Flashcards in BSCM - 1 - Introduction to Supply Chain Management Deck (48):
Helps customers achieve better business results through:
-Design Assistance (new or existing)
-Customer Needs (assessing customer's business and creating/expanding product offerings.
-Information & Communication - collecting and analyzing customer data to support marketing, sales, and customer service
CRM - CUSTOMER RELATIONSHIP MANAGEMENT
Goods are made to forecast and sold from inventory.
-Demand is constant and predictable.
-Only a few product options exist.
-Order fulfililment lead time requirements are shorter than manufacturing lead times.
INFO NEEDED FOR PRODUCTION PLAN
-Forecast by time period for planning horizon.
-Desired ending inventory.
MARKETING MIX (4 Ps)
-PRODUCT - design, quality, etc.
-PROMOTION - advertising, campaigns, public relations
-PLACE - sales channels, distribution channels, inventory policies
What is the impact of New Systems & Philosophies in Manufacturing? (TQM, Six Sigma, Lean, TOC)
-REDUCED lead times.
-REDUCED inventory levels.
-IMPROVED worker productivity.
-IMPROVED product quality.
-Identifying and eliminating non-value-added activities and resources (WASTE)
-Creating continuous flow in Manufacturing as a result of pull by the customer
Management approach to long-term success through customer satisfaction.
-Identifying Costs of Quality
-Taking Action to solve problems
TQM - TOTAL QUALITY MANAGEMENT
Approach that focuses on reducing defects by decreasing process and product variation.
-Variation causes defects.
-Goal is to have no more than 3.4 defects per million opportunities, which constitutes a six sigma-level performance.
-Continuous improvement and problem solving to reduce variation and defects.
Holistic management philosophy based on the principle that systems have constraints limiting their ability to meet goals.
Objective is to achieve throughput goals by identifying and managing a few leverage points.
TOC - THEORY OF CONSTRAINTS
5 OBJECTIVES OF MANUFACTURING
-The right products
-Of the right quality
-In the right quantities
-At the right time
-At minimum cost, or at the right price
What are the 4 elements of a manufacturing business model?
1. Defining products and customers.
2. Defining products and processes.
3. Managing material flow.
4. Providing customer service & support.
What are the aims of PRODUCT & PROCESS DESIGN?
-Meet customer needs/provide value
-Be cost effective.
-Be built/provided efficiently.
-Accommodate planning parameters.
Name the different types of manufacturing environments.
What are the determinants of manufacturing environments?
-Lead time expectations.
-Product design input from customers.
-Product volume and variety.
-Product life cycle.
The Global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.
The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.
SUPPLY CHAIN MANAGEMENT
Describe 3 types of KPIs and their uses.
KPI = KEY PERFORMANCE INDICATORS
-STRATEGIC - relate to long-term goals
-TACTICAL - intermediate-term goals
-production plans & budgets
-OPERATIONAL - daily work routines.
Organizational tool for assessing performance against KPIs.
Includes metrics and performance from:
- Customer perspective
- Business Process Perspective
- Financial Perspective
- Innovation & Learning Perspective
-Voluntary strategic policy initiative for businesses
-Alignment of business operations with principles in four areas:
-Adoption of the UN Global Compact Management Model
UNITED NATIONS GLOBAL COMPACT
-COMMIT - Public leadership commitment to mainstream Global Compact Principles
-ASSESS - Assess risks & opportunities and the impact on operations; refine
-DEFINE - develop and refine goals and metrics and create a roadmap
-IMPLEMENT - implements strategies, policies; engage/educate employees; build capacity & resources
-MEASURE - capture, analyze, and monitor metrics; monitor performance vs. goals; adjust to improve
-COMMUNICATE - communicates progress and strategies; engages with stakeholders to identify ways to continuously improve.
UN GLOBAL COMPACT MANAGEMENT MODEL
What are the Labor Practice Princples set forth by the United Nations Global Compact?
-UPHOLD freedom of association and right to collective bargaining.
-ELIMINATE forced and compulsory labor.
-ABOLISH child labor.
-ELIMINATE discrimination in employment and occupation.
What are the Human Rights Principles set forth by the United Nations Global Compact?
-SUPPORT AND PROTECT internationally proclaimed human rights.
-ENSURE non-complicity in human rights abuses.
What is the Anti-Corruption Goal of the United Nations Global Compact?
Work against corruption in all of its forms, including extortion and bribery.
What are the Environmental Principles set forth by the United Nations Global Compact?
-SUPPORT a cautionary approach to environmental challenges.
-PROMOTE greater environmental responsibility.
-ENCOURAGE the development and diffusion of environmentally friendly technologies.
What are the 4 major external environmental factors encountered while operating a business?
-Economic, government, and regulatory influences
What are the phases of the product life cycle?
-Used for large, complex projects
-Project remains in one location for assembly
-Avoids the costs of moving the product.
-Often used for ships, buildings, and some aircrafts
LOWER Capital cost
HIGHER Annual Set Up Cost
HIGHER WIP Inventory
HIGHER Production & Inventory control costs
LONGER Lead Times
PROCESS MANUFACTURING LAYOUT
HIGHER Capital Cost
LOWER Annual Setup Cost
LOWER Run Cost
LOWER WIP Inventory
LOWER Production & Inventory Control Costs
SHORTER Lead Times
PRODUCT MANUFACTURING LAYOUT
MANUFACTURING PLANNING & CONTROL PROCESS
Name 5 questions of a good Planning & Control System.
1. What are we going to make?
2. What does it take to make it?
3. What do we already have?
4. What must we get and when?
5. What is the penalty/cost of NOT making it?
What are the basic elements of the EXTERNAL Supply Chain?
-Producers or Manufacturers
-Flow of info, cash, and goods & services.
