. All business functions need information from OM in order to perform their tasks
MGT 236 Business Information Flow
232 OM Across the Organization Most businesses are supported by the functions of operations, marketing, and finance The major functional areas must interact to achieve the organization goals
233 OM Across the Organization – con’t Marketing is not fully able to meet customer needs if they do not understand what operations can produce Finance cannot judge the need for capital investments if they do not understand operations concepts and needs Information systems enables the information flow throughout the organization Human resources must understand job requirements and worker skills Accounting needs to consider inventory management, capacity information, and labor standards
234 Summary Definition of OM OM’s relationship with Marketing, Finance and Accounting Goods vs. service industries OM issues, trends and models Manufacturing systems
235 Highlights OM is the business function that is responsible for managing and coordinating the resources needed to produce a company’s products and services. The role of OM is to transform organizational inputs into company’s products or services outputs OM is responsible for a wide range of decisions, ranging from strategic to tactical. Organizations can be divided into manufacturing and service organizations, which differ in the tangibility of the product or service
236 Highlights – con’t Many historical milestones have shaped OM. Some of these are the Industrial Revolution, scientific management, the human relations movement, management science, and the computer age OM is highly important function in today’s dynamic business environment. Among the trends with significant impact are just-in-time, TQM, reengineering, flexibility, time-based competition, SCM, global marketplace, and environmental issues OM works closely with all other business functions

Recommended

Supply Chain Planning ^0 Operations Part 10 B.pptx
Supply Chain Planning ^0 Operations Part 10 B.pptxSupply Chain Planning ^0 Operations Part 10 B.pptx
Supply Chain Planning ^0 Operations Part 10 B.pptxSheldon Byron
 
Supply Chain Management.ppt
Supply Chain Management.pptSupply Chain Management.ppt
Supply Chain Management.pptAhmed Ali
 
scintro.ppt
scintro.pptscintro.ppt
scintro.pptarpitaghosh297120
 
Supply Chain Mangement - Introduction and concepts
Supply Chain Mangement - Introduction and conceptsSupply Chain Mangement - Introduction and concepts
Supply Chain Mangement - Introduction and conceptsShreyasDash2
 
scintro.ppt
scintro.pptscintro.ppt
scintro.pptCarlosEduardoGonzale66
 
scm intro.ppt
scm intro.pptscm intro.ppt
scm intro.pptjagtamil1
 
Introduction To Scm
Introduction To ScmIntroduction To Scm
Introduction To Scm3abooodi
 
Supply Chain Management in 21st Century
Supply Chain Management in 21st CenturySupply Chain Management in 21st Century
Supply Chain Management in 21st Centuryakshu17d
 

Recommended

Supply Chain Planning ^0 Operations Part 10 B.pptx
Supply Chain Planning ^0 Operations Part 10 B.pptxSupply Chain Planning ^0 Operations Part 10 B.pptx
Supply Chain Planning ^0 Operations Part 10 B.pptxSheldon Byron
 
Supply Chain Management.ppt
Supply Chain Management.pptSupply Chain Management.ppt
Supply Chain Management.pptAhmed Ali
 
scintro.ppt
scintro.pptscintro.ppt
scintro.pptarpitaghosh297120
 
Supply Chain Mangement - Introduction and concepts
Supply Chain Mangement - Introduction and conceptsSupply Chain Mangement - Introduction and concepts
Supply Chain Mangement - Introduction and conceptsShreyasDash2
 
scintro.ppt
scintro.pptscintro.ppt
scintro.pptCarlosEduardoGonzale66
 
scm intro.ppt
scm intro.pptscm intro.ppt
scm intro.pptjagtamil1
 
Introduction To Scm
Introduction To ScmIntroduction To Scm
Introduction To Scm3abooodi
 
Supply Chain Management in 21st Century
Supply Chain Management in 21st CenturySupply Chain Management in 21st Century
Supply Chain Management in 21st Centuryakshu17d
 
Supply chain management
Supply chain managementSupply chain management
Supply chain managementParitosh Kasaudhan
 
28 1industrysupplychainmgmt
28 1industrysupplychainmgmt28 1industrysupplychainmgmt
28 1industrysupplychainmgmtabhiadroit1
 
Intro. to Supply Chain
Intro. to Supply Chain Intro. to Supply Chain
Intro. to Supply Chain omartawfiq
 
Introduction to supply chain management.ppthere
Introduction to supply chain management.ppthereIntroduction to supply chain management.ppthere
Introduction to supply chain management.ppthereBodoor Ghousheh
 
Supply_Chain_Management_san.ppt
Supply_Chain_Management_san.pptSupply_Chain_Management_san.ppt
Supply_Chain_Management_san.pptsakshisaxena614088
 
Supply chain mgt(b&amp;w)
Supply chain mgt(b&amp;w)Supply chain mgt(b&amp;w)
Supply chain mgt(b&amp;w)Jitesh Gaurav
 
Supply Chain Management Presentation.pptx
Supply Chain Management Presentation.pptxSupply Chain Management Presentation.pptx
Supply Chain Management Presentation.pptxAbdulRehman403799
 
Supply Chain Managment
Supply Chain ManagmentSupply Chain Managment
Supply Chain ManagmentJeffrey Matric
 
DEMAND MANAGEMENT AND CUSTOMER SERVICE
DEMAND MANAGEMENT AND CUSTOMER SERVICEDEMAND MANAGEMENT AND CUSTOMER SERVICE
DEMAND MANAGEMENT AND CUSTOMER SERVICEAshish Hande
 
Supply chain management presentation
Supply chain management presentationSupply chain management presentation
Supply chain management presentationMuhammad Nasir
 
SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENTShanimoni Saleem
 
Objectives of supply chain management
Objectives of supply chain managementObjectives of supply chain management
Objectives of supply chain managementDENNY OTTARACKAL
 
Apics Exam Questions Essay
Apics Exam Questions EssayApics Exam Questions Essay
Apics Exam Questions EssayKristen Stacey
 
Chapter 02
Chapter 02Chapter 02
Chapter 02sukimas
 
Ch11 sc mgmt
Ch11 sc mgmtCh11 sc mgmt
Ch11 sc mgmtRakeshNimhan
 
Supply chain-network-optimization-services
Supply chain-network-optimization-servicesSupply chain-network-optimization-services
Supply chain-network-optimization-servicesITC Infotech
 
Scm
ScmScm
ScmDebashish Banerjee
 
(CPFR)
(CPFR)(CPFR)
(CPFR)Abusufiyan Mansuri
 
BA_CEC.pptx
BA_CEC.pptxBA_CEC.pptx
BA_CEC.pptxhetviparmar7
 
Analytics for the supply chain
Analytics for the supply chain Analytics for the supply chain
Analytics for the supply chain Saurav Kumar
 
Essentials of Freight Forwarding P2.pptx
Essentials of Freight Forwarding P2.pptxEssentials of Freight Forwarding P2.pptx
Essentials of Freight Forwarding P2.pptxSheldon Byron
 
Essentials of Freight Forwarding P1.2 (1) 4.30.pptx
Essentials of Freight Forwarding P1.2 (1) 4.30.pptxEssentials of Freight Forwarding P1.2 (1) 4.30.pptx
Essentials of Freight Forwarding P1.2 (1) 4.30.pptxSheldon Byron
 

More Related Content

Similar to Supply Chain Planning ^0 Operations Part 10.pptx

28 1industrysupplychainmgmt
28 1industrysupplychainmgmt28 1industrysupplychainmgmt
28 1industrysupplychainmgmtabhiadroit1
 
Intro. to Supply Chain
Intro. to Supply Chain Intro. to Supply Chain
Intro. to Supply Chain omartawfiq
 
Introduction to supply chain management.ppthere
Introduction to supply chain management.ppthereIntroduction to supply chain management.ppthere
Introduction to supply chain management.ppthereBodoor Ghousheh
 
Supply_Chain_Management_san.ppt
Supply_Chain_Management_san.pptSupply_Chain_Management_san.ppt
Supply_Chain_Management_san.pptsakshisaxena614088
 
Supply chain mgt(b&amp;w)
Supply chain mgt(b&amp;w)Supply chain mgt(b&amp;w)
Supply chain mgt(b&amp;w)Jitesh Gaurav
 
Supply Chain Management Presentation.pptx
Supply Chain Management Presentation.pptxSupply Chain Management Presentation.pptx
Supply Chain Management Presentation.pptxAbdulRehman403799
 
Supply Chain Managment
Supply Chain ManagmentSupply Chain Managment
Supply Chain ManagmentJeffrey Matric
 
DEMAND MANAGEMENT AND CUSTOMER SERVICE
DEMAND MANAGEMENT AND CUSTOMER SERVICEDEMAND MANAGEMENT AND CUSTOMER SERVICE
DEMAND MANAGEMENT AND CUSTOMER SERVICEAshish Hande
 
Supply chain management presentation
Supply chain management presentationSupply chain management presentation
Supply chain management presentationMuhammad Nasir
 
Objectives of supply chain management
Objectives of supply chain managementObjectives of supply chain management
Objectives of supply chain managementDENNY OTTARACKAL
 
Apics Exam Questions Essay
Apics Exam Questions EssayApics Exam Questions Essay
Apics Exam Questions EssayKristen Stacey
 
Chapter 02
Chapter 02Chapter 02
Chapter 02sukimas
 
Supply chain-network-optimization-services
Supply chain-network-optimization-servicesSupply chain-network-optimization-services
Supply chain-network-optimization-servicesITC Infotech
 
Analytics for the supply chain
Analytics for the supply chain Analytics for the supply chain
Analytics for the supply chain Saurav Kumar
 

Similar to Supply Chain Planning ^0 Operations Part 10.pptx (20)

Supply chain management
Supply chain managementSupply chain management
Supply chain management
 
28 1industrysupplychainmgmt
28 1industrysupplychainmgmt28 1industrysupplychainmgmt
28 1industrysupplychainmgmt
 
Intro. to Supply Chain
Intro. to Supply Chain Intro. to Supply Chain
Intro. to Supply Chain
 
Introduction to supply chain management.ppthere
Introduction to supply chain management.ppthereIntroduction to supply chain management.ppthere
Introduction to supply chain management.ppthere
 
Supply_Chain_Management_san.ppt
Supply_Chain_Management_san.pptSupply_Chain_Management_san.ppt
Supply_Chain_Management_san.ppt
 
Supply chain mgt(b&amp;w)
Supply chain mgt(b&amp;w)Supply chain mgt(b&amp;w)
Supply chain mgt(b&amp;w)
 
Supply Chain Management Presentation.pptx
Supply Chain Management Presentation.pptxSupply Chain Management Presentation.pptx
Supply Chain Management Presentation.pptx
 
Supply Chain Managment
Supply Chain ManagmentSupply Chain Managment
Supply Chain Managment
 
DEMAND MANAGEMENT AND CUSTOMER SERVICE
DEMAND MANAGEMENT AND CUSTOMER SERVICEDEMAND MANAGEMENT AND CUSTOMER SERVICE
DEMAND MANAGEMENT AND CUSTOMER SERVICE
 
Supply chain management presentation
Supply chain management presentationSupply chain management presentation
Supply chain management presentation
 
SUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT
SUPPLY CHAIN MANAGEMENT
 
Objectives of supply chain management
Objectives of supply chain managementObjectives of supply chain management
Objectives of supply chain management
 
Apics Exam Questions Essay
Apics Exam Questions EssayApics Exam Questions Essay
Apics Exam Questions Essay
 
Chapter 02
Chapter 02Chapter 02
Chapter 02
 
Ch11 sc mgmt
Ch11 sc mgmtCh11 sc mgmt
Ch11 sc mgmt
 
Supply chain-network-optimization-services
Supply chain-network-optimization-servicesSupply chain-network-optimization-services
Supply chain-network-optimization-services
 
Scm
ScmScm
Scm
 
(CPFR)
(CPFR)(CPFR)
(CPFR)
 
BA_CEC.pptx
BA_CEC.pptxBA_CEC.pptx
BA_CEC.pptx
 
Analytics for the supply chain
Analytics for the supply chain Analytics for the supply chain
Analytics for the supply chain
 

