Lecture 8: Supply Chain Systems Flashcards
What are the objectives for supply chain operations?
Quality
Speed: service time
Dependability: ability to deliver goods on time and in full
Cost
Resislience
What is the difference between functional products and innovative products?
Functional: predictable demand, few changes, low variety, low margin, long lead times
Innovative: unpredictable demand, many changes, high variety, high margin, short lead times
What is the difference between a LEAN and AGILE supply chain?
Lean supply chains: best in high volume, low variety and predictable environments
Agile supply chains: less predictable environments where the demand for variety is high - volume, mix, product
Lean ideas maximise profits through cost reduction while agility maximises profit through providing exactly what the customer requires.
What are the differences in focus, partnerships, key measure, profit margin, forecasting, purchasing policy and logistics planning in LEAN and AGILE supply chains?
LEAN
- Focus eliminate waste
- Partnerships: long term and stable
- Output measure such as productivity and cost
- Profit margin is low
- Forecasting is algorithmic
- Purchasing policy is to buy
- Logistics planning is stable
AGILE
- Focus is on customers/markets
- Partnerships are fluid
- Measure capabilities and focus on customer satisfaction
- High profit margin
- Forecasting is consultative
- Purchasing policy is to assign capacity
- Logistics planning is an instantaneous response
What are hybrid strategies?
Hybrid strategies enable the upstream part of the chain to be cost effective and the downstream part to achieve high service levels.
Examples:
- Pareto 80:20: lean for volume lines
- Surge/base demand separation: agile principles for surge
- De-coupling point: lean up to a point and agile beyond it
What are the secrets of Japanese success?
- Long-term collaborative relationship
- Dual sourcing: volumes adjusted to performance
- Continuous improvement
- Operations and logistics: JIT
What are the ways to create closer, more informed and effective relationships between customer and supplier
Approaches:
- Supplier Relationship Management
- Commodity, performance, development supplier or partner
- Vendor Managed Inventory: supplier manages inventory at customer site, takes financial responsibility
- Collaborative Planning Forecasting Replenishment
- Combines the intelligence of partners across the supply chain in planning and fulfilling demand
- Info sharing, coordinated production planning, joint forecasting, coordinated shipments, coordinated promotions
What are the pros and cons of collaboration?
Ads:
- Efficiency
- Reduced variability
- Reduced contract costs
- Mutual learning
- Greater stability
- Greater visibility for supplier
Dis:
- Cost of communication
- Risk of opportunism
- Reduced flexibility in supplier selection
- Information leaks
What are the different levels and communication methods in SC partners?
Information services at BUSINESS LEVEL
Electronic data interchange at ORDER LEVEL
Barcode/RFID item data at PHYSICAL PRODUCT LEVEL
Explain the different supply chain information systems.
SRM: supplier relationship mgmt.
These applications focus on relationship between supplier and manufacturer adn procurement process that takes place between them.
MRP: these systems produce schedules for what to make, where and when to make and how to make it taking into account availability, capacity and other objectives.
MES - Manufacturing execution systems
Inventory planning systems: observe demand patterns, take inputs on forecasting and produce recommended stocking policy
WMS - Warehouse Management systems: Execute inventory planning commands and run day to day operations of warehouse
Transportation Execution
Demand planning and revenue mgmt.
Customer relationship management
