operations 13-14 473.31 fall 2015 bruce duggan providence university college
DESCRIPTION
Learning Objectives Review 1.What are some important sourcing considerations beyond simple material purchasing? 2.What are some of the contributing factors that cause the bullwhip effect in supply chains? 3.How can supply and demand characteristics influence how supply chains should be structured? 4.What are some reasons that can justify outsourcing? 5.What is meant by "green sourcing" and what should be included in a total cost of ownership analysis? 6.What are some metrics to measure supply chain performance? 7.What are the basic building blocks required for an effective mass customization program? 8.What are the five steps involved in collaborative planning, forecasting, and replenishment (CPFR)? 9.What is a reverse supply chain?TRANSCRIPT
![Page 1: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/1.jpg)
Operations13-14
473.31
Fall 2015
Bruce Duggan
Providence University College
![Page 2: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/2.jpg)
SummaryManaging your supply chain effectively is a prerequisite for business success today.Supply chain design should include sourcing, inventory management, logistics, level of vertical integration, performance measurement, product design, and the design of the reverse supply chain.Outsourcing is an important way to reduce cost, while improving the strategic focus of the firm.
![Page 3: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/3.jpg)
Learning Objectives Review1. What are some important sourcing considerations beyond simple material purchasing?
2. What are some of the contributing factors that cause the bullwhip effect in supply chains?
3. How can supply and demand characteristics influence how supply chains should be structured?
4. What are some reasons that can justify outsourcing?
5. What is meant by "green sourcing" and what should be included in a total cost of ownership analysis?
6. What are some metrics to measure supply chain performance?
7. What are the basic building blocks required for an effective mass customization program?
8. What are the five steps involved in collaborative planning, forecasting, and replenishment (CPFR)?
9. What is a reverse supply chain?
![Page 4: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/4.jpg)
Supply Chain Management Supply chain management involves optimizing the entire supply chain operations for the product by taking a systems approach to managing the flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end costumer.
![Page 5: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/5.jpg)
Supply Chain Management
12-4
![Page 6: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/6.jpg)
Strategic SourcingStrategic Sourcing is the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the business.
![Page 7: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/7.jpg)
Strategic Sourcing
![Page 8: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/8.jpg)
Bullwhip EffectBullwhip effect refers to the variability in demand is magnified as we move from the customer to the product in the supply chain.
12-7
![Page 9: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/9.jpg)
Bullwhip Effect
12-8
![Page 10: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/10.jpg)
Functional and Innovative ProductsFunctional products
• staples that people buy in a wide range of retail outlets, such as grocery stores and gas stations
Innovative products • products such as fashionable clothes and personal computers that typically
have a life cycle of just a few months
![Page 11: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/11.jpg)
Functional and Innovative Products
![Page 12: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/12.jpg)
Hau Lee’s Concepts of Supply Management
12-11
![Page 13: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/13.jpg)
Hau Lee’s Concepts of Supply ManagementHau Lee’s approach to supply chain (SC) is one of aligning SCs with the uncertainties revolving around the supply process side of the SCA stable supply process has mature technologies and an evolving supply process has rapidly changing technologiesTypes of SC’s
• Efficient SC’s• Risk-Hedging SC’s• Responsive SC’s• Agile SC’s
![Page 14: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/14.jpg)
Logistics• the management functions that support the complete cycle of material flow:
o from the purchase and internal control of production materials…o to the planning and control of work-in-process….o to the purchasing, shipping, and distribution of the finished product
![Page 15: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/15.jpg)
Vertical Integration and OutsourcingVertical Integration
• the proportion of the supply chain that the company owns
Outsourcing • the act of moving a firm’s internal activities and decision responsibility to
outside providers
![Page 16: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/16.jpg)
Reasons for Outsourcing
![Page 17: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/17.jpg)
Greensourcingbenefits:
• Many firms are looking to their supply chains to deliver "green" results. • A significant area of focus relates to how a firm works with suppliers where
the opportunity to save money and benefit the environment might not be a strict trade-off proposition.
• Financial results can often be improved through both cost reductions and boosting revenues.