More from Sheldon Byron

Essentials of Freight Forwarding P2.pptx
Essentials of Freight Forwarding P2.pptxEssentials of Freight Forwarding P2.pptx
Essentials of Freight Forwarding P2.pptxSheldon Byron
 
Essentials of Freight Forwarding P1.2 (1) 4.30.pptx
Essentials of Freight Forwarding P1.2 (1) 4.30.pptxEssentials of Freight Forwarding P1.2 (1) 4.30.pptx
Essentials of Freight Forwarding P1.2 (1) 4.30.pptxSheldon Byron
 
Essentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxxEssentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxxSheldon Byron
 
Essentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxxEssentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxxSheldon Byron
 
International Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptxInternational Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptxSheldon Byron
 
International Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptxInternational Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptxSheldon Byron
 
International Transportation and Trade 4.22.pptx
International Transportation and Trade 4.22.pptxInternational Transportation and Trade 4.22.pptx
International Transportation and Trade 4.22.pptxSheldon Byron
 
MIdterm Review International Trade.pptx review
MIdterm Review International Trade.pptx reviewMIdterm Review International Trade.pptx review
MIdterm Review International Trade.pptx reviewSheldon Byron
 
International Transportation and Trade Part 11.pptx
International Transportation and Trade Part 11.pptxInternational Transportation and Trade Part 11.pptx
International Transportation and Trade Part 11.pptxSheldon Byron
 
International Transportation and Trade Part 10.pptx
International Transportation and Trade Part 10.pptxInternational Transportation and Trade Part 10.pptx
International Transportation and Trade Part 10.pptxSheldon Byron
 
International Transportation and Trade Part 9.pptx
International Transportation and Trade Part 9.pptxInternational Transportation and Trade Part 9.pptx
International Transportation and Trade Part 9.pptxSheldon Byron
 
Transportation and Trade Part 5 (1) (1).pptx
Transportation and Trade Part 5 (1) (1).pptxTransportation and Trade Part 5 (1) (1).pptx
Transportation and Trade Part 5 (1) (1).pptxSheldon Byron
 
Transportation and Trade Part 4 (1) (1).pptx
Transportation and Trade Part 4 (1) (1).pptxTransportation and Trade Part 4 (1) (1).pptx
Transportation and Trade Part 4 (1) (1).pptxSheldon Byron
 
International Transportation and Trade Part 8.pptx
International Transportation and Trade Part 8.pptxInternational Transportation and Trade Part 8.pptx
International Transportation and Trade Part 8.pptxSheldon Byron
 
International Transportation and Trade Part 1 4.9.2024.pptx
International Transportation and Trade Part 1 4.9.2024.pptxInternational Transportation and Trade Part 1 4.9.2024.pptx
International Transportation and Trade Part 1 4.9.2024.pptxSheldon Byron
 
Transportation and Trade 3.1 (1) (1).pptx
Transportation and Trade 3.1 (1) (1).pptxTransportation and Trade 3.1 (1) (1).pptx
Transportation and Trade 3.1 (1) (1).pptxSheldon Byron
 
International Transportation and Trade Part 2.pptx
International Transportation and Trade Part 2.pptxInternational Transportation and Trade Part 2.pptx
International Transportation and Trade Part 2.pptxSheldon Byron
 
International Transportation and Trade Part 1.pptx
International Transportation and Trade Part 1.pptxInternational Transportation and Trade Part 1.pptx
International Transportation and Trade Part 1.pptxSheldon Byron
 
Final Review Customs Class 4.4.2024 CCBST
Final Review Customs Class 4.4.2024 CCBSTFinal Review Customs Class 4.4.2024 CCBST
Final Review Customs Class 4.4.2024 CCBSTSheldon Byron
 
Customs Issues and Procedure Part 10.pptx
Customs Issues and Procedure Part 10.pptxCustoms Issues and Procedure Part 10.pptx
Customs Issues and Procedure Part 10.pptxSheldon Byron
 

More from Sheldon Byron (20)

Essentials of Freight Forwarding P2.pptx
Essentials of Freight Forwarding P2.pptxEssentials of Freight Forwarding P2.pptx
Essentials of Freight Forwarding P2.pptx
 
Essentials of Freight Forwarding P1.2 (1) 4.30.pptx
Essentials of Freight Forwarding P1.2 (1) 4.30.pptxEssentials of Freight Forwarding P1.2 (1) 4.30.pptx
Essentials of Freight Forwarding P1.2 (1) 4.30.pptx
 
Essentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxxEssentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxx
 
Essentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxxEssentials of Freight Forwarding.pptxxxx
Essentials of Freight Forwarding.pptxxxx
 
International Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptxInternational Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptx
 
International Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptxInternational Transportation and Trade 4.24.pptx
International Transportation and Trade 4.24.pptx
 
International Transportation and Trade 4.22.pptx
International Transportation and Trade 4.22.pptxInternational Transportation and Trade 4.22.pptx
International Transportation and Trade 4.22.pptx
 
MIdterm Review International Trade.pptx review
MIdterm Review International Trade.pptx reviewMIdterm Review International Trade.pptx review
MIdterm Review International Trade.pptx review
 
International Transportation and Trade Part 11.pptx
International Transportation and Trade Part 11.pptxInternational Transportation and Trade Part 11.pptx
International Transportation and Trade Part 11.pptx
 
International Transportation and Trade Part 10.pptx
International Transportation and Trade Part 10.pptxInternational Transportation and Trade Part 10.pptx
International Transportation and Trade Part 10.pptx
 
International Transportation and Trade Part 9.pptx
International Transportation and Trade Part 9.pptxInternational Transportation and Trade Part 9.pptx
International Transportation and Trade Part 9.pptx
 
Transportation and Trade Part 5 (1) (1).pptx
Transportation and Trade Part 5 (1) (1).pptxTransportation and Trade Part 5 (1) (1).pptx
Transportation and Trade Part 5 (1) (1).pptx
 
Transportation and Trade Part 4 (1) (1).pptx
Transportation and Trade Part 4 (1) (1).pptxTransportation and Trade Part 4 (1) (1).pptx
Transportation and Trade Part 4 (1) (1).pptx
 
International Transportation and Trade Part 8.pptx
International Transportation and Trade Part 8.pptxInternational Transportation and Trade Part 8.pptx
International Transportation and Trade Part 8.pptx
 
International Transportation and Trade Part 1 4.9.2024.pptx
International Transportation and Trade Part 1 4.9.2024.pptxInternational Transportation and Trade Part 1 4.9.2024.pptx
International Transportation and Trade Part 1 4.9.2024.pptx
 
Transportation and Trade 3.1 (1) (1).pptx
Transportation and Trade 3.1 (1) (1).pptxTransportation and Trade 3.1 (1) (1).pptx
Transportation and Trade 3.1 (1) (1).pptx
 
International Transportation and Trade Part 2.pptx
International Transportation and Trade Part 2.pptxInternational Transportation and Trade Part 2.pptx
International Transportation and Trade Part 2.pptx
 
International Transportation and Trade Part 1.pptx
International Transportation and Trade Part 1.pptxInternational Transportation and Trade Part 1.pptx
International Transportation and Trade Part 1.pptx
 
Final Review Customs Class 4.4.2024 CCBST
Final Review Customs Class 4.4.2024 CCBSTFinal Review Customs Class 4.4.2024 CCBST
Final Review Customs Class 4.4.2024 CCBST
 
Customs Issues and Procedure Part 10.pptx
Customs Issues and Procedure Part 10.pptxCustoms Issues and Procedure Part 10.pptx
Customs Issues and Procedure Part 10.pptx
 

Recently uploaded

办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样
办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样
办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样umasea
 
Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012
Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012
Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012rehmti665
 
Internshala Student Partner 6.0 Jadavpur University Certificate
Internshala Student Partner 6.0 Jadavpur University CertificateInternshala Student Partner 6.0 Jadavpur University Certificate
Internshala Student Partner 6.0 Jadavpur University CertificateSoham Mondal
 
VIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With Room
VIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With RoomVIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With Room
VIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With Roomdivyansh0kumar0
 
VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...
VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...
VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...Suhani Kapoor
 
(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...
(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...
(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...gurkirankumar98700
 
Dubai Call Girls Naija O525547819 Call Girls In Dubai Home Made
Dubai Call Girls Naija O525547819 Call Girls In Dubai Home MadeDubai Call Girls Naija O525547819 Call Girls In Dubai Home Made
Dubai Call Girls Naija O525547819 Call Girls In Dubai Home Madekojalkojal131
 
VIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service Bhilai
VIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service BhilaiVIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service Bhilai
VIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service BhilaiSuhani Kapoor
 
Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...
Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...
Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...shivangimorya083
 
PM Job Search Council Info Session - PMI Silver Spring Chapter
PM Job Search Council Info Session - PMI Silver Spring ChapterPM Job Search Council Info Session - PMI Silver Spring Chapter
PM Job Search Council Info Session - PMI Silver Spring ChapterHector Del Castillo, CPM, CPMM
 
Delhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call Girls
Delhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call GirlsDelhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call Girls
Delhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call Girlsshivangimorya083
 
Notes of bca Question paper for exams and tests
Notes of bca Question paper for exams and testsNotes of bca Question paper for exams and tests
Notes of bca Question paper for exams and testspriyanshukumar97908
 
VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...
VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...
VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...Suhani Kapoor
 
VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...
VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...
VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...Suhani Kapoor
 
Call Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts Service
Call Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts ServiceCall Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts Service
Call Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts Servicejennyeacort
 
Experience Certificate - Marketing Analyst-Soham Mondal.pdf
Experience Certificate - Marketing Analyst-Soham Mondal.pdfExperience Certificate - Marketing Analyst-Soham Mondal.pdf
Experience Certificate - Marketing Analyst-Soham Mondal.pdfSoham Mondal
 
定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一
定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一 定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一
定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一Fs sss
 
VIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service Cuttack
VIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service CuttackVIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service Cuttack
VIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service CuttackSuhani Kapoor
 
Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...
Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...
Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...shivangimorya083
 

Recently uploaded (20)

办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样
办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样
办理学位证(纽伦堡大学文凭证书)纽伦堡大学毕业证成绩单原版一模一样
 
Call Girls In Prashant Vihar꧁❤ 🔝 9953056974🔝❤꧂ Escort ServiCe
Call Girls In Prashant Vihar꧁❤ 🔝 9953056974🔝❤꧂ Escort ServiCeCall Girls In Prashant Vihar꧁❤ 🔝 9953056974🔝❤꧂ Escort ServiCe
Call Girls In Prashant Vihar꧁❤ 🔝 9953056974🔝❤꧂ Escort ServiCe
 
Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012
Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012
Call Girls Mukherjee Nagar Delhi reach out to us at ☎ 9711199012
 
Internshala Student Partner 6.0 Jadavpur University Certificate
Internshala Student Partner 6.0 Jadavpur University CertificateInternshala Student Partner 6.0 Jadavpur University Certificate
Internshala Student Partner 6.0 Jadavpur University Certificate
 
VIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With Room
VIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With RoomVIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With Room
VIP Kolkata Call Girl Lake Gardens 👉 8250192130 Available With Room
 
VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...
VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...
VIP Russian Call Girls in Amravati Deepika 8250192130 Independent Escort Serv...
 
(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...
(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...
(Call Girls) in Lucknow Real photos of Female Escorts 👩🏼‍❤️‍💋‍👩🏻 8923113531 ➝...
 
Dubai Call Girls Naija O525547819 Call Girls In Dubai Home Made
Dubai Call Girls Naija O525547819 Call Girls In Dubai Home MadeDubai Call Girls Naija O525547819 Call Girls In Dubai Home Made
Dubai Call Girls Naija O525547819 Call Girls In Dubai Home Made
 
VIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service Bhilai
VIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service BhilaiVIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service Bhilai
VIP Call Girl Bhilai Aashi 8250192130 Independent Escort Service Bhilai
 
Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...
Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...
Delhi Call Girls Preet Vihar 9711199171 ☎✔👌✔ Whatsapp Body to body massage wi...
 
