OM 7 SC Planning
-
Upload
donal-mcgovern -
Category
Documents
-
view
224 -
download
0
Transcript of OM 7 SC Planning
-
8/7/2019 OM 7 SC Planning
1/21
Chapter 13
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Source: Tibbett and Britten
-
8/7/2019 OM 7 SC Planning
2/21
-
8/7/2019 OM 7 SC Planning
3/21
What is supply chain management?
Supply chain management is the management of theinterconnection of organizationsthat relate to each
other throughupstream and downstreamlinkages
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
between the processes that producevalue to the
ultimate consumerin the form of products and
services.
-
8/7/2019 OM 7 SC Planning
4/21
Supply chain management is concerned with managing the flowof materials and information between a string of operations
that form the strands or chains of a supply network
Flow between processesFlow between processes
Flow between processes
Flow between processes
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Flow between processes
Supply chain managementconcerns flow between a
string of operations
Flow between processesFlow between processes
-
8/7/2019 OM 7 SC Planning
5/21
Supply chain management is concerned with the flow ofinformation as well as the flow of products and services
Upstream flowof customer
requirements
Long-term plans and requirementsMarket research informationIndividual ordersPayment
Potential new products and services
Flow betweenprocesses
Flow betweenprocesses
Flow betweenprocesses
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Products and services
New products and servicesDelivery informationPayment request / Credit
Downstream flow
of products and servicesfor customer
fulfilment
Consumer
-
8/7/2019 OM 7 SC Planning
6/21
-
8/7/2019 OM 7 SC Planning
7/21
From the operationsperspective 90%
satisfaction
Customerrequirements
Product/service
available?
Product/serviceappropriate?
100
80
20
Y
N
70
10
Y
N
50
N
10
40
Y
N
1
Y
N
CustomersatisfactionFrom the customers perspective 8% satisfaction
Taking a customer perspective of supply performancecan lead to very different conclusions
8
N
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Meets priceand delivery
requirements?
Customerorders?
Produced aspromised?
Received aspromised?
20Y
10
10
Y
N
9
8
1
Y
N
8
1
Y
9
1
Y
N
-
8/7/2019 OM 7 SC Planning
8/21
The operationPurchasing functionSuppliers
Request forproducts
and services
Demandfrom
customers
Requestfor
quotations
Preparequotation forspecification,price, delivery,
etc.
Requests
Liaison
The purchasing function brings together
the operation and its suppliers
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Supply tocustomers
Preparepurchase
order
Selectsupplier(s)
Quotations
Produceproducts
and services
Order Receiveproducts
and services
Deliver
e ween
purchasingand the
operation
-
8/7/2019 OM 7 SC Planning
9/21
Short-term ability to supply Longer-term ability to supply
Range of products or servicesprovided
Potential for innovation
Quality of products or services Ease of doing business
Responsiveness Willingness to share risk
Dependability of supply Long-term commitment to supply
Factors for rating alternative suppliers
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Delivery and volume flexibility Ability to transfer knowledge as wellas products and services
Total cost of being supplied Technical capability
Ability to supply in the requiredquantity
Operations capability
Financial capability
Managerial capability
-
8/7/2019 OM 7 SC Planning
10/21
Factor Weight Supplier A score Supplier B score
Cost performance 10 8 (8 x 10 = 80) 5 (5 x 10 = 50)
Quality record 10 7 (7 x 10 = 70) 9 (9 x 10 = 90)
Delivery speed promised 7 5 (5 x 7 = 35) 5 (5 x 7 = 35)
Weighted supplier selection criteria for the hotel chain
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Delivery speed achieved 7 4 (4 x 7 = 28) 8 (8 x 7 = 56)
Dependability record 8 6 (6 x 8 = 48) 8 (8 x 8 = 64)