![Page 18: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/18.jpg)
Greensourcing
![Page 19: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/19.jpg)
Total Cost of Ownership (TCO)components:
• Transportation• Installation• Inventory management• Administration• Order processing• Training employees• Data acquisition and evaluation• Operating and maintenance• Disposal.
![Page 20: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/20.jpg)
LO5
Total Cost of Ownership (TCO)
Copyright © 2013 McGraw-Hill Ryerson Limited 12-16
![Page 21: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/21.jpg)
Measuring Supply Chain Performance
![Page 22: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/22.jpg)
Inventory Turnover Calculation
![Page 23: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/23.jpg)
Mass CustomizationMass customizationthe ability of a company to deliver highly customized products and services to different customers around the world.
![Page 24: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/24.jpg)
Process PostponementThe key to mass customization is effectively postponing the tasks of differentiating a product for a specific customer until the latest possible point in the supply-chain network
![Page 25: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/25.jpg)
Mass CustomizationPrinciple 1: A product should be designed so it consists of independent modules that can be assembled into different forms of the product easily and inexpensively.
Copyright © 2013 McGraw-Hill Ryerson Limited
LO7
12-24
![Page 26: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/26.jpg)
Mass CustomizationPrinciple 2: Manufacturing and service processes should be designed so that they consist of independent modules that can be moved or rearranged easily to support different distribution network designs.
Copyright © 2013 McGraw-Hill Ryerson Limited
LO7
12-25
![Page 27: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/27.jpg)
Mass CustomizationPrinciple 3: The supply network should be designed to provide two capabilities.
• First, the supply network should supply the basic product to the facilities performing the customization in an cost-effective manner.
• Second, the supply network must have the flexibility and the responsiveness to take individual customers’ orders and deliver the finished, customized good quickly.
Copyright © 2013 McGraw-Hill Ryerson Limited
LO7
12-26
![Page 28: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/28.jpg)
Collaborative Planning, Forecasting, and Replenishment (CPFR) Collaborative Planning, Forecasting, and Replenishment (CPFR)
• a technique used to coordinate demand forecasting, production and purchase planning, and inventory replenishment between supply chain trading partners.
![Page 29: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/29.jpg)
Collaborative Planning, Forecasting, and Replenishment (CPFR)
Step 1. Creation of a front-end partnership agreement. Step 2. Joint business planning. Step 3. Development of demand forecasts. Step 4. Sharing forecasts. Step 5. Inventory replenishment.
![Page 30: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/30.jpg)
Collaborative Planning, Forecasting, and Replenishment (CPFR)
Copyright © 2013 McGraw-Hill Ryerson Limited
LO8
12-29
![Page 31: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/31.jpg)
Reverse Supply ChainReverse Supply Chain
• a series of activities required to retrieve a used product or return from a customer and either dispose of it or reuse it
![Page 32: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/32.jpg)
Reverse Supply ChainFive Components:
• Product acquisition• Reverse logistics• Inspection and disposition• Reconditioning• Distribution and sales
![Page 33: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/33.jpg)
Reverse Supply Chain
12-32
![Page 34: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/34.jpg)
The Successful Supply ChainSupply chains should be customized.Partnerships are important.Information should be shared.Holistic internal supply chain management.
![Page 35: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/35.jpg)
End of Chapter 13
![Page 36: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/36.jpg)
Assigned problems for ch 13Probs 1 & 4
• Hin
Probs 2 & 3• Ken
![Page 37: Operations 13-14 473.31 Fall 2015 Bruce Duggan Providence University College](https://reader035.vdocuments.site/reader035/viewer/2022062306/5a4d1af77f8b9ab059981e85/html5/thumbnails/37.jpg)
Final Exam (take-home)company pages topic assigned to
Eastern Gear Ltd. 450-453 3 Operations strategy & process design Hin
US Stroller 453-458 5 Pull system vs manufacturing cells
3M 467-475 8 Quality (6 Sigma)
Merriwell Beg 504-505 2 Forecasting Ken
Consolidated Electric 516-517 2 Inventory control
Southern Toro 520-526 6 Inventory management Ken
Toys Plus 527-530 3 Master production schedule Hin