PM Job Search Council Info Session - PMI Silver Spring Chapter
PM Job Search Council Info Session - PMI Silver Spring ChapterPM Job Search Council Info Session - PMI Silver Spring Chapter
PM Job Search Council Info Session - PMI Silver Spring Chapter
 
Delhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call Girls
Delhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call GirlsDelhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call Girls
Delhi Call Girls In Atta Market 9711199012 Book Your One night Stand Call Girls
 
Notes of bca Question paper for exams and tests
Notes of bca Question paper for exams and testsNotes of bca Question paper for exams and tests
Notes of bca Question paper for exams and tests
 
VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...
VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...
VIP High Profile Call Girls Jamshedpur Aarushi 8250192130 Independent Escort ...
 
VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...
VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...
VIP Call Girls Service Saharanpur Aishwarya 8250192130 Independent Escort Ser...
 
Call Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts Service
Call Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts ServiceCall Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts Service
Call Girls In Bhikaji Cama Place 24/7✡️9711147426✡️ Escorts Service
 
Experience Certificate - Marketing Analyst-Soham Mondal.pdf
Experience Certificate - Marketing Analyst-Soham Mondal.pdfExperience Certificate - Marketing Analyst-Soham Mondal.pdf
Experience Certificate - Marketing Analyst-Soham Mondal.pdf
 
定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一
定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一 定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一
定制(UOIT学位证)加拿大安大略理工大学毕业证成绩单原版一比一
 
VIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service Cuttack
VIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service CuttackVIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service Cuttack
VIP Call Girl Cuttack Aashi 8250192130 Independent Escort Service Cuttack
 
Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...
Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...
Full Masii Russian Call Girls In Dwarka (Delhi) 9711199012 💋✔💕😘We are availab...
 

