EXAM2 Flashcards
Steps in the supplier management process
- Identify Need – Material, Service, Relationship 2. Select Supplier – ID requirements, Search, Evaluate, Negotiate 3. Develop Supplier – Issue Resolution, Continuous Improvement 4. Provide Feedback – Goals, Report Cards
Transactional Relationships
• The buyer has many suppler choices, does not need to share internal company info, purchasing a routine item, does not require technology innovation, does not expect to experience shortages in supply • Arm’s-length relationships
Collaborative Relationships
• Limited supplier options, procuring a critical item, needs technology innovation, concerned about the availability of supply, working together and integrating processes between the buyer and supplier, sharing information, knowledge, and expertise.
Weighted Factor Analysis
The things you care about times a weight
Searching for potential suppliers
• Current Suppliers • The Internet • Trade Registers • Trade Journals • Company Personnel • Trade Shows • Professional Organizations
Request for quote (RFQ) / Request for Proposal (RFP)
Contains the specification of what is needed and details the information that must be submitted by a supplier who wishes to be considered for the purchase.
Supplier Evaluation tools
Percent Delivered Late - late/total Percent Improvement - (Old - New) / Old
Negotiations process
• Preparation – 90% of your time • Face-to-face negotiation • Debriefing
Using a scorecard
• Identifies the supplier performance metrics that are most critical to the supply manager organization • Enables the evaluation of suppliers against these key metrics • For the supplier: enables a link between the supplier’s own internal performance measures and the strategic objectives of the supply manager, enables the supplier to identify opportunities for improvement, and documents the criteria used to define what levels of performance are considered unacceptable.
Logistics trade-offs
Cost-to-Cost Trade-Offs • Slow down transportation so as to save fuel costs Modal Trade-Offs • Understand the relationships between and within the various modes of transportation Cost-to-Service Trade-Offs • Improving service or service levels will cost additional money for the company
Transportation modes
• Maritime Shipping – cheapest per tonnage of nonpiepline carriers, used for global shipments • Rail – Carries the most weight in terms of tons within the US, cheap, limited where it can go • Trucks and Cargo – Used to ship door to door • Air – Most expensive way to ship, used for overnight and lightweight shipments • Pipelines – Used for fluids, haul the most tonnage and are the most cost effective
Square root law
• Used to determine safety stock • X2 = total safety stock inventory in future facilities • X1 = total safety stock inventory of present facilities • N2 = number of future facilities • N1 = number of existing facilities
Weighted center of gravity method
• Used to determine the placement of a new facility • All the Xs times X weight divided by total weight, same for Ys
Consolidation Warehousing
• Takes small shipments and combines them into larger shipments
Cross docking
• Multiple shipments come in are mixed then go back out • Not a warehouse
Break bulk facilities
• Takes in large shipments then break out small shipments when needed
Hub and spoke systems
• Reduces the number of trucks or other carriers needed using a network of cities
Demand Processing
Independent demand – the demand that the customers actually create
Dependent demand – the demand created for production that is necessary to produce an end item
Derived demand – the demand is created as managers conceptualize forecasts and guess at future demand; only exists on paper
Inventory Management
When to order inventory
How much inventory to order
How much extra inventory they will hold
Transportation
Second largest cost behind COGS
Warehousing
Facility for storing inventory
Square root rule for safety stock
Structural Networks
The extent of vertical integration – outsourced versus being owned by the firm
Flexibility – ability to respond to changes in customer needs or requirements
Cooperation – strength of integrated information and business models between logistics providers and customers
Geographical dispersion – constrains the choice of logistics modes available, timing, and costs
Dimensions of quality
Performance – efficiency with which a product achieves its intended purpose
Features – Product attributes that supplement the product’s basic functionality
Reliability – Propensity for a product to function over its useful life
Conformance – The extent to which products meet specifications
Durability – The degree to which a product tolerates stress or trauma without failing
Serviceability – Ease of repair for products
Aesthetics – Subjective sensory attributes of a product such as taste, feel, sound, look, and smell
Perceived Quality – Quality assessment based on customer opinion
W. Edwards Deming
Statistical Thinking
System for quality improvement (processes, tools, equipment, or people)
Taught Japanese about quality
Plan – Process Development
Do – Process Implementation
Check - Quality Assurance
Act – Process Enhancement
Joseph Juran
Planning, Control, Improvement (Trilogy)
Strategic Approach
Big Q strategic issues
Little q tactical issues
Philip Crosby
Quality is free
DRIFT (Do it right the first time)
14 Steps for quality improvement
Kaoru Ishikawa
7 basic tools of quality
Democratized statistics (anyone can use them)
Company-wide quality control
Malcolm Baldrige National Quality Award Criteria for Performance Excellence
US government
Increasing national competitiveness
Small and large companies
7 categories (ADD THEM FIG 13.11)
Goes to the best
ISO 9000
International Organization for Standardization in Geneva
Shows a firm’s quality has been audited by an outside firm
Set of standards
Seven basic quality tools
Process Maps – Symbols to help define steps, decisions, and flows. Diamonds decisions, Rectangles processes
Check Sheets – Used to form histograms and perform Pareto analysis. Tally defects/problems
Histograms – Graphical representations of data in bar charts, width of bars must be consistent and classes must be mutually exclusive and all-inclusive
Scatter Plots – Used to study the relationships between variables
Run Charts – Used to plot time series data and identify data trends
Fishbone Diagrams – cause-and-effect/Ishikawa diagram, good brainstorming tool for identifying underlying causes to problems
Pareto Charts – Identify and prioritize problems that need solved, 80/20 rule 80 percent of quality problems are caused by a small number of causes
Types of benchmarking
Process – Comparing processes such as how another company performs receiving or purchasing
Financial – Comparing business results and accounting information
Performance, Comparing costs structures, speed, quality levels, etc.
Product – Comparing product attributes and functionality
Strategic – Comparing firm competitiveness along several dimensions
Functional – Comparing or learning how another firm performs a particular function such as call centers
