Opmt 303 1st Edition Exam 2 Study Guide chapter 11 12 14 15 Lecture 5 February 25 Supply Chain Management Supply Chain Management is the strategic coordination of the supply chain for the purpose of integrating supply and demand management Its logistics are the movement of goods services cash and information in a supply chain A supply chain is a sequence of activities and organizations involved in producing and delivering a good or service A simple supply chain is suppliers to storage storage to producer producer to storage storage to distributor distributor to retailer retailer to final consumer In a supply chain management s responsibility is tactical That includes forecasting sourcing operations planning managing inventory transportation planning and collaborating Operational activities include scheduling receiving transforming order fulfilling managing inventory shipping information sharing and controlling Vendor managed inventory reduces bullwhip effect by shifting ownership management and replenishment to vendors The purchasing cycle is a series of steps that begin with a request for purchase and end with notification of shipment received in satisfactory condition Purchasing receives the requisition means the requisition includes a description of the item desired the quantity and quality necessary desired delivery dates and who is requesting the purchase Purchasing selects the supplier means the purchasing department must identify suppliers who have the capability of supplying the desired goods Purchasing places the order with a vendor means if the order involves a large expenditure the vendors will be asked to bid on the job and the operating and design personnel are asked to assist in negotiation with the vendor Monitoring orders refers to the routine follow up on orders allows the purchasing department to project potential delays and relay that information to the operating units Receiving orders refers to the task of checking incoming shipments for quality and quantity and it must notify purchasing accounting and the operating unit that requested the goods Ethics in Purchasing include perceived impropriety conflict of interest issue of influence responsibility to your employers supplier and customer relationships sustainability and social responsibility confidential and proprietary information reciprocity applicable laws and professional competence 1 Perceived Impropriety prevents the intent and appearance of unethical or compromising conduct in relationships actions and communication 2 Conflict of Interest ensures that any personal business or other activity does not conflict with the lawful interest of your employer 3 Issue of Influence avoids behavior or actions that may negatively influence or appear to influence supply management decisions 4 Responsibility to your employers refers to upholding fiduciary and other responsibilities using reasonable care and granted authority to deliver value to your employer 5 Supplier and customer relationships promote positive supplier and customer relationships 6 Sustainability and Social Responsibility is the champion social responsibility and sustainability practices in supply management 7 Confidential and Proprietary Information protects credential and proprietary information 8 Reciprocity is used to avoid improper reciprocal agreements 9 Applicable laws regulations and trade agreements know and obey the letter and spirits of laws regulations and trade agreements applicable to supply management 10 Professional Competence develops skills expands knowledge and conducts business that demonstrates competence and promotes the supply management profession Creating an Effective Supply Chain involves trust and effective communication Information velocity is the speed at which information is communicated in a supply chain Supply chain visibility is a major trading partner and it can connect to its supply chain to access data in real time Event management capability is detecting and responding to unexpected events Performance metrics involves late deliveries fill rates response time inventory turnovers and quality issues Enterprise resource planning ERP is a large integrated information system that supports many enterprise processes and data storage across functional areas business units geographic regions and product lines It supports all enterprise processes that are activated as a result of sale An aggregate production plans objectives is to develop a production plan for aggregate demand Its input is a strategic and business plans and aggregate demand forecast Its output is a master production schedule The vice president for manufacturing operations is responsible Proactive aggregate production plan refers to smooth demand pattern through higher prices coupons ads discounts Reactive refers to adjust capacity to meet the demand Strategies for the workforce include hiring firing part time hiring firing and vacation 1 Hiring includes paperwork interviews and training 2 Firing includes severance payment and an unemployment fund 3 Part time hire fire involves money having new employees leading to lower skills and usually lower benefits Production Rates include regular time overtime idle time and subcontracting Regular time includes salaries and wages fringe benefits FICA and workers compensation Overtime consist of at least 150 of wages and FICA Idle time refers to opportunity loss Subcontracting consists of additional overhead markup and quality costs Inventories hold to meet future demand in holding cost Stockouts and backorders include opportunity loss penalty for late deliveries and expediting costs There are two extreme pure plans Chase demand produces exactly what is needed and will hire fire to meet the variable demand Late capacity produces the same amount every period It uses OT IT SU and inventories to meet the variable demand Lecture 6 March 4 Tableau Method a Step 1 formulation i Rows and columns b Step 2 Production rate month i Regular time ii Over time iii Idle time iv Subcontracting c Step 3 APP interpretation i Best APP is the lowest cost There are strict regulations to overtime in the US The Bureau of Labor Statistics reports that more than a tenth of all work done in the nation s factories is performed on overtime One reason employers are going the overtime route is that overtime pay doesn t cost much extra Fringe benefits are mostly covered by the first 40 hours worked Overtime hours generally are worked by employers