Supply Chain Planning ^0 Operations Part 10.pptx

  • 2. What is Supply Chain? Supply chain coordination aims at improving supply chain performance by aligning the plans and the objectives of individual enterprises. •A supply chain is a network of companies and people that are involved in the production and delivery of a product or service. •The components of a supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers. •The functions of a supply chain include product development, marketing, operations, distribution, finance, and customer service. •Today, many supply chains are global in scale. •Effective supply chain management results in lower costs and a faster production cycle.
  • 3. What is just-in-time (JIT) inventory system? JIT inventory system is a system that delivers inventory to a company just in time for it to be used. This can help to reduce inventory levels and costs. • The just-in-time (JIT) inventory system is a management strategy that minimizes inventory and increases efficiency. • Just-in-time manufacturing is also known as the Toyota Production System (TPS) because the car manufacturer Toyota adopted the system in the 1970s. • Kanban is a scheduling system often used in conjunction with JIT to avoid overcapacity of work in process. • The success of the JIT production process relies on steady production, high-quality workmanship, no machine breakdowns, and reliable suppliers. • The terms short-cycle manufacturing, used by Motorola, and continuous-flow manufacturing, used by IBM, are synonymous with the JIT system.
  • 4. What is VMI system? VMI system is a system where the supplier manages the inventory for the company. This can help to reduce the company's workload and improve coordination with suppliers. Here’s how a vendor managed inventory system works: 1.Both the vendor and buyer agree on what goals and metrics define success for their VMI relationship. These are usually in-stock performance, inventory turnover rate, and transaction cost. Other parts of the agreement will address whether or not the buyer pays for the inventory on acquisition or on sale to the end user. Along with how excess inventory will be returned. 2.The vendor ships inventory to the buyer or retailer. 3.The vendor monitors the sales patterns and inventory levels of their products at that buyer or retailer. 4.The vendor makes reordering and replenishment calculations based on demand forecasting and lead time. 5.The vendor’s VMI specialist or planner reviews the calculations and places the
  • 5. What is Demand Sensing? Demand sensing is a technique that uses real-time data to track demand and adjust inventory levels accordingly. This can help to reduce excess inventory and stockouts. Demand sensing uses real-time data and advanced analytics to understand and predict customer demand. This enables companies to optimize their supply chain and inventory management. • The concept of demand sensing differs from traditional demand planning, which relies on historical sales data and assumes that future demand will follow the same patterns as in the past. • Modern demand sensing is designed to be more agile and responsive, incorporating up-to-date information on factors like changes in consumer behavior, weather patterns, and economic conditions. • And in today's market, demand sensing is becoming increasingly important as companies face a variety of challenges
  • 6. What is the Significance of Coordination for Supply Chain? Significance of coordination for supply chain performance include minimizing inefficiencies and costs, enhancing customer service and satisfaction, and improved overall supply chain performance. Effective supply chain coordination results in reduced excess inventory, shortened delivery time, increased sales, improved customer service and efficient product development efforts, low manufacturing cost, improved flexibility in dealing with high demand uncertainty and increased customer retention.
  • 7. Outline What is supply chain management? A supply chain strategy framework Components of a SCM Major obstacles and common problems Seven Eleven Japan
  • 8. Traditional View: Supply Chains in the Economy (1990, 1996) Freight Transportation$352, $455 B Transportation manager in charge Transportation software Inventory Expense $221, $311 B Inventory manager in charge Inventory software Administrative Expense $27, $31 B Logistics related activity 11%, 10.5% of GNP  $898 B spent domestically for SC activities in 1998.  $1,160 B of inventory in the US economy in the early 2000s. Transportation and inventory managers
  • 9. Traditional View: Cost breakdown of a manufactured good Profit 10% Supply Chain Cost 20% Marketing Cost 25% Manufacturing Cost 45% Profit Supply Chain Cost Marketing Cost Manufacturing Cost Effort spent for supply chain activities are invisible to the customers.
  • 10. What can Supply Chain Management do? Estimated that the grocery industry could save $30 billion (10% of operating cost) by using effective logistics and supply chain strategies A typical box of cereal spends 104 days from factory to sale A typical car spends 15 days from factory to dealership Faster turnaround of the goods is better? Laura Ashley (retailer of women and children clothes) turns its inventory 10 times a year five times faster than 3 years ago inventory is emptied 10 times a year, or an item spends about 12/10 months in the inventory. To be responsive, it relocated its main warehouse next to FedEx hub in Memphis, TE. National Semiconductor used air transportation and closed 6 warehouses, 34% increase in sales and 47% decrease in delivery lead time.
  • 11. Magnitude of Supply Chain Management Compaq estimates it lost $0.5 B to $1 B in sales in 1995 because laptops were not available when and where needed P&G (Proctor&Gamble) estimates it saved retail customers $65 M (in 18 months) by collaboration resulting in a better match of supply and demand When the 1 gig processor was introduced by AMD (Advanced Micro Devices), the price of the 800 meg processor dropped by 30%
  • 12. Importance of SCM understood by some AMR Research: "The biggest issue enterprises face today is intelligent visibility of their supply chains-both upstream and down" Forrester Research: "Companies need to sense and proactively respond to unanticipated variations in supply and demand by adopting emerging technologies such as intelligent agents. To boost their operational agility, firms need to transform their static supply chains into adaptive supply networks” Gartner Group: “By 2004, 90% of enterprises that fail to apply supply-chain management technology and processes to increase their agility will lose their status as preferred suppliers” Open ended statement. Agility can be increased continuously.
  • 13. Top 25 Supply Chains AMR research http://www.amrresearch.com publishes reports on supply chains and other issues. The Top 25 supply chains report comes out in Novembers. The table on the right-hand side is from The Second Annual Supply Chain Top 25 prepared by Kevin Riley and Released in November 2005.
  • 14. SCM Generated Value Minimizing supply chain costs while keeping a reasonable service level customer satisfaction/quality/on time delivery, etc. This is how SCM contributes to the bottom line SCM is not strictly a cost reduction paradigm!
  • 15. A picture is better than 1000 words! How many words would be better than 3 pictures? - A supply chain consists of - aims to Match Supply and Demand, profitably for products and services SUPPLY SIDE DEMAND SIDE The right Product Higher Profits The right Time The right Customer The right Quantity The right Store The right Price = + + + + + - achieves Supplier Manufacturer Distributor Retailer Customer Upstream Downstream
  • 16. Detergent supply chain: Customer wants detergent Albertson’s Supermarket Third party DC P&G or other manufacturer Plastic cup Producer Chemical manufacturer (e.g. Oil Company) Tenneco Packaging Paper Manufacturer Timber Industry Chemical manufacturer (e.g. Oil Company)
  • 17. Flows in a Supply Chain Customer Material Information Funds The flows resemble a chain reaction. Supplier
  • 18. SCM in a Supply Network  Supply Chain Management (SCM) is concerned with the management and control of the flows of material, information, and finances in supply chains. Supply Demand Products and Services Cash Supply Side OEM Demand Side THAILAND INDIA MEXICO TEXAS US N-Tier Suppliers Suppliers Logistics Distributors Retailers Information  The task of SCM is to design, plan, and execute the activities at the different stages so as to provide the desired levels of service to supply chain customers profitably
  • 19. Importance of Supply Chain Management  In 2000, the US companies spent $1 trillion (10% of GNP) on supply- related activities (movement, storage, and control of products across supply chains). Source: State of Logistics Report  Eliminating inefficiencies in supply chains can save millions of $. Tier 1 Supplier Manufacturer Distributor Retailer Customer Inefficient logistics High stockouts Ineffective promotions Frequent Supply shortages High landed costs to the shelf High inventories through the chain Low order fill rates Glitch-Wrong Material, Machine is Down – effect snowballs
  • 21. Cycle View of Supply Chains Customer Order Cycle Replenishment Cycle Manufacturing Cycle Procurement Cycle Customer Retailer Distributor Manufacturer Supplier Any cycle 0. Customer arrival 1. Customer triggers an order 2. Supplier fulfils the order 3. Customer receives the order
  • 22. Push vs Pull System What instigates the movement of the work in the system? In Push systems, work release is based on downstream demand forecasts Keeps inventory to meet actual demand Acts proactively e.g. Making generic job application resumes today (e.g.: exempli gratia) In Pull systems, work release is based on actual demand or the actual status of the downstream customers May cause long delivery lead times Acts reactively e.g. Making a specific resume for a company after talking to the recruiter
  • 23. Push/Pull View of Supply Chains Procurement, Manufacturing and Replenishment cycles Customer Order Cycle Customer Order Arrives Push-Pull boundary PUSH PROCESSES PULL PROCESSES
  • 24. Examples of Supply Chains Dell / Compaq Dell buys some components for a product from its suppliers after that product is purchased by a customer. Extreme case of a pull process Zara, Spain’s answer to Italy’s Benetton Sells apparel with a short design-to-sale cycle, avoids markdowns.
  • 26. Mission-Strategy-Tactics- Decisions Mission, Mission statement The reason for existence of an organization Strategy A plan for achieving organizational goals Tactics The actions taken to accomplish strategies Operational decisions Day to day decisions to support tactics
  • 27. Life Strategy for Ted Ted is an undergrad. He would like to have a career in business, have a good job, and earn enough income to live comfortably Mission: Live a good life Goal: Successful career, good income Strategy: Obtain a master’s degree Tactics: Select a college and a concentration Operations: Register, buy books, take courses, study, graduate, get a job
  • 28. Linking SC and Business Strategy New Product Development Marketing and Sales Operations Distribution Service Finance, Accounting, Information Technology, Human Resources Competitive (Business) Strategy Product Development Strategy -Portfolio of products -Timing of product introductions Marketing Strategy -Frequent discounts -Coupons Supply Chain Strategy
  • 29. Strategies: Product Development It relates to Technologies for future operations (via patents) and Set of products/services Be the technology leader IBM workstations Offer many products Dell computers Offer products for locals Tata’s Nano at $2500=100000 rupees Production at Singur, West Bengal, India; l x w x h=3.1 x 1.5 x 1.6 meters; Top speed: 105km/hr; Engine volume 623 cc; Mileage 50 miles/gallon; Annual sales target 200,000.
  • 30. Strategies Marketing and sales strategy relates to positioning, pricing and promotion of products/services e.g. Never offer more than 40% discount e.g. EDLP = every day low price At Wal-Mart e.g. Demand smoothing via coupons BestBuy Supply chain management strategy relates to procurement, transportation, storage and delivery e.g. Never use more than 1 supplier for every input e.g. Never expedite orders just because they are late e.g. Always use domestic suppliers within the sales season not in advance.
  • 31. Fitting the SC to the customer or vice versa? Understand the customer Wishes Understand the Capabilities of your SC Match the Wishes with the Capabilities Challenge: How to meet extensive Wishes with limited Capabilities?
  • 32. Achieving Strategic Fit: Consistent SCM and Competitive strategies Fit SC to the customer Understanding the Customer Range of demand, Production lot size, seasonal products Response time, Service level, product availability Product variety Innovation Accommodating quality Implied (Demand) Uncertainty for SC Implied trouble for SC
  • 33. Contributors to Implied Demand Uncertainty Low High Price Responsiveness Customer Need Implied Demand Uncertainty Commodities Detergent Long lead time steel Customized products High Fashion Clothing Emergency steel, for maintenance/replacement Short lead times, product variety, distribution channel variety, high rate of innovation and high customer service levels all increase the Implied Demand Uncertainty
  • 34. Loosing the strategic fit: Webvan Webvan started a merger with HomeGrocer in Sept 2000 and completed in May 2001. Declared bankruptcy in July 2001. Why? “Webvan was so behemoth that could deliver anything to anyone anywhere that it lost sight of a more mundane task: pleasing grocery customers day after day”. Short to midterm cash mismanagement. Venture capital of $1.2 B run out. Merger costs: duplicated work force, integration of technology, realignment of facilities. Peapod has the same business model but more focused in terms of service and locations. It actually survives with its parent company Royal Ahold’s (Dutch Retailer) cash. Delivers now at a fee of $6.95 within a day.
  • 35. Top 10 Retailers Reported in 2008 – First 4 Source www.deloitte.com/dtt/cda/doc/content/dtt_2008globalpowersofretailing.pdf
  • 36. Top 10 Retailers Reported in 2008 – First 5-10
  • 37. Big retailers’ Strategy Wal-Mart: Efficiency Target: More quality and service Carrefour: International, ambiance K-Mart: Confused. Squeezed between Target and Wal-Mart Reliance on coupon sales Do coupons stabilize or destabilize a Supply chain? K-Mart and Sears merged in November 2004. Now called Sears Holdings. K-Mart gets cash Sears gets presence outside malls
  • 38. Other Factors Multiple products in a SC. Multiple customers for a given product Separate supply chains or Tailored supply chains e.g. Barnes and Noble: Retailing and/or e-tailing Product and/or customer classes e.g. UTD library loans books for 6 months (2 weeks) to faculty (students) Customer segmentation by pricing Competitors: more, faster and global UTD online programs compete globally Product life cycle (shortening) SCM strategy moves toward efficiency and low implied uncertainty as products age e.g. Air travel is becoming more efficient e.g. Southwest airlines lead the drive for efficiency e.g. Airbus announced A380 accommodating 555-800 people on Jan 17, 2005. e.g. Flat screen TV producer of AU Optronics of Taiwan was looking for ways to make its SC more efficient in June 2004. Replacement sales Selling to replace broken units. e.g. AC replacement is about 50% of the market. Macroeconomic factors for visibility Forecasting Home Depot sales from S&P 500 price index. Positive correlation is detected.
  • 39. Integration Integration is the central theme in SCM Building synergiesby integrating business functions, departments and companies
  • 40. Supply Chain Drivers and Obstacles
  • 41. Drivers of Supply Chain Performance Efficiency Responsiveness Inventory Transportation Facilities Information Supply chain structure Logistical Drivers How to achieve Sourcing Pricing Cross- Functional Drivers
  • 42. 1. Inventory Convenience: Cycle inventory No customer buys eggs one by one Unstable demand: Seasonal inventory Bathing suits Xmas toys and computer sales Randomness: Safety inventory Pipeline inventory Work in process or transit
  • 43. Little’s law Long run averages = Expected values I = R . T I=Pipeline inventory; R=output per time=throughput; T=delay time=flow time Flow time? Thruput? Pipeline (work in process) Inventory? 10/minute Spend 1 minute
  • 45. 3. Facilities Production Flexible vs. Dedicated Flexibility costs Production: Remember BMW: “a sports car disguised as a sedan” Service: Can your instructor teach music as well as SCM? Sports: A playmaker who shoots well is rare. Inventory-like operations: Receiving, Prepackaging, Storing, Picking, Packaging, Sorting, Accumulating, Shipping Job Lot Storage: Need more space. Reticle storage in fabs. Crossdocking: Wal-Mart
