Supply Chain Management Harcourt, Inc. S.C. 16-2Supply Chain Management.
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Transcript of Supply Chain Management Harcourt, Inc. S.C. 16-2Supply Chain Management.
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Supply Chain Management
Harcourt, Inc.
S.C
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16-2 Supply Chain Management
Supply Chain Management
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16-3 Supply Chain Management
Typical Supply ChainsTypical Supply Chains
Purchasing Receiving Storage Operations Storage
Production Distribution
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16-4 Supply Chain Management
Elements of Supply Chain ManagementElements of Supply Chain Management
Deciding how to best move and store materialsLogistics
Predicting quantity and timing of demandForecasting
Typical IssuesElement
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16-5 Supply Chain Management
Logistics Refers to the movement of materials and
information within a facility and to incoming and outgoing shipments of goods and materials in a supply chain
LogisticsLogistics
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Logistics concept
DefinitionDefinitionDefinitionDefinitionThe task of coordinating material flow and information flow across the supply chain.
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Minimize cost
Minimize investment
Maximize customer service
The objectives of logistics strategy
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16-9 Supply Chain Management
Materials MovementMaterials MovementR
EC
EIV
ING
Storage
Workcenter
Work centerWork center
Storage
Workcenter
Storage
Shipping
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Increasing Significance of Logistics
Costs are high About 10.5% of GDP domestically About 12% of GDP internationally
Customers are more demanding of the supply chain Desire for quick response Desire for mass customization
Logistical lines are lengthening Local vs. long distance supply Globalization of trade
Logistics is a key to trade and an increased standard of living
Logistics adds value Time and place utilities
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Seven-eleven convenience store– Describe the key logistics processes at 7-11.
– What differences between the early reform and the regional distribution center at 7-11.
– What do you think are the main logistics challenges in running the 7-11 operation.
Case study
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Case study
Centralized distribution
No distribution center
Built its own distribution center---joint distribution
First stage Second stage Third stage
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Creating logistics advantage: three basic ways
Logistics advantageLogistics advantage
quality time
cost
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Customer service goals The product Logistics service
Inventory Strategy Forecasting Storage fundamentals Inventory decisions Purchasing and supply
scheduling decisions Storage decisions
Transport Strategy Transport fundamentals Transport decisions
Location Strategy Location decisions The network planning process
The Logistics Strategy Triangle (4 problem areas)
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16
Outsourcing Logistics Services
The systematic outsourcing of logistics capabilities is a third option.
By collaborating with transportation firms, private warehouses, or other specialists, corporate resources can be concentrated on the firm’s core product.
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PRODUCTION/OPERATIONSSample activities: Quality control Detailed production scheduling Equipment maint. Capacity planning Work measurement & standards
LOGISTICSSampleactivities:Transport Inventory Order processing
Materials
handling
Interfaceactivities: Product scheduling Plant location Purchasing
MARKETINGSampleactivities: Promotion Market research Product mix Sales force management
Interfaceactivities: Customer service standards Pricing Packaging Retail location
Production-logisticsinterface
Marketing-logisticsinterface
Internal Supply Chain
Relationship of Logistics to Marketing and Production
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Product
PricePromotion
Place-Customer service levels
Inventory carrying costs
Lot quantity costs Order processing
and information costs
Transport costs
Warehousing costs
Ma
rke
tin
gL
og
isti
csRelationship of Logistics to Marketing
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Relationship of Logistics to Production
Coordinates through scheduling and strategy make-to-order make-to-stock
An integral part of the supply chain Affects total response time for customers Shares activities such as inventory planning
Costs are in tradeoff Production lot quantities affect inventory levels and
transportation efficiency Production response affects transportation costs and
customer service Production and warehouse location are interrelated