FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

Geza P. Bottlik Page 1

OUTLINE• Questions? Comments?

• Stories or experiences with supply chains?

• Take roll

• Chapter 1 and 2 (Chopra)

• Quiz next Tuesday

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

Geza P. Bottlik Page 2

Strategic Framework for Analyzing Supply Chains

• Chapter 1 – Understanding

• Chapter 2 – Performance

• (Chapter 3 – Drivers and Obstacles)

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

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Understanding

• What is a supply chain?

– What did you learn about supply chains that you did not

think about before?

• Decision Phases

– Which phase is of the most interest to you?

• Processes

– Why was this included in the chapter?

• Importance

– Examples – what did you think of the authors’ choice of

examples?

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

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What is a supply chain?

• All the activities required to fill a customer’s order

• Objective – Satisfy the customer’s requirements

– Do customers know what they want? How do they express their requirements?

• Maximize the overall value that is generated

- How should the value be distributed?

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

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Phases

• Design

– Decide on structure

• Planning

– Define operating policies for short term operations

– Annual forecast

• Operation

– Implement operating policies

FACILITIES PLANNING ISE310LSESSION 4

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Process View

• Cycles

– Customer

– Retailer

– Distributor

– Manufacturer

– Supplier

• Push/pull

– Push : initiated by anticipation of orders

– Pull : initiated by a customer order

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

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Importance

• Can make or break a company

FACILITIES PLANNING ISE310LSESSION 4

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Examples

• Gateway- A direct sales manufacturer

• 7-Eleven – A convenience store

• W.W. Granger and McMaster-Carr – Distributors of MRO

(Maintenance, Repair and Operational) products

• Toyota - A Global Auto Manufacturer

• Amazon.com – An e-business

– What examples would you have used?

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Performance - Uncertainty

• Demand uncertainty – customers’ demand for a product

– What else is uncertain?

FACILITIES PLANNING ISE310LSESSION 4

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Performance - Responsiveness

• Wide ranges of quantities

• Short lead times

• Large variety

• Innovation

• Service level – what do you think this means?

• Supply uncertainty

• Responsiveness comes at a cost

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

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Performance – Strategic fit

• Match the supply chain’s responsiveness to

the implied uncertainty of supply and demand

• Balance between responsiveness and

effectiveness (cost)

FACILITIES PLANNING ISE310LSESSION 4

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Performance – Product Life Cycle

• Demand – uncertain to relatively certain

• Margins from high to low

• Availability essential early to capture the market

• Price – unimportant to important

FACILITIES PLANNING ISE310LSESSION 4

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Performance – Inter-company Scope

• A strategic fit between companies in a supply chain is

important because competition is shifting:

– From company vs. company

– To supply chain vs. supply chain

FACILITIES PLANNING ISE310LSESSION 4

Chapters 1_2, September 3, 2015

Geza P. Bottlik Page 14

“Mr. Osborne, may I be excused? My brain is full”