  • 46. 4. Information Role in the supply chain The connection between the various stages in the supply chain Crucial to daily operation of each stage in a supply chain E.g., production scheduling, inventory levels Role in the competitive strategy Allows supply chain to become more efficient and more responsive at the same time (reduces the need for a trade-off) Information technology Andersen Windows Wood window manufacturer, whose customers can choose from a library of 50,000 designs or create their own. Customer orders automatically sent to the factory.
  • 47. Characteristics of the Good Information Information Global Scope Coordinated Decisions Supply Chain Success Strategy Analytical Models $$$ Information  Accurate?  Accessible?  Up-to-date?  In the Correct form? » If not, database restricted ability. How difficult is it to import data into SAP?
  • 48. Quality of Information Information drives the decisions: Good information means good decisions IT helps: MRP, ERP, SAP, EDI Relevant information? How to use information?
  • 49. Information Technology in a Supply Chain: Legacy Systems Supplier Customer Retailer Distributor Manufacturer Strategic Planning Operational
  • 50. Information Technology in a Supply Chain: ERP Systems Supplier Customer Retailer Distributor Manufacturer Strategic Planning Operational ERP Potential ERP Potential ERP
  • 51. Information Technology in a Supply Chain: Analytical Applications Supplier Customer Retailer Distributor Manufacturer Strategic Planning Operational Supplier Apps SCM MES Dem Plan Transport execution & WMS APS Transport & Inventory Planning CRM/SFA
  • 52. ERP Systems Wider focus Push (MRP) versus Pull (demand information transmitted quickly throughout the supply chain) Real-time information Coordination and Information sharing Transactional IT Expensive and difficult to implement About 25% of ERP installations are cancelled within a year About 70% of ERP installations go over the budget
  • 53. IT Push 0 100 200 300 400 500 1965 1973 1981 1989 1997 IT investment($B)
  • 54. 5. Sourcing Role in the supply chain Set of processes required to purchase goods and services in a supply chain Supplier selection, single vs. multiple suppliers, contract negotiation Role in the competitive strategy Sourcing is crucial. It affects efficiency and responsiveness in a supply chain In-house vs. outsource decisions- improving efficiency and responsiveness Cisco sources: Low-end products (e.g. home routers) from China. Components of sourcing decisions In-house versus outsource decisions Supplier evaluation and selection Procurement process: Every department of a firm buy from suppliers independently, or all together.
  • 55. 6. Pricing Role in the supply chain Pricing determines the amount to charge customers in a supply chain Pricing strategies can be used to match demand and supply Price elasticity: Do you know yours? Role in the competitive strategy Use pricing strategies to improve efficiency and responsiveness Low price and low product availability; vary prices by response times Amazon: Faster delivery is more expensive Components of pricing decisions Pricing and economies of scale Everyday low pricing versus high-low pricing Fixed price versus menu pricing, depending on the product and services Packaging, delivery location, time, customer pick up Bundling products; products and services
  • 56. Considerations for Supply Chain Drivers Driver Efficiency Responsiveness Inventory Cost of holding Availability Transportation Consolidation Speed Facilities Consolidation / Dedicated Proximity / Flexibility Information Low cost/slow/no duplication High cost/ streamlined/reliable Sourcing Low cost sources Responsive sources Pricing Constant price Low-high price
  • 57. Major Obstacles to Achieving Fit SC is big: Variety of products/services Spoiled customer Multiple owners (Procurement, Production, Inventory, Marketing) / multiple objectives Globalization Local optimization and lack of global fit
  • 58. Dealing with Multiple Owners / Local Optimization Information Coordination Information sharing / Shyness / Legal and ethical issues Contractual Coordination Mechanisms to align local objectives with global ones Coordination with (real) options Rare in the practice Without coordination, misleading reliance on metrics: Average safety inventory, Average incoming shipment size, Average purchase price of raw materials, Revenue Major Obstacles to Achieving Fit
  • 59. Major obstacles to achieving fit Instability and Randomness: Increasing product variety Shrinking product life cycles Customer fragmentation: Push for customization, segmentation Fragmentation of Supply Chain ownership: Globalization Increasing implied uncertainty
  • 60. Common problems Lack of relevant SCM metrics: How to measure responsiveness? How to measure efficiency, costs, worker performance, etc? Poor inventory status information Theft: Major problem for furniture retailers. Transaction errors: Retailers with inaccurate inventory records for 65% of SKUs Information delays, dated information, incompatible info. systems Misplaced inventory: 16% of items cannot be found at a major retailer Spoilage: active ingredients in the products are losing their properties Product quality and yield Lack of visibility in SCs Do you know the inventory your distribution centers hold? Do you know the inventory your fellow retailer holds?
  • 61. Common problems Poor delivery status information Not knowing the order status Poor IT design Unreliable, duplicate data Security problems: too much or too little Ignoring uncertainties “The flight from uncertainty and ambiguity is so motivated that we often create pseudocertainty.” Nitin Nohra, HBR February 2006 issue, p.40. Internal customer discrimination Giving lower priority to internal customers than external customers Poor integration Elusive inventory costs Accounting systems do not capture opportunity costs SC-insensitive product design
  • 62. Seven Eleven Japan (SEJ) A Case Study
  • 63. Factual Information on Seven Eleven Japan (SEJ) Largest convenience store in Japan with market value of $95 B. The third largest retail company in the world after Wal-Mart and Home Depot. Established in 1974. In 2000, total sales $18,000 M, profit $620 M. Average inventory turnover time 7-8.5 days. Stock value increased by 3000 times from 1974 to 2000. In 1985, there were 2000 stores in Japan, increasing by 400-500 per year. Return on equity 14% over 2000-2004. A SEJ store is about the half the size of a US 7-eleven store, that is about 110 m2. Sales: Products 32.9% Processed food: drinks, noodles, bread and snacks 31.6% Fast food: rice ball, box lunch and hamburgers 12.0% Fresh food: diary products 25.3% Non-food: magazines, ladies stockings and batteries. Services: Utility bill paying, installment payments for credit companies, ATMs, photocopying
  • 64. More on SEJ More factual info: Average sales about twice of an average US store SKU’s offered in store: Over 3,000 (change by time of day, day of week, season) Virtually no storage space No food cooking at the stores Japanese Images of Seven Eleven: Convenient Cheerful and lively stores Many ready made dinner items I buy Famous for its great boxed lunch and dinner - On weekends, when I was single, I went to buy lunch and dinner SC strategy: Micro matching of supply and demand (by location, time of day, day of week, season)
  • 65.
  • 66. Information Analysis of POS Data Analysis of Sales for product categories over time SKU (stock keeping unit) Waste or disposal 10 day (or week) sales trend by SKU Sales trends for new product In the early 1990s, half-prepared fresh noodle sales were going up, new fresh noodle products were quickly developed Sales trend by time and day Different sales patterns for different sizes of milk at different times of the day results in rearrangement of the milks in the fridge. Extreme store micromanagement. Let us speculate: Flavored milks are put in front of the pure milks in the evening (or the morning?). List of slow moving items About half of 3000 SKUs are replaced by new ones every year
  • 67. Facilities Strategy Limited storage space at stores which have only 125-150 m2 space Frequent and small deliveries to stores Deliveries arrive from over 200 plants. Products are grouped by the cooling needs Combined delivery system: frozen foods, chilled foods, room temperature and hot foods. Such product groups are cross-docked at distribution centers (DC). Food DCs store no inventory. A single truck brings a group of products and visits several stores within a geographical region Aggregation: No supplier (not even coke!) delivers direct The number of truck deliveries per day is reduced by a factor of 7 from 1974 to 2000. Still, at least 3 fresh food deliveries per day. Goods are received faster with the use of scanners. Have many outlets, at convenient locations, close to where customers can walk Focus on some territories, not all: When they locate in a place they blanket (a.k.a. clustering) the area with stores; stores open in clusters with corresponding DC’s. 844 stores in the Tokyo region; Seven Eleven had stores in 32 out of 47 prefectures in 2004. No stores in Kobe. Success rate of franchise application <= 1/100
  • 68. The Present and the Future Is food preparation a good idea at 7-eleven locations? e.g. Compare microwave heating vs. salad preparation. Why SEJ does not allow direct delivery from suppliers to retailers? Point out which of the following strategies can also be used in US (or Taiwan) Information strategy Facilities strategy Discuss the differences between the Japanese and US (or Taiwanese) consumers with regard to Frequency and amount of grocery purchase Use of credit cards vs. cash for purchase 7-eleven inventory turnover rate is 50 in Japan and 19 in the USA. 7-eleven growing rapidly in the US so it aims to be a web depot in both the US and Japan. Does this make sense from a supply chain perspective? Cost vs. Responsiveness Business strategy What is the risk of micro-matching strategy? No direct deliveries to SEJ, what is the potential risk of this strategy if used in the USA?
  • 69. The Savvy Employees Who Saved 7-Eleven From Bankruptcy
  • 70. Lecture Outline • What Operations and Supply Chain Managers Do • Operations Function • Evolution of Operations and Supply Chain Management • Globalization and Competitiveness • Operations • Strategy and Organization of the Text • Learning Objectives for This Course 1-70
  • 71. What Operations and Supply Chain Managers Do • What is Operations Management? ■ design, operation, and improvement of productive systems • What is Operations? ■ a function or system that transforms inputs into outputs of greater value • What is a Transformation Process? ■ a series of activities along a value chain extending from supplier to customer ■ activities that do not add value are superfluous and should be eliminated 1-71
  • 72. • Physical: as in manufacturing operations • Locational: as in transportation or warehouse operations • Exchange: as in retail operations • Physiological: as in health care • Psychological: as in entertainment • Informational: as in communication Transformation Process 1-72
  • 73. INPUT •Material Operations as a Transformation Process •Machines •Labor •Management •Capital TRANSFORMATION PROCESS OUTPUT •Goods •Services Feedback & Requirements 1-73
  • 74. Operations Function • Operations • Marketing • Finance and Accounting • Human Resources • Outside Suppliers 1-74
  • 75. How is Operations Relevant to my Major? • Accounting • Information Technology • Management • “As an auditor you must understand the fundamentals of operations management.” • “IT is a tool, and there’s no better place to apply it than in operations.” • “We use so many things you learn in an operations class— scheduling, lean production, theory of constraints, and tons of quality tools.” 1-75
  • 76. How is Operations Relevant to my Major? (cont.) • Economics • “It’s all about processes. I live by flowcharts and Pareto analysis.” • “How can you do a good job marketing a product if you’re unsure of its quality or delivery status?” • “Most of our capital budgeting requests are from operations, and most of our cost savings, too.” • Marketing 1-76 • Finance
  • 77. Evolution of Operations and Supply Chain Management • Craft production ■ process of handcrafting products or services for individual customers • Division of labor ■ dividing a job into a series of small tasks each performed by a different worker • Interchangeable parts ■ standardization of parts initially as replacement parts; enabled mass production 1-77
  • 78. • Scientific management ■ systematic analysis of work methods • Mass production ■ high-volume production of a standardized product for a mass market • Lean production ■ adaptation of mass production that prizes quality and flexibility Evolution of Operations and Supply Chain Management (cont.) 1-78
  • 79. Historical Events in Operations Management Era Events/Concepts Dates Originator Industrial Steam engine 1769 James Watt Revolution Division of labor 1776 Adam Smith Interchangeable parts 1790 Eli Whitney Scientific Management Principles of scientific management Time and motion studies Activity scheduling chart Moving assembly line 1911 1911 1912 1913 Frederick W. Taylor Frank and Lillian Gilbreth Henry Gantt Henry Ford 1-79
  • 80. Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator Human Relations Hawthorne studies 1930 Elton Mayo Motivation theories 1940s 1950s Abraham Maslow Frederick Herzberg 1960s Douglas McGregor Linear programming 1947 George Dantzig Digital computer 1951 Remington Rand Simulation, waiting line theory, decision theory, PERT/CPM 1950s Operations research groups Operations Research MRP, EDI, EFT, CIM 1960s, 1970s Joseph Orlicky, IBM and others 1-80
  • 81. Historical Events in Operations Management (cont.) Era Events/Concepts Dates Originator JIT (just-in-time) 1970s Taiichi Ohno (Toyota) TQM (total quality management) 1980s W. Edwards Deming, Joseph Juran Quality Revolution Strategy and operations 1980s Wickham Skinner, Robert Hayes Business process reengineering 1990s Michael Hammer, James Champy Six Sigma 1990s GE, Motorola 1-81
  • 82. Era Events/Concepts Dates Originator Internet Internet, WWW, ERP, 1990s ARPANET, Tim Revolution supply chain management Berners-Lee SAP, i2 Technologies, ORACLE E-commerce 2000s Amazon, Yahoo, eBay, Google, and others Globalization WTO, European Union, and other trade agreements, global supply chains, outsourcing, BPO, Services Science 1990s 2000s Numerous countries and companies Historical Events in Operations Management (cont.) 1-82
  • 83. Evolution of Operations and Supply Chain Management (cont.) • Supply chain management ■ management of the flow of information, products, and services across a network of customers, enterprises, and supply chain partners 1-83
  • 84. Globalization and Competitiveness • Why “go global”? ■ favorable cost ■ access to international markets ■ response to changes in demand ■ reliable sources of supply ■ latest trends and technologies • Increased globalization ■ results from the Internet and falling trade barriers 1-84
  • 85. Globalization and Competitiveness (cont.) Hourly Compensation Costs for Production Workers Source: U.S. Bureau of Labor Statistics, 2005. 1-85
  • 86. Globalization and Competitiveness (cont.) World Population Distribution Source: U.S. Census Bureau, 2006. 1-86
  • 87. Globalization and Competitiveness (cont.) Trade in Goods as % of GDP (sum of merchandise exports and imports divided by GDP, valued in U.S. dollars) 1-87
  • 88. Productivity and Competitiveness • Competitiveness ■ degree to which a nation can produce goods and services that meet the test of international markets • Productivity ■ ratio of output to input • Output ■ sales made, products produced, customers served, meals delivered, or calls answered • Input ■ labor hours, investment in equipment, material usage, or square footage 1-88
  • 90. Productivity and Competitiveness (cont.) Average Annual Growth Rates in Productivity, 1995-2005. Source: Bureau of Labor Statistics. A Chartbook of International Labor Comparisons. January 2007, p. 28. 1-90
  • 91. Productivity and Competitiveness (cont.) Average Annual Growth Rates in Output and Input, 1995-2005 Source: Bureau of Labor Statistics. A Chartbook of International Labor Comparisons, January 2007, p. 26. Dramatic Increase in Output w/ Decrease in Labor Hours 1-91
  • 92. Productivity and Competitiveness (cont.) • Retrenching ■ productivity is increasing, but both output and input decrease with input decreasing at a faster rate • Assumption that more input would cause output to increase at the same rate ■ certain limits to the amount of output may not be considered ■ output produced is emphasized, not output sold; increased inventories 1-92
