UT Knoxville BUAD 331 - Chapter 3 (27 pages)

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Chapter 3



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Chapter 3

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Pages:
27
School:
University of Tennessee
Course:
Buad 331 - CBM I: Supply Chain Mgt
CBM I: Supply Chain Mgt Documents

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BA331 Supply Chain Management Chapter 3 Shay Scott Ph D Department of Marketing and SCM Managing Director Global Supply Chain Institute University of Tennessee sdscott utk edu Business Value Hierarchy Equity Cash Flow Improve Earnings Increase Revenue Reduce Costs Better Utilize Assets Source Think Like Your Customer McGraw Hill 2005 Shay Scott 2 Supply Chain Impact on ROI Customer Service Availability Sales Revenue Profit Procurement Efficiency Costs Pipeline Mgmt Cash Acct Receivable Acct Payable AR AP Just in Time JIT Inventory Asset Mgmt Fixed Assets Shay Scott Return on Investment Capital Employed Let s look a bit closer 3 The Cost of Inventory The Cost of Inventor y Capital Costs Investment in Inventory Interest Financing Expenses Service Costs Insurance on Inventory Taxes on Inventory Storage Space Costs Mfg Plant Warehouses Company owned Warehouses Rented Warehouses Public Warehouses Inventory Risk Costs Shay Scott Obsolescence Damage Shrinkage Theft Relocation 4 Cash Flow Cash to Cash Cycle Days of Inv Days Accts Rec Days Accts Pay 5 Traditional Methods of Measurement Traditional Goal To increase scope and accuracy in functional measurement Asset Management inventory measures Cost costs of activities functions Productivity relationship of input to output usually labor and equipment Quality physical and information Customer Service reliability timeliness etc Shay Scott 6 Traditional Assessment Deficiencies Bias toward cost and internal customer service metrics Belief that internally generated customer service and quality metrics reflect a customer perspective Customer service metrics are not jointly defined Metrics are on average over time rather than de averaged absolute metrics Functionally oriented Unable to assess performance along horizontal process Unable to assess financial perspective Shay Scott 7 Typical SC Performance Metrics Shay Scott 8 Process Metrics Focus on the total process performance as opposed to the functional view Internal Supply Chain



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