Supply Chain Integration (12) Flashcards
supply chain integration
the effective coordination of supply chain processes through the seamless flow of information up and down the supply chain.
Supply Chain Dynamics
each firm in a supply chain depends on other firms and services for materials or info
bullwhip effect
increase in variability is referred to as the bullwhip effect
phenomenon in supply chains whereby ordering patterns experience increasing variance as you proceed upstream in the chain.
External Causes
least amount of control. include the following: volume changes service and product mix changes late deliveries under filled shipments
Internal Causes
a firm's own operations can be the culprit in what becomes the source of constant dynamics in the supply chain. include the following: internally generated shortages engineering changes order batching new service or product introductions service or product promotions information errors
Supplier Relationship Process
focuses on the interaction of the firm with upstream suppliers, includes five major nested processes.
- sourcing (which suppliers you chose) ex. quality, cost, proximity, service
- design collaboration (slight design change in product/ packaging can shift costs)
- need to get people involved early, best designs are from out of company
- negotiation
- buying
- info exchange
SCOR supply chain operations reference model
a framework that focuses on a basic supply chain of plan, source, make, deliver, and return processes, repeated again and again along the supply chain
plan - deliver- source-make-return
new service or product development process
1 design -critical as it links the creation to the corporate strategy
2 analysis -critical review of new offering and how it will be produced
3development-specificity to the new offering
4 full launch- the coordination of many internal processes as well as those both upstream and downstream. promotions, sales personnel briefed, distribution process etc.
Purchasing
the activity that decides which suppliers to use, negotiates contracts, and determines whether to buy locally
Sourcing
selection, certification, and evaluation of suppliers
annual materials cost: pD *p=price per unit
freight costs: mode of transportation, # of shipments, and full vs less than truckload
inventory costs: cycle inventory = Q/2
pipeline inventory = dL
*l= lead time d=average requirements per day
annual inv costs: (Q/2 +dL)H
administrative costs: managerial time, travel and other variables
total annual cost
total annual costs= pD +freight costs+(Q/2+dL) H + administrative costs.
Design Collaboration
jointly designing new services or products with key suppliers
early supplier involvement- program that includes suppliers in the design phase of a service or product.
presourcing- suppliers are selected early in a product;s concept development stage and are given significant
value analysis- systematic effort to reduce the cost or improve the performance of services or products, either purchased or produced.
Negotiation
obtaining an effective contract that meets the price, quality, and delivery requirements of the supplier relationship process’s internal customers.
competitive orientation- neg. between buyer and seller as a zero sum game. one loses, other gains.
cooperative orientation- buyer and seller are partners, each helping the other as much as possible.
Negotiation: sources
referent- supplier values identification with buyer
expert- buyer has access to knowledge, info, and skills desired by the supplier.
reward- buyer has the ability ot give rewards to the supplier
legal- buyer has the legal right to prescribe behavior for the supplier
Buying
relates to the actual procurement of the service or material from the supplier. includes creation, management, and approval of purchase orders and determine the locus of control for purchasing decisions. e-purchasing 1. electronic data interchange 2. catalog hubs 3. exchanges 4. auctions 5. locus of control
Information Exchange
facilitates the exchange of pertinent operating info, such as forecasts, schedules and inventory levels between the firm and its suppliers.
- radio frequency identification (RFID) identifying through use of radio signals from a tag attached to item
- vendor managed inventories system in which supplier has access to the customer’s inventory data and responsible for maintaining the inventory level required by the customer.
Order Fulfillment Process
produces and delivers the service or product to the firm's customers. four key nested processes: 1. customer demand planning 2. supply planning 3. production 4. logistics-
logistics includes
degree of ownership facility location mode selection capacity level amount of cross docking.
fastest
air-truck-train-boat
cheapest
boat-train-truck-air
Customer Relationship Process
supports (CRM) programs, identify, attract, and build relationships with customer sand to facilitate the transmission and tracking of orders.
marketing, order placement, customer service
Levers for Improved Supply Chain Performance
key levers and measurements for improving SCM sharing data-> route computer info to supplier collaborate activities reduce replenishment lead times reduce order lot sizes ration short supplies use every day low pricing be cooperative and trustworthy
