Slide 1Slide 2Stages of the Product Life Cycle (PLC)Drivers of Time-Based CompetitionSlide 5Pipeline ManagementValue-AddedCauses of Non-Value Added TimeSlide 9Reducing NVATResponsiveness vs. ReliabilitySlide 12Slide 13Business Administration 331Supply Chain ManagementChapter 6Dr. John E. BellAssociate Professor of Supply Chain Management 343 Stokely Management [email protected] often do you get a new cell phone?How often did you get a new land line phone when you were growing up?2Discussion QuestionTimeDollars0 Profits SalesIntroductoryStageGrowthStageMaturityStageDeclineStageAGILE LEAN LEANStages of the Product Life Cycle (PLC)AGILETime Money Drivers of Time-Based Competition1. Shortening product (and service) life cycles2. Customers’ drive for reduced inventories 3. Volatile markets make forecasting dangerousExamples• Cars• Televisions• Cell phones• Style of Clothing• New Club/Restauranthttps://www.youtube.com/watch?v=bFUdWqVqIasBusiness Administration 331Supply Chain ManagementChapter 6Dr. John E. BellAssociate Professor of Supply Chain Management 343 Stokely Management [email protected] goal of Pipeline Management is to reduce the length of the pipeline and/or speed up the flow through the pipeline!Pipeline ManagementValue added time (VAT) = total cycle time product is actually worked on (usually expressed as a %)Provides Form, Place or Time UtilityOften as little as 5% of the total timeNon-value added time (NVAT) = total cycle time product may spend waiting, being moved, being inspected or being countedDoes not Provide Form, Place, or Time Utilityhttps://www.youtube.com/watch?v=nOLWp99bCsIValue-Added7NVAT is often the result of firms’ own self-inflicted rules such as:• Economic batch quantities• Economic order quantities• Minimum order sizes• Fixed inventory review periods• Production planning cycles• Forecasting review periodsCauses of Non-Value Added Time“Does this activity add value for the customer or does it simply add cost?” EVERYTHING must relate back to creating customer value.Question for every activity in a supply chain:If you work for a manufacturing firm, where would it make the most sense to focus efforts to reduce overall cycle time?9A. Manufacturing time B. Transit time from DC to customerC. Time that an order sits in a queue waiting to be acted uponD. Time an item sits in inventory waiting to be soldDiscussion QuestionReducing NVAT10Responsiveness vs. ReliabilitySpeed, defined as Responsiveness, is not the only thing that is important in supply chain management. The consistency of that speed is also important. This is called Reliability.Given the data below regarding the order cycle time from one of TWDS’s major suppliers, discuss the major areas that you would target to reduce lead time to 10 days.12TWDS DiscussionOrder Prep/Transmittal TWDS receiving Order shippedOrder picked/producedOrder ProcessingOrder Receipt/EntryActivity:1. TWDS order preparation and transmittal2. Supplier Order received and entered into system3. Order processing4. Warehouse picking and packing5. Transit time6. TWDS receiving and placing on shelvesAverage Time:4234daysdaysdaysdaysTotal order cycle time 18 days123 456 5 daysBusiness Administration 331Supply Chain ManagementChapter 6Dr. John E. BellAssociate Professor of Supply Chain Management 343 Stokely Management
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