-Balances the conflicting objectives of marketing, production, and finance by managing the flow of materials.
-Involved in TWO Major Areas
1. MPC - coordination and facilitation of MPC.
2. Physical supply & distribution.
-Job titles include:
-Supply Chain Manager
Describe the different aspects of MANAGING MATERIAL FLOW.
-Scheduling - as JIT as possible to reduce unnecessary inventory/lost sales.
-Production - Efficiency to reduce waste of time and materials.
-Distribution - flow to and from customers
-Green Reverse Logistics - batteries, glass bottles
CUSTOMER EXPECTATIONS / Characteristics that provide value to the customer:
-Speed (order lead time)
Name the three manufacturing process options.
-INTERMITTANT (lot or batch)
-REPETITIVE or LINE
-PROJECT (fixed position)
Name the characteristics of an INTERMITTANT MANUFACTURING PROCESS LAYOUT.
-also called PROCESS, JOB SHOP, or FUNCTIONAL Layout.
-Jobs pass through functional departments in lots or batches.
-Workstations are not dedicated to one type of product.
-Volume is not high enough to justify an assembly line.
-High WIP inventory; longer lead times.
Name the characteristics of a REPETITIVE FLOW MANUFACTURING PROCESS.
-Dedicated line with workstations in sequence.
-Short Manufacturing lead time.
-low WIP inventory
-low unit costs
-HIGHER capital investment
-limited range of similar products
-produces discrete units (ex. cell phones, trucks)
Describe the characteristics of a CONTINUOUS FLOW MANUFACTURING PROCESS.
-dedicated machinery & fixed routing.
-Non-discrete products, such as liquids
-low WIP inventory
-Higher capital investment
**Often raw materials into products, such as gas or steel by the use of mixing, chemicals, heating, cooling or pressure
Describe the role of Manufacturing.
The primary goal of manufacturing is to take raw materials and create value for producers and customers. By doing this, wealth is created for society as a whole.
-Voluntary strategic policy initiative for businesses interested in social justice and sustainable development.
-More than 8000 memebers
-Alignment of business operations with principles in four key areas:
-Adoption of UN Global Compact Management Model
-The management model provides detailed guidelines for incorporating the ten principles in business strategies and operations.
The UN Global Compact
What are the components of the manufacturing business model.
-product positioning (quality vs. price)
-breadth of product line
-price, quality, and design
-brand name vs. generic
-types of customers; for example, industrial, consumer, institutional, and government
-sales and distribution channels
-market share and profitability
THESE DECISIONS WILL HAVE A MAJOR INFLUENCE ON PRODUCTION DEFINITIONS, SUCH AS:
-choice of manufacturing environments
-choice of manufacturing process
-Understanding and meeting customer wants and needs
-Working with customers to solve problems.
PROVIDING CUSTOMER SERVICE AND SUPPORT
Describe the impact of four significant aspects of the global business environment on manufacturing.
-GLOBAL COMPETITION - business now have to compete with companies from all over the world. Many companies now have global markets. How does these companies differentiate their products and services from the competition.
-ECONOMIC, GOVERNMENT, AND REGULATORY INFLUENCES - the world economy affects the global supply chain - from availability of resources to consumer sales. Also, government and regulatory agencies can enact rules and regulations that influence the global supply chain in many ways.
-CUSTOMER EXPECTATIONS - customers buy a solution to a need or problem. Demand is usually market driven and the supplier must determine characteristics that provide value to the customer and fulfill the customer's needs.
-CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY - growing international consensus for businesses and their supply chains to exercise corporate responsibility in areas like HUMAN RIGHTS, LABOR PRACTICES, ENVIRONMENT, and ANTI-CORRUPTION to promote responsible economic growth to equally benefit all segments of society.
-Each area has compartmentalized operations in response to conflicting or uncoordinated critical success factors & performance measures
-lowest purchase -High utilization -FTL
price percent -best shipping rates
-Inventory -long runs (fewer -safety stocks
-low unit costs
TRADITIONAL INTERNAL SUPPLY CHAIN STRUCTURE
-Supply Chain is a subset of the VALUE CHAIN.
-Support processes are important but not considered primary value chain processes.
-Based on the efficiency of manufacturing operations, but not at the expense of other corporate goals (ex. cost reduction, revenue growth, market growth, shorter lead times, better quality, customer satisfaction and value.
-Can better balance the interests of manufacturing and other functions such as marketing and finance.
CROSS-FUNCTIONAL SUPPLY CHAIN
-Important concept...consists of processes that directly add value to the products and services that a company sells. Can consist of procurement, production, and distribution...as well as customer order management and reverse logistics aspects of customer service.
-also includes processes other than those directly involved in handling and transforming materials (ex. marketing, sales, product development).
-there are also support services that are also very important (ex. HR, finance)
Give examples of common supply chain conflicts.
-INHERENT CONFLICTS OF INTEREST AMONG VARIOUS FUNCTIONS
-production efficiency in manufacturing and finance
-high levels of customer service in marketing and finance
-low inventory investment within finance
-MARKETING GOAL TO INCREASE REVENUE will require:
-high customer service
-low production efficiency, or interrupting production schedules, short runs, etc.
-high inventories in order for products to always be in stock
-PRODUCTION GOAL TO REDUCE MANUFACTURING COSTS will require:
-high production efficiency (long runs, few products, fewer setups, less flexibility, lower customer service)
-high inventory of raw materials and finished goods to eliminate production interruptions.
-FINANCE SETS A GOAL TO INCREASE PROFIT, INCREASE CASH FLOW, AND REDUCE INVESTMENT...will require:
-high customer service to maximize profit
-high production efficiency to minimize costs
-low inventory to minimize investment.