1 Introduction to Operations Management Supply Chain Management (Ch.11) Hansoo Kim ( 金翰秀 )...
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Transcript of 1 Introduction to Operations Management Supply Chain Management (Ch.11) Hansoo Kim ( 金翰秀 )...
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Introduction to Operations Management
Supply Chain Management Supply Chain Management (Ch.11)(Ch.11)
Hansoo Kim ( 金翰秀 )Dept. of Management Information
Systems, YUST
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OM Overview
Class Overview(Ch. 0)
Project Management
(Ch. 17)
Strategic Capacity Planning(Ch. 5, 5S)
Operations, Productivity, and Strategy
(Ch. 1, 2)
Mgmt of Quality/Six Sigma Quality
(Ch. 9, 10)
Supply Chain Management
(Ch 11)
Location Planning and Analysis
(Ch. 8)
Demand MgmtForecasting
(Ch 3)
Inventory Management
(Ch. 12)
Aggregated Planning
(Ch. 13)
Queueing/ Simulation
(Ch. 18)
MRP & ERP (Ch 14)
JIT & Lean Mfg System
(Ch. 15)
Term Project
Process Selection/
Facility Layout; LP(Ch. 6, 6S)X X X X X
XX
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Today’s Outline Explain what a supply chain is. Explain the need to manage a supply chain and
the potential benefits of doing so. Explain the increasing importance of outsourcing. State the objective of supply chain management. List the elements of supply chain management. Identify the strategic, tactical, and operations
issues in supply chain management. Describe the bullwhip effect and the reasons why
it occurs.
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Today’s Outline Explain the value of strategic partnering. Discuss the critical importance of
information exchange across a supply chain. Outline the key steps, and potential
challenges, in creating an effective supply chain.
Explain the importance of the purchasing function in business organizations.
Describe the responsibilities of purchasing. Explain the term value analysis. Identify several guidelines for ethical
behavior in purchasing.
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Supply Chain Management
Supply Chain: the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service.
Supply chain management: is the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management.
Sometimes referred to as Sometimes referred to as value chainsvalue chains
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Warehouses Factories Processing centers Distribution
centers Retail outlets Offices
Facilities
Forecasting Purchasing Inventory
management Information
management Quality assurance Scheduling Production and
delivery Customer service
Functions /Activities
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Typical Supply Chain
In the past, most organizations did little to manage their supply chains, In the past, most organizations did little to manage their supply chains, but….but….
1.The need to improve operations 2.Increasing levels of outsourcing3.Increasing transportation costs4.Competitive pressures5.Increasing globalization6.Increasing importance of e-commerce7.Complexity of supply chains8.Manage inventories
Need for Supply Chain Management
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Bullwhip Effect
The bullwhip effect: demand variations begin at the customer end of the chain and become increasingly large as they radiate backwards through the chain
Inventory oscillations become progressivelylarger looking backward through the supply chain
Why?Why?
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Global Supply Chain and Outsourcing Global Supply Chain
Producing in China -> Selling in USA Supply Chains linked in global pattern
Made in USA? => Assembled in USA with China Components! => or Designed in USA but made in China!!!
Increasing more complex Language, Culture, Currency fluctuations, Political,
Transportation costs, Local capabilities, Finance and economics, Environmental
Outsourcing Producing? ->Buying More Concentrate on what we can do better!
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Benefits of Effective Supply Chain Management
Organization Benefit
Campbell Soup Doubled inventory turnover rate
Hewlett-Packard Cut supply costs 75%
Sport Obermeyer Doubled profits and increased sales 60%
National Bicycle Increased market share from 5% to 29%
Wal-Mart Largest and most profitable retailer in the world
Benefits of effective supply chain management include lower inventories, lower costs, higher productivity, greater agility, shorter lead times, higher profits, and greater customer loyalty.
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Elements of Supply Chain Management
Table 11.1
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Strategic or Operational
Two types of decisions in supply chain management Strategic – design and policy Operational – day-today activities
Major decisions areas Location Production Inventory Distribution
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Logistics
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
관련내용 Movement within the facility Incoming and outgoing shipments Bar coding EDI Distribution JIT Deliveries
0
214800 232087768
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Distribution requirements planning (DRP) is a system for inventory management and distribution planning
Extends the concepts of MRPII
Management uses DRP to plan and coordinate: Transportation Warehousing Workers Equipment Financial flows
Distribution Requirements Planning (DRP)
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Ryder delivers (in trucks labeled “Saturn”) bins of speedometers and odometers to Saturn’s Spring Hill, Tennessee, plant. Thursday, 9:00 a.m.: A Ryder truck arrives at a Saturn supplier in Winchester, Virginia.
