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Supply Chain Management

DAVIS AQUILANO CHASE PowerPoint Presentation by Charlie Cook. Supply Chain Management. F O U R T H E D I T I O N. chapter 13. © The McGraw-Hill Companies, Inc., 2003. Chapter Objectives.

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Supply Chain Management

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  1. DAVIS AQUILANO CHASE PowerPointPresentation by Charlie Cook Supply Chain Management F O U R T H E D I T I O N chapter 13 © The McGraw-Hill Companies, Inc., 2003

  2. Chapter Objectives • Introduce the concept of a firm’s supply chain and show how it has evolved over time to its present status. • Identify current trends that are affecting the characteristics of a supply chain. • Present the requirements necessary for a successful supply chain. • Discuss the impact of technology on a firm’s supply chain. • Define in-transit inventory costs and show how they impact the purchasing decision. Fundamentals of Operations Management 4e

  3. Managerial Issues • Concentration of resources on the firm’s core competencies such as supply chain management. • Increasing proportion of purchased goods and services as inputs into products. • Increased pressure to reduce inventories. • Applying advances in information technology to strategically manage supplier relationships and the supply chain itself. Fundamentals of Operations Management 4e

  4. Definition of Supply Chain Management • Supply Chain • The steps and the firms that perform these steps in the transformation of raw inputs into finished products bought by customers. • Inbound Logistics • The delivery of goods and services that are purchased from suppliers and/or their distributors. • Outbound Logistics • The delivery of goods and services that are sold to a firm’s customers and/or distributors. Fundamentals of Operations Management 4e

  5. A Company’s Supply Chain Exhibit 13.1 Fundamentals of Operations Management 4e

  6. The Evolution of Supply Chain Management Exhibit 13.2a Fundamentals of Operations Management 4e

  7. The Evolution of Supply Chain Management Exhibit 13.2b Fundamentals of Operations Management 4e

  8. The Trend Toward Reducing the Number of Suppliers Exhibit 13.3 Fundamentals of Operations Management 4e

  9. Key Terms • Supplier-Managed Inventories • Inventories in a firm’s facility that are the responsibility of the supplier to maintain and to replenish as necessary. • Consignment Inventories • Inventories that are physically present in a firm’s facility but that are still owned by the supplier. • EDI (electronic data exchange) • Direct link between a manufacturer’s database and that of the vendor. Fundamentals of Operations Management 4e

  10. Key Terms (cont’d) • Quick Response (QR) Programs • Just-in-time replenishment system using bar-code scanning and EDI. • Efficient Customer Response (ECR) • Strategy for bringing distributors, suppliers, and grocers together using bar-code scanning and EDI. Fundamentals of Operations Management 4e

  11. ReducedNumber ofSuppliers Supplier-ManagedInventories IncreasedCompetition ContingentInventories Supply Chain ShorterProductLife Cycles Shared orReducedRisk Advances InTechnology Factors Impacting the Supply Chain Fundamentals of Operations Management 4e

  12. Trust Long-TermRelationships Individual Strengths InformationSharing Requirements for Successful Supply Chain SuccessfulSupply ChainManagement Fundamentals of Operations Management 4e

  13. The Role of Logistics in The Supply Chain • Partnering • Establishing a strategic alliance or partnership with a firm that specializes in transportation or logistics. • Using a logistics partner to store finished goods at the logistics partner’s hub or distribution center. Fundamentals of Operations Management 4e

  14. The Role of Logistics in The Supply Chain • In-Transit Inventory Costs • Combination of transportation and carrying costs associated with delivery of raw materials and components that are inbound to the plant. Total annual (inbound) costs =Transportation costs + In-transit inventory carrying costs + Purchase costsTC = DM + (X/365)iDC + DCD = Annual demandM = Transportation cost per unitX = Transportation time in daysi = Annual cost of capitalC = Unit cost per item Fundamentals of Operations Management 4e

  15. The Trade-Off between Transportation Costsand the Cost of Capital with Respect to the Shipment of Products Exhibit 13.4 Fundamentals of Operations Management 4e

  16. Disintermediation • Disintermediation • The trend to reduce many of the steps in the supply chain by reducing the number of intermediaries in the chain. • Cross-docking • Direct-to-store shipments • JIT II®: vendor and customer work closely together, eliminating many of the intermediate steps that now exist. • Vendor representative located at facility • Direct database linkage with vendor’s manufacturing facility. Fundamentals of Operations Management 4e

  17. Major SCM Software Packages Exhibit 13.5 Fundamentals of Operations Management 4e

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