  • 93. • Strategy ■ Provides direction for achieving a mission • Five Steps for Strategy Formulation ■ Defining a primary task • What is the firm in the business of doing? ■ Assessing core competencies • What does the firm do better than anyone else? ■ Determining order winners and order qualifiers • What qualifies an item to be considered for purchase? • What wins the order? ■ Positioning the firm • How will the firm compete? ■ Deploying the strategy Strategy and Operations 1-93
  • 95. The Rise of China’s Shein
  • 96. Order Winners and Order Qualifiers Source: Adapted from Nigel Slack, Stuart Chambers, Robert Johnston, and Alan Betts, Operations and Process Management, Prentice Hall, 2006, p. 47 1-96
  • 97. Positioning the Firm • Cost • Speed • Quality • Flexibility 1-97
  • 98. Positioning the Firm: Cost • Waste elimination ■ relentlessly pursuing the removal of all waste • Examination of cost structure ■ looking at the entire cost structure for reduction potential • Lean production ■ providing low costs through disciplined operations 1-98
  • 99. Positioning the Firm: Speed • fast moves, fast adaptations, tight linkages • Internet ■ conditioned customers to expect immediate responses • Service organizations ■ always competed on speed (McDonald’s, LensCrafters, and Federal Express) • Manufacturers ■ time-based competition: build-to-order production and efficient supply chains • Fashion industry ■ two-week design-to-rack lead time of Spanish retailer, Zara 1-99
  • 100. Positioning the Firm: Quality • Minimizing defect rates or conforming to design specifications; please the customer • Ritz-Carlton - one customer at a time ■ Service system is designed to “move heaven and earth” to satisfy customer ■ Every employee is empowered to satisfy a guest’s wish ■ Teams at all levels set objectives and devise quality action plans ■ Each hotel has a quality leader 1-100
  • 101. Positioning the Firm: Flexibility • ability to adjust to changes in product mix, production volume, or design • National Bicycle Industrial Company ■ offers 11,231,862 variations ■ delivers within two weeks at costs only 10% above standard models ■ mass customization: the mass production of customized parts 1-101
  • 102. Policy Deployment • Policy deployment ■ translates corporate strategy into measurable objectives • Hoshins ■ action plans generated from the policy deployment process 1-102
  • 103. Policy Deployment Derivation of an Action Plan Using Policy Deployment 1-103
  • 104. Balanced Scorecard • Balanced scorecard ■ measuring more than financial performance • finances • customers • processes • learning and growing • Key performance indicators ■ a set of measures that help managers evaluate performance in critical areas 1-104
  • 107. Learning Objectives of this Course • Gain an appreciation of strategic importance of operations and supply chain management in a global business environment • Understand how operations relates to other business functions • Develop a working knowledge of concepts and methods related to designing and managing operations and supply chains • Develop a skill set for quality and process improvement 1-107
  • 108. 108 Learning Objectives To understand the escalating importance of logistics and supply-chain management as crucial tools for competitiveness. To learn about materials management and physical distribution. To learn why international logistics is more complex than domestic logistics. To see how the transportation infrastructure in host countries often dictates the options open to the manager. To learn why international inventory management is crucial for success.
  • 109. 109 International Logistics International logistics is the design and management of a system that controls the forward and reverse flow of materials, services, and information into, through, and out of the international corporation.
  • 110. 110 International Logistics (cont.) Through the implementation of international logistics, the firm can implement cost-saving programs such as just-in-time (JIT), electronic data interchange (EDI), and early supplier involvement (ESI). The two phases of the movement of materials include: materials management, or the timely movement of materials, parts, and supplies. physical distribution, or the movement of the firm’s physical product to its customers.
  • 111. 111 Three Concepts of Business Logistics Total Cost Concept Trade-off Concept Systems Concept
  • 112. 112 Supply-Chain Management Supply-chain management is the integration of business processes from end user through original suppliers, that provide products, services, and information that add value for customers. Supply-chain management connects a company’s supply side with its demand side. It opens up supplier relationships for companies outside of the buyer’s domestic market.
  • 113.  Any organization, anywhere in the world, offering a product or a service has a supply chain.  Products and Services are created from materials, using equipment, labor, time, money, and other resources.  Producing and delivering products and services requires Suppliers, Manufacturers, and Customers; all of which make up the links in a supply chain.  Supply chains exist in organizations that are: – Large or Small (i.e., a multinational corporation or a “mom & pop shop” on the local corner) – Public or Private (i.e., a publically traded company or a privately held company) – For-Profit or Not-for-Profit (i.e., a commercial business, government or a charitable institution) What is a Supply Chain? 11 3
  • 114. Suppliers Customers Finished Material Suppliers (Tier 1) Intermediate Suppliers (Tier 2) Raw Material Suppliers (Tier 3) Wholesaler & Distributor Customers (Tier 1) Retail Customers (Tier 2) Consumers (Tier 3) Manufacturer (Your Company) Finished Product Manufacturer Internal Internal Internal External External External What is a Supply Chain? (continued)  From SUPPLIERS: Raw Material, Intermediate, and/or Finished Material Suppliers  To MANUFACTURERS: Finished Product Manufacturers (Internal and/or External)  To CUSTOMERS: Wholesalers, Distributors, Retailers and/or Consumers Each of these are “Links” in the supply chain Inbound Transportation Outbound Transportation Air Truck Rail Water Pipeline Facilitated through the use of Logistics Warehousing A supply chain consists of the flow of materials and products . . .
  • 115. Think about typical products that you buy  Automobiles  Books  Candy Bars  Cell phones  Clothes / Shoes  Fast food  Laptop computers  Soft Drinks What is your favorite Candy Bar? 11 5 Do you know what goes into making it?
  • 116. Candy Bar Supply Chain (Simplified) 11 6 Suppliers Customers Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores)
  • 118. 11 8 Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Supply Disruption Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) Supply Chain Disruption 2 Suddenly, you cannot get the Chocolate and Cocoa Butter that you need to make your Candy Bars Meanwhile . . . your other suppliers will continue to ship their products to you Suppliers Customers Manufacturer
  • 119. 11 9 Consumers Candy Bar Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Wholesalers and Distributors Retailers (Stores) Supply Disruption Supply Chain Disruption 3 Candy Bar production will be forced to stop Your customers still have inventory of candy bars that they previously purchased from you which they can continue to sell and your inventory of the other materials will start to build up Suppliers Customers Manufacturer
  • 120. 12 0 Consumers Candy Bar Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Wholesalers and Distributors Retailers (Stores) Supply Disruption Supply Chain Disruption 4 The disruption impacts all suppliers You are forced to cancel your orders for materials from all your suppliers until Cocoa Beans are available again Suppliers Customers Manufacturer
  • 121. 12 1 Consumers Candy Bar Manufacturer Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Wholesalers and Distributors Retailers (Stores) Supply Disruption Supply Chain Disruption 5 The disruption impacts all customers Your customers sell out all remaining inventory of candy bars which creates a TOTAL MARKET STOCKOUT Suppliers Customers Manufacturer
  • 122. Candy Bar Supply Chain (Simplified) 12 2 Chocolate Sugar Packaging Soy Lecithin Milk Milk Fat Lactose Cocoa Butter Sugarcan e Paper Cocoa Beans Consumers Candy Bar Manufacturer Wholesalers and Distributors Retailers (Stores) All supply chain links are interconnected and a disruption with one will likely impact all The supply chain is only as strong as its weakest link Suppliers Customers Manufacturer
  • 123. Service firms offer intangible products, meaning products that cannot be physically touched. Supply Chains in the Service Industry It is not just products . . . services have a supply chain as well. 12 3 Many services require the use of Facilitating Goods which are tangible elements that are used along with the service provided. These items need to be purchased, transported, received, and warehoused in order to provide the service activity, and each has a supply chain.
  • 124. 12 4 It is the coordination of a network of otherwise independent trading partners creating a desired product or service, and moving it from suppliers, through manufacturing, and out to customers when and where they want it. Supply Chain Management is the way business gets done. It is the execution process of any business. What is a Supply Chain Management?
  • 125. Supply Chain Management accounts for $1.4 trillion (≈8%) of the total U.S. economy ---> annually. Companies have been expanding globally and speeding up every link in the supply chain to stay competitive. This has created a significant and growing shortage of supply chain talent --- which translates to JOBS !!! Current trends will continue to raise the bar in supply chain management, and by extension, the skills required:  Continued and accelerated pace of globalization  Expansion of e-Commerce  Heightened focus on supply chain risk  Widespread adoption of new technologies and innovations Talent Shortage in Supply Chain Management
  • 126. Supply Chain Management is a skilled profession with cutting edge technologies and major innovations happening at an accelerated pace. Just a few examples: Technology and Innovation
  • 127. Logistics: Warehousing, Transportation, and Distribution Finished Material Suppliers (Tier 1) Wholesaler & Distributor Customers (Tier 1) Finished Product Manufacturer Intermediate Suppliers (Tier 2) Raw Material Suppliers (Tier 3) Retail Customers (Tier 2) Consumers (Tier 3) Purchasing Strategic Sourcing Ethical and Sustainable Sourcing Supplier Relationship Management Customer Service Forecasting and Demand Planning Distribution Channel Management Customer Relationship Management Planning & Scheduling Operations Management Quality Assurance International Trade Risk Management Project Management Typical Supply Chain Career Areas Suppliers Customers Manufacturer Inbound Transportation Warehousing Outbound Transportation Distribution Inventory Management Material Handling Abundant job opportunities across all of these functional areas
  • 128. Careers in Supply Chain Management Top 10 things you can expect from a career in Supply Chain Management 1. Job Availability (entry level and advanced) 2. Accelerated Growth and Advancement opportunities 3. Job Security 4. Excellent Income and Compensation packages 5. Career Contentment 6. Supply chain jobs available in every Industry and Worldwide 7. Work Location choices. Your supply chain skills are portable! 8. Travel and Relocation opportunities 9. Opportunities to Specialize in supply chain Disciplines & Sectors 10. Innovation and cutting edge Technologies Recent survey = 79% content with their career
  • 129. 129 Transportation Infrastructure A firm’s logistics platform is determined by a location’s ease and convenience of market reach under favorable cost circumstances. The public sector’s investment priorities, safety regulations, tax incentives, and transport policies can have major effects on the logistics decisions of firms. The logistics manager must learn about existing and planned infrastructures abroad and at home and factor them into the firm’s strategy.
  • 130. 130 Vessels Used in Ocean Shipping Liner Service Bulk Service Tramp Service
  • 131. 131 Airfreight Airfreight is available to and from most countries, including the developing world. Forty percent of the world’s manufactured travel by air. Items that are high-value or high in density tend to travel by air.
  • 132. 132 Considerations for Selecting a Mode of Transport Predictability Transit Time Cost Non-economic Factors
  • 133. 133 Export Documentation A bill of lading is a contract between the exporter and the carrier indicating that the carrier has accepted responsibility for the goods and will provide transportation in return for payment. A commercial invoice is a bill for the goods stating basic information about the transaction, including a description of the merchandise, total cost of the goods sold, addresses of the shipper and seller, and delivery and payment terms. A freight forwarder specializes in handling export documentation.
  • 134. 134 International Inventory Issues Inventories tie up a major portion of corporate funds, therefore proper inventory policies should be a major concern to the international logistician. Just-in-time inventory policies minimize the volume of inventory by making it available only when needed. The purpose of establishing inventory systems are: to maintain product movement in the delivery pipeline to have a cushion to absorb demand fluctuations
  • 135. 135 Three Factors that Decide the Level of Inventory Order Cycle Time Desired Customer Service Levels Use of Inventories as a Strategic Tool
  • 136. 136 International Packaging Issues Packaging is instrumental in getting the merchandise to the destination in a safe, presentable condition. Because of the added stress of international shipping, packaging that is adequate for domestic shipping may be inadequate for international shipping. Packaging considerations that should be taken into account are environmental conditions and weight. One solution to the packaging problem has been the development of inter-modal containers. Cost attention must be paid to international packaging.
  • 137. 137 Storage Facilities A stationary period is involved when merchandise becomes inventory stored in warehouses. The location decision addresses how many distribution centers to have and where to locate them. Storage facilities abroad can differ in availability and quality. The logistician should analyze international product sales and then rank order products according to warehousing needs.
  • 138. 138 Special Trade Zones Foreign trade zones are areas where foreign goods may be held or processed and then re-exported without incurring duties. Trade zones can be useful as transshipment points to reduce logistics cost and redesign marketing approaches. Governments and firms benefit from foreign trade zones.
  • 139. 139 Export Processing Zones and Economic Zones In export processing zones, special rules apply that are different in other regions of the country. These zones usually provide tax-free and duty-free treatment for production facilities whose output is destined abroad. The maquiladoras of Mexico are one example of a program that permits firms to take advantage of sharp differentials in labor costs. Through the creation of special economic zones, the Chinese government has attracted many foreign investors bringing in millions of dollars.
  • 140. 140 Centralized Logistics Management In international logistics, the existence of a headquarters staff that retains decision-making power over logistics is important. To avoid internal problems, both headquarters staff and local management should report to one person. This individual can contribute an objective view when inevitable conflicts arise in international logistics coordination.
  • 141. 141 Decentralized Logistics Management When a firm serves many diverse international markets, total centralization might leave the firm unresponsive to local adaptation needs. If each subsidiary is made a profit center in itself, each one carries the full responsibility for its performance. Once products are within a specific market, increased input from local logistics operations should be expected and encouraged.
  • 142. 142 Outsourcing Logistics Services The systematic outsourcing of logistics capabilities is a third option. By collaborating with transportation firms, private warehouses, or other specialists, corporate resources can be concentrated on the firm’s core product. One-stop logistics allows shippers to buy all the transportation modes and functional services from a single carrier.