Drivers check the onboard computer, which provides destination and routing information, along with e stimated travel times.
Spring Hill, Tennessee, Friday, 3:00 a.m.: After parking the trailer in a computer-assigned spot in Ryder’s switching yard two miles from the Saturn plant, the driver downloads a key-shaped floppy disk from the onboard computer into Ryder’s mainframe. The mainframe generates performance reports for Saturn.
12:50 p.m.: The trailer approaches the Saturn plant.
12:53 p.m.: The trailer arrives at one of Saturn’s 56 receiving docks just in time for Saturn workers to unload the bins and unwrap the pre-inspected instruments to ready them for the production line.
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E-Business: the use of electronic technology to facilitate business transactions
Applications include Internet buying and selling E-mail Order and shipment tracking Electronic data interchange
E-Business
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Companies can: Have a global presence Improve competitiveness and quality Analyze customer interests Collect detailed information Shorten supply chain response times Realize substantial cost savings Create virtual companies Level the playing field for small companies
Advantages E-Business
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Customer expectations Order quickly -> fast delivery
Order fulfillment Order rate often exceeds ability to fulfill it
Inventory holding Outsourcing loss of control
Internal holding costs
Disadvantages of E-Business
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RFID
Source: As seen in Business 2.0 Copyright © 2002, Xplane Corp. Used with permission.
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CPFR CPFR
Collaborative Planning, Forecasting, and Replenishment
Focuses on information sharing among trading partners
Forecasts can be frozen and then converted into a shipping plan
Eliminates typical order processing
CPFR Process
Step 1 – Front-end agreement
Step 2 – Joint business plan
Steps 3-5 – Sales forecast
Steps 6-8 – Order forecast collaboration
Step 9 – Order generation/delivery execution
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CPFR Results
Nabisco and Wegmans 50% increase in category sales
Wal-mart and Sara Lee 14% reduction in store-level inventory
32% increase in sales
Kimberly-Clark and Kmart Increased category sales that exceeded market
growth
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Purchasing is responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service.
Purchasing cycle: Series of steps that begin with a request for purchase and end with notification of shipment received in satisfactory condition.
Goal of Purchasing is to develop and implement purchasing plans for products and services that support operations strategies
Duty of Purchasing Identifying sources of supply, Negotiating contracts, Maintaining a
database of suppliers, Obtaining goods and services, Managing supplies
Purchasing ( 구매 )
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Purchasing Interfaces
Figure 11.5
Purchasing Cycle• Requisition received• Supplier selected• Order is placed• Monitor orders• Receive orders
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Centralized purchasing Purchasing is handled by one
special department
Decentralized purchasing Individual departments or separate
locations handle their own purchasing requirements
Centralized vs Decentralized Purchasing
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Guidelines for ethical behavior in purchasing Principles
Loyalty to employer. Justice to those you deal with Faith in your profession
Standards of purchasing practice Avoid appearance of unethical or compromising
practice. Follow the lawful instructions of your employer. Refrain from private activity that might conflict
with the interests of your employer. Refrain from soliciting or accepting gifts, favors, or
services from present or potential suppliers. Handle confidential or proprietary employer or
supplier information with due care.
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Guidelines for ethical behavior in purchasing Standards of purchasing practice
Practice courtesy and impartiality in all aspects of your job.
Refrain from reciprocal agreements that constrain competition.
Know and obey the letter and spirit of laws governing purchasing.
Demonstrate support for small, disadvantaged, and minority owned businesses.
Discourage involvement in employer sponsored programs of nonbusiness, personal purchases.
Enhance the profession by maintaining current knowledge and the highest ethical standards.
Conduct international purchasing in accordance with the laws, customs, and practices of foreign countries, but consistent with the laws of the United States, your organization’s policies, and these guidelines.
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Choosing suppliers
Evaluating sources of supply
Supplier audits
Supplier certification
Supplier relationships
Supplier partnerships
Supplier Management
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Factors in Choosing a Supplier
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Vendor analysis - evaluating the sources of supply in terms of Price Quality Services Location Inventory policy Flexibility
Evaluating Sources of Supply
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Supplier as adversary versus supplier as partner
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Ideas from suppliers could lead to improved competitiveness
1.Reduce cost of making the purchase2.Reduce transportation costs3.Reduce production costs4.Improve product quality5.Improve product design6.Reduce time to market7.Improve customer satisfaction8.Reduce inventory costs9.Introduce new products or services
Supplier Partnerships
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Announcement
HW: No Homework!!! – Are you happy? ㅋㅋㅋ
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Good Bye!