OM Chapter Notes Ch 15 Supply Chain Management pp 477 478 484 491 492 494 stop before Challenges 495 top two paragraphs about transportation cost trade offs E business the use of electronic technology to facilitate business transactions o Involves the interaction of different businesses as well interaction with customers o Two essential features the website and order fulfillment o Many problems that occur with Internet selling are supply related Ability to order quickly creates an expectation of an entirely speedy process However it also causes fluctuating demand To combat some companies created large warehouses to maintain control over inventory Order fulfillment the processes involved in responding to customer orders o Engineer to Order Products are designed and built according to customer specifications Fulfillment time can be relatively lengthy because of nature of project as well as presence of other jobs ahead of new one o Make to Order a standard product design is used but production of the final product is linked to the final customer s specifications Fulfillment time is generally less than ETO but still fairly long o Assemble to Order products are assembled to customer specifications from a stock of o Make to Stock production is based on forecast and products are sold to customer from Logistics the movement of materials services cash and information in a supply chain standard and modular components Fulfillment times are fairly short finished goods stock Order fulfillment time is immediate o Movement within factory o Incoming and outgoing shipments o Tracking goods Traffic management overseeing the shipment of incoming and outgoing goods RFID Radio frequency identification is tech that uses radio waves to ID objects such as goods in supply chains Provides more precise information than a barcode Eliminates need for manual counting and bar code scanning of goods o Evaluating Shipping Alternatives Considerations include shipping costs coordination of shipments with other supply chain activities flexibility speed and environmental issues Trains trucks planes and boats o Third party logistics 3 PL The outsourcing of logistics management Takes advantage of specialist knowledge well developed IS system and ability to obtain more favorable shipping rates Enables company to focus on core business Creating an Effective Supply Chain o Strategic sourcing process for analyzing the purchase of products and services to reduce costs by reducing waste and non value added activities increase profits reduce risks and improve supplier performance Emphasizes total cost over purchase price Total cost includes storage costs repair costs disposal costs and sustainability costs plus purchase price o Creating a supply chain Plan develop strategy for managing resources Source select suppliers Make design processes Deliver establish systems Manage Returns create responsive flexible network for receiving defective and excess products from customers o Effective supply chain s goal is to have cooperative relationship among supply chain partners This needs Trust Effective communication Information velocity speed at which information is communicated in supply chain Supply chain visibility ability to connect to any part of supply chain to access data in real time Event management capability ability to detect and respond to unplanned events Performance metrics Fill rate of demand filled from stock on hand o Managing returns sometimes people give you your shit back Reverse logistics process of transporting returned items Gatekeeping screening returned goods to prevent incorrect acceptance of goods Avoidance finding ways to minimize number of items returned Closed loop supply chain manufacturer controls both forward and reverse shipment of a product o Challenges Inventory transportation cost trade off Cross docking a technique where goods arrive at a warehouse from a supplier and are loaded onto an outbound truck avoiding warehouse storage Lead time transportation cost trade off Ch 8 Location Planning and Analysis pp 157 159 164 172 stop before Service Retail Locations 177 180 Strategic importance of Location Decisions o Can impact capacity and flexibility o Entail long term commitment Objectives of Location Decisions o Profit potential o Achieving balance between cost and customer service provided o Criteria depends on where a business is in the supply chain Supply Chain Considerations o Must address supply chain configuration Where your supply chain is located and how it flows Location Options o Expand an existing facility o Add new locations while retaining existing ones o Shut down at one location and move to another o Do nothing General procedure for decision making o Decide criteria to use for evaluating location alternatives o Identify important factors o Develop location alternatives o Evaluate alternatives and make a selection Identifying a country region community and site o Country factors Cultural differences Customer preferences Labor Resources Financial Technological Government Market Safety o Region factors Location of raw materials Location of markets Labor cost and availability Climate Taxes o Community factors Desirable place for workforce to live Cost and availability of utilities Environmental regulations Taxes Enticements afforded by gov t o Site factors Land Transportation Zoning restrictions Multiple Plant Manufacturing Strategies o Product Plant Strategy entire products or product lines are produced in separate plants o Market Area Plant Strategy plant is designed to serve a particular geographic segment of the market o Process Plant Strategy plant is dedicated to a unique aspect of a process o General Purpose Plant Strategy flexible and does all the shit Geographic Information Systems computer based tool for collecting storing retrieving and displaying demographic data on maps Evaluating Location Alternatives qualitative inputs o Factor Rating General approach to evaluating locations that includes quantitative and Assign weight to each factor that indicates relative importance Determine relevant factors Decide on common scale Multiply factor weight by score for each factor and sum all results per location Score each location alternative Pick a damn location o Center of Gravity Method Method for locating a distribution center that minimizes shipping costs or travel time to various destinations Sum of x coordinates times their weightings sum of weights Sum of y coordinates times