  • 143. 143 The Supply Chain and the Internet Because of the internet, firms are able to conduct many more global comparisons among suppliers and select from a wider variety of choices. When customers have the ability to access a company through the internet, the company must be prepared for 24-hour order-taking and customer service. For all countries, but particularly in developing nations, the issue of universal access to the internet is crucial.
  • 144. 144 Logistics and Security After the terrorist attacks of 2001, companies have to deal with the fact that the pace of international transactions has slowed down and that formerly routine steps will now take longer. Logistics systems and modern transportation systems are often the targets of attacks. The need to institute new safeguards for international shipments will affect the ability of firms to efficiently plan their international shipments.
  • 145. 145 Logistics and the Environment Since environmental laws and regulations differ across the globe, the firm’s efforts need to be responsive to a wide variety of requirements. Reverse distribution systems are instrumental in ensuring that the firm not only delivers the product to the market, but also can retrieve it from the market for subsequent use, recycling, or disposal. Companies need to learn how to simultaneously achieve environmental and economic goals.
  • 146. How Supply Chain Bottlenecks are Creating Environmental Issues
  • 147. Understanding Distribution in the Supply Chain: Role and Significance
  • 148. Where Did the Process of Distribution in Supply Come From? ▶ The process of distribution in supply can be traced back to the early days of commerce. As trade between different regions and cultures began to increase, the need for a system to distribute goods and services became apparent
  • 149. The Evolution of Distribution in Supply ▶ The growth of trade: As trade between different regions and cultures has increased, the need for a system to distribute goods and services has become more important. ▶ The development of new transportation technologies: The development of new transportation technologies, such as railroads and steamships, has made it possible to move goods more quickly and efficiently. ▶ The growth of cities: The growth of cities has created a demand for new distribution methods, as people begin to live farther from where their goods are produced. ▶ The rise of globalization: The rise of globalization has led to even more changes in distribution, as businesses need to find ways to distribute their products to a global market.
  • 150. The Future of Distribution in Supply ▶ The continued growth of e- commerce: E-commerce is growing rapidly, and this is likely to have a significant impact on the way goods and services are distributed. ▶ The development of new technologies: The development of new technologies, such as drones and self-driving vehicles, is likely to revolutionize the way goods and services are distributed. ▶ The changing needs of customers: The needs of customers are constantly changing, and businesses need to be able to adapt their distribution strategies to meet these needs.
  • 151. The Rise and Fall of Montgomery Ward ▶ Montgomery Ward was one of the first major retailers in the United States. The company was founded in 1872 by Aaron Montgomery Ward, and it quickly became a leader in the mail- order business. ▶ Ward's innovation was to offer a wide variety of products at discounted prices through a catalog that was distributed nationwide. ▶ Ward's business model was very successful, and the company grew rapidly during the Industrial Revolution. By the early 1900s, Montgomery Ward was one of the largest retailers in the United States.
  • 152. What Montgomery Ward Did Well ▶ Offered a wide variety of products at discounted prices through its catalog ▶ Catalog was also very well-designed
  • 153. What Montgomery Ward Did Not Do Well ▶ Failed to adapt to the changing retail landscape. ▶ Focused on low prices, which led to a decline in customer satisfaction and a loss of market share
  • 154. Where Montgomery Ward Is Today ▶ The Montgomery Ward brand is now owned by Sears Holdings Corporation. Sears has been struggling financially in recent years, and it is unclear whether the Montgomery Ward brand will be revived.
  • 155. Conclusion ▶ The process of distribution in supply has come a long way since its early days. Today, it is a complex and sophisticated field that is essential to the smooth functioning of the global economy. As businesses continue to grow and expand, the need for efficient and effective distribution systems will only become more important.
  • 156. Definition of Distribution in the Supply Chain ▶ Warehousing: Goods are stored in warehouses until they are needed to be shipped to customers. ▶ Transportation: Goods are transported from the warehouse to the customer using a variety of methods, such as trucks, ships, and airplanes. ▶ Logistics: Logistics is the process of managing the flow of goods through the distribution system. This includes activities such as inventory management, order fulfillment, and transportation scheduling. ▶ Customer service: Customer service is the process of interacting with customers to ensure that they are satisfied with the distribution process. This includes activities such as answering questions, resolving problems, and providing feedback.
  • 157. Role of Distribution in the Supply Chain ▶ Customer satisfaction: Customers expect to receive products when they need them. If products are not delivered on time, customers may become dissatisfied and switch to a competitor. ▶ Profitability: Efficient distribution can help to reduce costs and increase profits. This is because it can help to reduce inventory levels, improve transportation efficiency, and provide better customer service. ▶ Competitive advantage: Efficient distribution can give businesses a competitive advantage. This is because it can help businesses to deliver products more quickly and cheaply than their competitors.
  • 158. Ensuring Smooth Flow of Products to Meet Customer Demands Efficiently ▶ The location of customers: Businesses need to ensure that they have warehouses and distribution centers located in close proximity to their customers. This will help to reduce transportation costs and improve delivery times. ▶ The type of product: The type of product being distributed will also affect the distribution strategy. For example, perishable goods will need to be distributed more quickly than non-perishable goods. ▶ The needs of customers: Businesses need to understand the needs of their customers in order to provide them with the best possible distribution experience. This includes factors such as delivery speed, delivery options, and customer service.
  • 159. Conclusion ▶ Distribution is a critical part of the supply chain. It is responsible for getting goods and services from the producer to the consumer in a timely and efficient manner. By understanding the role of distribution and the factors that affect it, businesses can develop distribution strategies that ensure a smooth flow of products to meet customer demands efficiently.
  • 160. Functions and Responsibilities of a Distributor ▶ Inventory management: Distributors are responsible for managing the inventory of products that they sell. This includes ordering the correct amount of product, storing it in a safe and secure location, and tracking inventory levels. ▶ Order fulfillment: Distributors are responsible for fulfilling orders from customers. This includes picking the products from the warehouse, packing them, and shipping them to the customer. ▶ Customer service: Distributors provide customer service to customers who have questions or problems with their orders. This includes answering questions, resolving problems, and providing feedback. ▶ Marketing and sales: Distributors may also be responsible for marketing and selling products to retailers or other businesses. This includes developing marketing plans, generating leads, and closing sales.
  • 161. Importance of Distributors in Expanding Market Reach ▶ Distributors can play an important role in expanding the market reach of manufacturers. They can help to reach a broader customer base by providing products to retailers in different geographic areas. They can also help to expand market coverage by providing products to retailers in different channels, such as online or brick-and-mortar stores.
  • 162. Understanding the Difference Between Distribution and Logistics ▶ Distribution refers to the process of moving products from the manufacturer to the customer. ▶ Logistics, on the other hand, refers to the overall management of the flow of goods and services. This includes activities such as transportation, warehousing, and inventory management.
  • 163. Distribution's Focus on Product Delivery and Customer Satisfaction ▶ Distribution places emphasis on delivering products to customers and meeting customer demands efficiently. ▶ This includes activities such as order fulfillment, customer service, and inventory management. ▶ Distributors strive to ensure that customers receive the products they need when they need them. ▶ Distributors also strive to provide excellent customer service, such as answering questions and resolving problems quickly.
  • 164. Conclusion ▶ Distributors play an important role in the supply chain by providing a link between producers and consumers. ▶ Distributors help to ensure that products are available when and where customers need them, and they can also provide valuable services such as inventory management and order fulfillment. ▶ By focusing on product delivery and customer satisfaction, distributors can help manufacturers to increase sales and improve their reputation.
  • 165. Additional Information ▶ Marketing and sales support: Distributors may help manufacturers to develop marketing plans, generate leads, and close sales. ▶ Financial services: Distributors may offer financial services to manufacturers, such as credit, financing, and inventory management. ▶ Technical support: Distributors may provide technical support to manufacturers, such as product training and troubleshooting
  • 166. Impact of Logistics' Emphasis on Transportation, Warehousing, and Inventory Management ▶ Logistics is the process of planning, organizing, and managing the flow of goods and services from the point of origin to the point of consumption. It encompasses a wide range of activities, including transportation, warehousing, inventory management, and customer service. ▶ Transportation is the movement of goods from one location to another. It is a critical part of logistics, as it determines how quickly and efficiently goods can be delivered to customers. There are a variety of transportation options available, each with its own advantages and disadvantages. ▶ Warehousing is the storage of goods in a secure facility. It is important for businesses to have enough warehouse space to store their products, as well as the right equipment to handle the loading and unloading of goods. ▶ Inventory management is the process of ensuring that the right amount of goods is available in the right place at the right time. This is important for businesses to avoid stockouts, which can lead to lost sales, and to avoid overstocking, which can lead to unnecessary costs.
  • 167. Importance of Effective Distribution Management ▶ Supply chain performance: Effective distribution management can help to improve supply chain performance by reducing lead times, improving inventory turns, and increasing customer service levels. ▶ Cost control: Effective distribution management can help to control costs by optimizing transportation routes, negotiating favorable freight rates, and managing inventory levels. ▶ Customer satisfaction: Effective distribution management can help to improve customer satisfaction by ensuring that products are delivered on time, in good condition, and at the right price.
  • 168. Impact on Supply Chain Performance and Customer Satisfaction ▶ Reduce lead times: By optimizing transportation routes and managing inventory levels, well-managed distribution can help to reduce lead times, which can improve customer satisfaction. ▶ Improve inventory turns: By managing inventory levels effectively, well-managed distribution can help to improve inventory turns, which can reduce costs. ▶ Increase customer service levels: By ensuring that products are delivered on time, in good condition, and at the right price, well-managed distribution can help to increase customer service levels.
  • 169. Role of Distribution Management in Cost Control and Optimization ▶ Optimize transportation routes: By optimizing transportation routes, well-managed distribution can help to reduce transportation costs. ▶ Negotiate favorable freight rates: By negotiating favorable freight rates, well-managed distribution can help to reduce transportation costs. ▶ Manage inventory levels: By managing inventory levels effectively, well-managed distribution can help to reduce inventory carrying costs.
  • 170. Conclusion ▶ Logistics is a complex and essential part of the supply chain. Effective distribution management can help to optimize supply chain performance, cost control, and customer satisfaction. By emphasizing transportation, warehousing, and inventory management, logistics can support the distribution process and help businesses achieve their goals.
  • 171. Additional Information ▶ Increase market share: By providing superior customer service and meeting customer demand, well-managed distribution can help businesses to increase market share. ▶ Improve brand reputation: By delivering products on time and in good condition, well-managed distribution can help to improve brand reputation. ▶ Reduce risk: By managing inventory levels effectively, well- managed distribution can help to reduce risk.
  • 172. Improved Inventory Control and Demand Forecasting ▶ By tracking inventory levels and sales data, distribution managers can identify trends and patterns that can be used to forecast future demand. This information can then be used to ensure that the right amount of inventory is on hand to meet customer demand. ▶ By using data analytics, distribution managers can identify and optimize distribution routes and schedules. This can help to reduce transportation costs and improve delivery times, which can lead to improved inventory turnover. ▶ By working closely with suppliers, distribution managers can ensure that there is a smooth flow of goods throughout the supply chain. This can help to reduce the risk of stockouts and ensure that customers receive their orders on time.
  • 173. Better Coordination Between Suppliers, Manufacturers, and Retailers ▶ Distribution management can also foster better coordination among supply chain partners. This can be done by sharing information about inventory levels, sales data, and demand forecasts. By working together, supply chain partners can ensure that goods are delivered to the right place at the right time, which can lead to improved efficiency and profitability.
  • 174. Enhanced Customer Service and Satisfaction ▶ By ensuring that products are delivered on time and in good condition, distribution managers can help to improve customer satisfaction. This can lead to repeat business and increased sales. ▶ By providing accurate information about product availability, distribution managers can help customers to make informed purchasing decisions. This can help to reduce customer frustration and improve the overall customer experience. ▶ By offering flexible delivery options, distribution managers can meet the needs of different customers. This can help to improve customer satisfaction and loyalty.
  • 175. Optimal Use of Resources and Reduced Operating Costs ▶ Optimizing transportation routes and schedules. This can help to reduce transportation costs and improve delivery times. ▶ Managing inventory levels effectively. This can help to reduce inventory carrying costs and improve inventory turnover. ▶ Using data analytics to identify and optimize distribution processes. This can help to reduce waste and improve efficiency.
  • 176. Conclusion ▶ Effective distribution management can play a vital role in improving inventory control, demand forecasting, coordination among supply chain partners, customer service, and satisfaction. By optimizing the flow of goods and services throughout the supply chain, distribution managers can help businesses to reduce costs, improve efficiency, and increase profitability.
  • 177. Additional Information ▶ Increase market share: By providing superior customer service and meeting customer demand, well- managed distribution can help businesses to increase market share. ▶ Improve brand reputation: By delivering products on time and in good condition, well-managed distribution can help to improve brand reputation. ▶ Reduce risk: By managing inventory levels effectively, well-managed distribution can help to reduce risk.
