Exam 1 Flashcards
Supply Chain Management
Planning and managing of all activities involved in sourcing, procurement, conversion and all logistics management activities.
Two dimensions of supply chain excellence
Cost advantage
Lower end-to-end delivered cost
Value advantage
Creating superior customer value through enhanced service
Forces transforming supply chain
Relentless pressure to reduce costs
Pursuits of new markets
Product innovation to fuel growth
Lights out facilities
Factories that have the capability of being run by robots that operate continuously in the dark
Substitutability
Informations, Inventory and capacity/capability are all substitutes for each other in any system (The triangle)
Fastest growing supply chain initiative
Sustainability
Corporate strategy
defines the set of customer needs a firm seeks to satisfy through its products and services. Specifies the portfolio of new products that the company will try to develop.
Competitive strategy
is defined based on how the customer prioritizes product cost, delivery time, variety, and quality
Marketing and sales strategy
specifies how the market will be segmented and product positioned, priced, and promoted.
Manufacturing and supply chain strategy
process of selecting, implementing and controlling operations logistics design that best provides the company with competitive advantage (meets or exceeds company’s marketing and financial goals).
Continuum of four stages
Stage 1 - Internally neutral, correct the worst problems
Stage 2 - Externally neutral, adopt industry’s best practices
Stage 3 - Internally supportive, Link operations and supply chain with business strategy
Stage 4 - Externally supportive, give an operations and supply chain advantage
Order winners
Characteristics or capabilities that tip a customer to purchase from one firm over another
Order qualifiers
Characteristics or capabilities which allow serious consideration of product/service/firm by buyers. Does not win an order
Order Losers
Things that prevent repeat sales once an initial sale has been made
Supply chain strategies
Efficient supply chain - Economies of scale, low demand uncertainty, low supply uncertainty, basic apparel, food, oil
Responsive supply chain - Changing consumer needs, mass customization, build to order, High demand uncertainty, low supply uncertainty, fashion apparel, computer
Risk-hedging supply chain - Pooled services, multiple supply, share inventory, Low demand uncertainty, High supply uncertainty (hydroelectric power
Agile supply chain - responsive to changing needs, High demand uncertainty, High supply uncertainty, telecom, high-end computers
Best manufacturing an supply chains
Agile - Ability to react quickly to unexpected shifts in supply, demand and disruptions
Adaptable - Ability to change supply chain configurations in response to long-term changes in the markets, political shifts, demographic trends and technology
Aligned - way in which the interests of various players involved in the supply chain align
Efficient strategy
Production and distribution decisions based on long-term forecast
Responsive Strategy
Production and distribution are demand driven so that they are coordinated with true customer demand rather than forecast demand.
Supply chain strategies
Make to stock (MTS) - mainly a push strategy, consumer pulls from retailer
Configure to order (CTO) - Paint final configuration in store, Consumers pulls at distributer
Assemble to order (ATO) - get the order then assemble, dell computers,, usually have excess capacity, Consumers pulls from manufacturer
Make to order (MTO) - furniture, long lead times, consumers pulls from supplier
Engineer to order - Consumer pulls from engineering, product engineered just for them
Flexibility
Process flexibility - ability to produce a wide variety of products, larger customization
Product Flexibility - Ability to change to new product quickly and economically
Volume flexibility - Ability to adjust and adapt quickly to size of orders
Job shop
Low volume production of a great variety of non-standardized products (highly customized)
Each job is different
This process is highly flexible
Batch
Low volume, many products
disconnected line but a dominant flow exists
Assembly line
Higher volume
few major products
Connected line and flow
Continuous Flow
High volume High standardization commodity products Continuous process segments tightly linked
Cycle time
average time between completion of successive units. • operation cycle time (assumes no starvation, blockages or downtime).
• process (system) cycle time (black-box)
Lead time
the time it takes to get completely through a process, from beginning to end.
Capacity
how much output can be produced in a specified period of time with no losses to yield or downtime.
• operation capacity (unconstrained)
• process capacity (determined by bottleneck).
Throughput
how much output is actually produced in a specified period of time.
Utilization
the percentage of time spent actually working on the product or on
performing the service
Utilization = throughput/capacity
Bottleneck
factor that limits the capacity of the overall process
• slowest operation (longest cycle time) • scarcest resource (material or people)
Little’s law
Average WIP = Average Throughput rate * AVG lead time
Measuring variability
Coefficient of variation = Std deviation / mean
Throughput rate
=bottleneck utilization * bottle neck rate
process batch
quantity of product processed at a resource before the resource changes to produce a different product.