Range provided 5 8 (8 x 5 = 40) 5 (5 x 5 = 25)
Innovation capability 4 6 (6 x 4 = 24) 9 (9 x 4 = 36)
Total weighted score 325 356
-
8/7/2019 OM 7 SC Planning
11/21
-
8/7/2019 OM 7 SC Planning
12/21
-
8/7/2019 OM 7 SC Planning
13/21
AttitudesTrust
Elements of process partnership relationships
Jointlearning
Long-termexpectations
Sharingsuccess
Multiplepoints ofcontact
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Actions
Joint problemsolving
Joint co-ordination of
activities
Fewrelationships
Informationtransparency
Dedicatedassets
Closeness ofrelationship
-
8/7/2019 OM 7 SC Planning
14/21
Supply chain time compression
Schedulechanges impact
market faster
so canrespond to
market changesbetter
so improvedforecasts
Forecastsmade closer todemand time
Defects aredetected faster
so easier toimprove quality
New productsand service
faster to market
so fewer lostsales from
delayed launch
so reducedrisk of
obsolescence
The effects of supply chain compression
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Improved profitability
so revenuesare maximized
so reducedstockholding
costs
so less need forsafety stocks
so reducedwastage costs so revenuesare maximized
so less
discountedsales
-
8/7/2019 OM 7 SC Planning
15/21
2
1
Third-levelsupplier
Second-levelsupplier
First-levelsupplier
Originalequipmentmanufacturer
Prodn. Stock Prodn. Stock Prodn. Stock Prodn. Stock
100 100 100 100 100100100100
100100
100100
100
2010060 60
10080 80
10090
1009590
10095
60 80 90 95
The bullwhip effect
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
MARKET
6
5
4
3 2 1 OEM
ALL OPERATIONS HOLD ONE PERIODS STOCK
120 100 95 9560
12090 90
10095 95
9595
1009095
95959595
95959595
9595 9595
959595
95 9595
959595
95 9595959595
-
8/7/2019 OM 7 SC Planning
16/21
2
1
Third-levelsupplier
Second-levelsupplier
First-levelsupplier
Originalequipment
manufacturer
Prodn. Stock Prodn. Stock Prodn. Stock Prodn. Stock
100 100 100 100 100100
100100
100100
100100
100
100
95
The bullwhip effect
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
6
5
43 105
105
95
95
3 2 1 OEM MARKET
ALL OPERATIONS HOLD ONE PERIODS STOCK
-
8/7/2019 OM 7 SC Planning
17/21
0Time
Sales fromstore
0Time
Stores ordersto wholesaler
Time
Wholesalersorders to
manufacturer
0
Manufacturersorders to its
suppliers
0Time Time
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
ConsumersRetailStore
Whole-saler
Manu-facturer
Supplier
-
8/7/2019 OM 7 SC Planning
18/21
Supply chain dynamics
Supply chains with different end objectives
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
-
8/7/2019 OM 7 SC Planning
19/21
Matching the supply chain with market requirements
Nature of demandFunctional products Innovative products
PredictableFew changes
Low varietyPrice stable
Long lead-timesLow margin
UnpredictableMany changesHigh varietyPrice markdowns
Short lead-timesHigh margin
es
icient
uttimes
n
entory
liers
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Lean supplychain
management
Mismatch
Mismatch Agile supplychain
managementSupply
chainobjec
ti
Responsive
E
ff
Lowco
st
Highutilization
Minimuminvento
ry
Low-costsupplie
rs
Lowthrough
Highutiliza
ti
Deployedinv
Flexiblesu
pp
-
8/7/2019 OM 7 SC Planning
20/21
Supplier Manufacturer
Depot
Depot
Customer-responsive supply
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
ProductsInformation
Supplier Manufacturer
Depot
Outlets
Depot
Efficient fast-throughput supply
Outlets
-
8/7/2019 OM 7 SC Planning
21/21
Matching supply chain characteristics to the nature of demand
Nature of demandFunctional products Innovative products
Predictable UnpredictableFew changes Many changes
Low variety High varietyPrice stable Price markdowns
Long lead-time Short lead-timeLow margin High margin
s
t
Slack, Chambers and Johnston, Operations Management 5th Edition Nigel Slack, Stuart Chambers, and Robert Johnston 2007
Supply
chainobjectiv
Responsive
Efficien a c sma c
Mismatch Match