  • 178. Supply Chain Complexity and Global Operations ▶ Inventory management: Managing inventory in a global supply chain can be complex, as businesses must consider factors such as different product regulations, varying demand patterns, and longer lead times. ▶ Demand fluctuations: Demand for products can fluctuate rapidly in a global market, which can make it difficult to forecast demand and ensure that the right amount of inventory is on hand. ▶ Transportation and logistics: Transportation and logistics can be more challenging in a global supply chain, as businesses must often deal with multiple carriers and different shipping regulations. ▶ Maintaining service quality and consistency: Maintaining service quality and consistency can be difficult in a global supply chain, as businesses must often deal with different cultures and languages.
  • 179. Inventory Management and Demand Fluctuations ▶ The challenges of inventory management and demand fluctuations are closely related. When demand for a product fluctuates, businesses must adjust their inventory levels accordingly.
  • 180. Inventory Management and Demand Fluctuations ▶ Inventory management is the process of planning, organizing, and controlling the flow of goods and materials from the point of production to the point of consumption. Demand fluctuations refer to the changes in the demand for a product or service over time.
  • 181. Impact of Inventory Management Challenges and Demand Fluctuations on Distribution Activities ▶ The impact of inventory management challenges and demand fluctuations on distribution activities can be significant. ▶ Demand fluctuations can also have a significant impact on distribution activities.
  • 182. Strategies for Managing Inventory and Demand Fluctuations ▶ Demand forecasting: Businesses can use demand forecasting to predict future demand for their products. This information can then be used to adjust inventory levels accordingly. ▶ Just-in-time (JIT) inventory management: JIT inventory management is a system where businesses only order the amount of inventory they need to meet immediate demand. This can help businesses to reduce inventory costs and improve efficiency. ▶ Demand pooling: Demand pooling is a strategy where businesses pool their demand for a product or service. This can help businesses to get better pricing from suppliers and improve efficiency. ▶ Flexible manufacturing: Flexible manufacturing is a system where businesses can quickly and easily change the production of a product to meet changing demand. This can help businesses to adapt to demand fluctuations and avoid stockouts.
  • 183. Inventory management and demand fluctuations are important challenges that businesses must face. By using the strategies outlined above, businesses can manage these challenges and ensure that they have the right amount of inventory to meet customer demand.
  • 184. Transportation and Logistics Challenges ▶ Transportation and logistics can also be challenging in a global supply chain. Businesses must often deal with multiple carriers and different shipping regulations. This can make it difficult to track shipments and ensure that they arrive on time.
  • 185. Maintaining Service Quality and Consistency ▶ Maintaining service quality and consistency is important for any business, but it can be especially challenging in a global supply chain.
  • 186. 186 Operations Management = OM Management of ANY activities/process that create goods and provide services Exemplary Activities: Forecasting, Scheduling, Quality management Why to study OM At a typical manufacturing company Profit 5% OM Cost 21% Marketing Cost 26% Manufacturing Cost 48%
  • 187. 187 The management of systems or processes that create goods and/or provide services Organization Finance Operations Marketing The distinct –active- role of operations: Inputs become Outputs after some Transformation Operations Management = OM
  • 188. MGT 236 188 Typical Organization Chart
  • 189. 189 Operations example in Manufacturing: Food Processing INPUTS PROCESS OUTPUTS Raw vegetables Cleaning Clean vegetables Metal sheets Cutting/Rolling/Welding Cans Energy, Vegetables Cutting Cut vegetables Energy, Water, Vegetables Cooking Boiled vegetables Energy, Cans, Boiled vegetables Placing Can food
  • 190. 190 Types of Operations Operation Examples Goods producing Farming, mining, construction Storage/transportation Warehousing, trucking, mail, taxis, buses, hotels, location Exchange Trade, retailing, wholesaling, renting, leasing, loans Entertainment Radio, movies, TV, concerts, recording Communication Newspapers, journals, magazines, radio, TV, telephones, satellite
  • 191. 191 Why OM? Core of all business organizations Many areas interrelated with OM activities Management of operations is critical to create and maintain competitive advantages
  • 192. 192 Organization of Businesses Three basic functions Operations/Production Goods oriented (manufacturing and assembly) Service oriented (health care, transportation and retailing) Value-added (the essence of the operations functions) Finance-Accounting Budgets (plan financial requirements) Economic analysis of investment proposals Provision of funds (the necessary funding of the operations)
  • 193. 193 Organization of Businesses (Cont.) Marketing Selling Promoting Assessing customer wants and needs Communicating those needs to operations The need for working closely Operations Finance Marketing
  • 195. 195 Systems (Holistic) Approach Emphasizes interrelations among subsystems. A systems approach is essential whenever something is being designed, redesign implemented, or improved. It is important to take into account the impact on all parts of the system. Example: A new feature is added to a product. Designer must take into account how customers will view the change, instruction for using new feature, the cost, training of workers, production schedule, quality standard, advertising must be informed about the new feature.
  • 196. 196 Systems Approach “The whole is greater than the sum of the parts.” Suboptimization
  • 197. 197 Value Added Value added: The difference between cost of inputs and price (??) of outputs. Is this definition right? Should value added include profit? Value added: The difference between the cost of inputs and the (market or fair) value or price of outputs.
  • 199. MGT 236 199 OM’s Transformation Role To add value Increase product value at each stage Value added is the net increase between output product value and input material value Provide an efficient transformation Efficiency – means performing activities well for least possible cost
  • 200. 200 Degree of Standardization ! Standardized output Take advantage of standardized methods, less skilled workers, materials… Example: Iron, Wheat, most of commodities Customized output Each job is different Workers must be skilled Example: Hair cut
  • 201. 201 Manufacturing (=Goods) vs. Service operations Production of goods (goods oriented) Tangible products Automobile Refrigerator Services (TV and auto repair, lawn care) Government Regulatory bodies, FAA, FDA Wholesale/retail Financial services Education
  • 202. 202 Similarities for Service/Manufacturers Both use technology Both have quality, productivity, & response issues Both must forecast demand Both can have capacity, layout, and location issues Both have customers, suppliers, scheduling and staffing issues
  • 203. 203 Goods vs. Service Operations (Cont) Differences 1. Customer contact 2. Uniformity of input 3. Labor content of jobs 4. Uniformity of output 5. Measurement of productivity 6. Production and delivery 7. Quality assurance 8. Amount of inventory
  • 204. 204 Manufacturing vs. Service ! Characteristic Manufacturing Service Output Tangible Intangible Customer contact Low High Uniformity of output High Low Labor content Low High Uniformity of input High Low Measurement of productivity Easy Difficult Opportunity to correct quality problems Easy Difficult
  • 205. 205 Steel production Automobile fabrication Home remodeling Retail sales Auto Repair Appliance repair Maid Service Manual car wash Teaching Lawn mowing High percentage goods Low percentage service Goods-service Continuum Low percentage goods High percentage service
  • 206. 206 U.S. Manufacturing vs. Service Employment 0 20 40 60 80 100 45 50 55 60 65 70 75 80 85 90 95 00 Year Percent Year Mfg. Service 45 79 21 50 72 28 55 72 28 60 68 32 65 64 36 70 64 36 75 58 42 80 44 46 85 43 57 90 35 65 95 32 68 00 30 70 Manufacturing vs. Service Industries in US
  • 207. Growth of the Service Sector Service sector growing to 50-80% of non-farm jobs Global competitiveness Demands for higher quality Huge technology changes Time based competition Work force diversity
  • 208. 208 Responsibilities of Operations Management Planning Capacity, utilization Location Choosing products or services Make or buy Layout Projects Scheduling Market share Plan for risk reduction, plan B? Forecasting
  • 209. 209 OM Decisions All organizations make decisions and follow a similar path First decisions very broad – Strategic decisions Strategic Decisions – set the direction for the entire company; they are broad in scope and long-term in nature
  • 210. 210 OM Decisions Following decisions focus on specifics - Tactical decision Tactical decisions: focus on specific day-to-day issues like resource needs, schedules, & quantities to produce are frequent Strategic decisions less frequent Tactical and Strategic decisions must align
  • 212. 212 Operations Managers Controlling Inventory Quality Costs Organization Degree of standardization Subcontracting Process selection Staffing Hiring/lay off Use of overtime Incentive plans Job assignments
  • 213. 213 Operations Management includes: Forecasting Capacity planning Scheduling Managing inventories Assuring quality Motivating employees Deciding where to locate facilities And more . . . Scope of Operations Management
  • 214. 214 Help comes from Models A structure which has been built purposefully to exhibit features and characteristics of some other object. Do not use “thing” or “something” in a definition. For Improved understanding and communication Experimentation Standardization for analysis Abstraction vs. computability
  • 215. 215 Modeling ! Use models Physical models (prototypes) Schematic models (Graphs, charts, pictures) Mathematical models, Statistical models Inventory models Linear programming Queuing techniques Project management models
  • 216. 216 What type of models Simulation models : to test a proposed idea – Monte Carlo Simulation Optimization models : to create an optimal idea – Linear programming Pattern recognition models : to recognize a pattern – Statistics, Forecasting, data mining
  • 218. 218 Models Are Beneficial Easy to use, less expensive Require users to organize Increase understanding of the problem Consistent tool Standardized format Specific objectives Systematic approach to problem solving Analysis of tradeoffs Enable “what if” questions Power of mathematics
  • 219. 219 Pareto Phenomenon • A few factors account for a high percentage of the occurrence of some event(s). • 80/20 Rule - 80% of problems are caused by 20% of the activities. How do we identify the vital few?
  • 220. 220 Historical Evolution of Operations Management Industrial revolution (1770’s) Scientific management (1911) Mass production Interchangeable parts Division of labor Human relations movement (1920-60) Unemployment insurance Pension plans Decision models (1915, 1960-70’s) Influence of Japanese manufacturers (1970-1990)
  • 221. MGT 236 221 Historical Development con’t Reengineering 1990s Global competition 1980s Flexibility 1990s Time-Based Competition 1990s Supply chain Management 1990s Electronic Commerce 2000s Outsourcing & flattening of world 2000s For long-run success, companies must place much importance on their operations
  • 222. 222 Trends in Business Major trends The Internet, e-commerce, e-business Management technology Globalization Management of supply chains Agility
  • 223. 223 Recent Trends ! Worker involvement Environmental issues, emission reductions are popular after Central European floods Service economy in US, foreign production E-business – information technology Supply chain management Total Quality Management Globalization, emerging markets, NAFTA Lean Production – see the next page
  • 224. 224 Production systems classified Craft Production : System in which highly skilled workers use simple, flexible tools to produce small quantities of customized goods. Carpenter Lean production : System that uses minimal amounts of resources to produce a high volume of high-quality goods with some variety. Dell Mass production: System in which lower-skilled workers use specialized machinery to produce high volumes of standardized goods. Ford
  • 225. 225 Production systems classified Agile=Lean manufacturing It provides flexibility to switch quickly and economically from one product design to another with little disruption. This characteristic, in turn enables faster response to changes in customer demand. A sophisticated computerized inventory control system allows the plant to keep track of large number of parts. Keys to being an agile manufacturer are : Reduction in inventories, Reduction in turnaround times, Availability of automated flexible machinery, Rapid collection and processing of information
  • 226. 226 Suppliers’ Suppliers Direct Suppliers Producer Distributor Final Consumer Simple Product Supply Chain Supply Chain: A sequence of activities and organizations involved in producing and delivering a good or service
  • 227. 227 Stage of Production Value Added Value of Product Farmer produces and harvests wheat $0.15 $0.15 Wheat transported to mill $0.08 $0.23 Mill produces flour $0.15 $0.38 Flour transported to baker $0.08 $0.46 Baker produces bread $0.54 $1.00 Bread transported to grocery store $0.08 $1.08 Grocery store displays and sells bread $0.21 $1.29 Total Value-Added $1.29 A Supply Chain for Bread
  • 228. 228 Other Important Trends Ethical behavior Operations strategy Working with fewer resources Cost control and productivity Quality and process improvement Increased regulation and product liability Lean production
  • 229. MGT 236 229 Today’s OM Environment Customers demand better quality, greater speed, and lower costs Companies implementing lean system concepts – a total systems approach to efficient operations Recognized need to better manage information using ERP and CRM systems Increased cross-functional decision making
  • 230. MGT 236 230 OM in Practice OM has the most diverse organizational function Manages the transformation process OM has many faces and names such as; V. P. operations, Director of supply chains, Manufacturing manager Plant manger, Quality specialists, etc. All business functions need information from OM in order to perform their tasks
  • 232. 232 OM Across the Organization Most businesses are supported by the functions of operations, marketing, and finance The major functional areas must interact to achieve the organization goals
  • 233. 233 OM Across the Organization – con’t Marketing is not fully able to meet customer needs if they do not understand what operations can produce Finance cannot judge the need for capital investments if they do not understand operations concepts and needs Information systems enables the information flow throughout the organization Human resources must understand job requirements and worker skills Accounting needs to consider inventory management, capacity information, and labor standards
  • 234. 234 Summary Definition of OM OM’s relationship with Marketing, Finance and Accounting Goods vs. service industries OM issues, trends and models Manufacturing systems
  • 235. 235 Highlights OM is the business function that is responsible for managing and coordinating the resources needed to produce a company’s products and services. The role of OM is to transform organizational inputs into company’s products or services outputs OM is responsible for a wide range of decisions, ranging from strategic to tactical. Organizations can be divided into manufacturing and service organizations, which differ in the tangibility of the product or service
  • 236. 236 Highlights – con’t Many historical milestones have shaped OM. Some of these are the Industrial Revolution, scientific management, the human relations movement, management science, and the computer age OM is highly important function in today’s dynamic business environment. Among the trends with significant impact are just-in-time, TQM, reengineering, flexibility, time-based competition, SCM, global marketplace, and environmental issues OM works closely with all other business functions