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Supply Chain Management

Supply Chain Management. Def: Supply Chain What is Supply Chain Management? Strategic Importance of SCM Purchasing Operations/Materials Management Marketing and Customer Service Uncertainty In Supply Chain & Some Solutions Supply Chain Design. Accounting and Finance. Supply Chain.

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Supply Chain Management

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  1. Supply Chain Management • Def: Supply Chain • What is Supply Chain Management? • Strategic Importance of SCM • Purchasing • Operations/Materials Management • Marketing and Customer Service • Uncertainty In Supply Chain & Some Solutions • Supply Chain Design Accounting and Finance

  2. Supply Chain • Facilities, functions, activities for producing & delivering product or service from supplier to customer • Planning, managing, acquiring, producing, warehousing, distribution, delivery

  3. Scheduling Information Cash Flow Order Flow Inv. Customer Customer Customer Supplier Supplier Supplier Manufacturer or Service Provider Inv. Inv. Inv. Credit Flow Material Flow What is Supply Chain Management? Marketing/ Sales/ Cust. Serv. Purchasing- Vendors Operations/ Materials Man. Accounting and Finance

  4. Strategic Importance of SCM • Deals w/the complete cycle of materials flows • SCM plays key role in • Product customization • Quality control • Cost reductions • Speed-to-market • Effective SCM is to balance the production stream with uncertainty (customer, supplier, economic, etc.)

  5. Purchasing • Why Important? • Substantial % of sales, both goods and services • e.g., Industry % of Sales All 54% Lumber 60% Food 63% Petroleum 83% • Quality of goods and services produced are directly related to those purchased/received

  6. Purchasing • Selecting suppliers • Ordering materials • Shipping & delivery of raw materials • Information management • Quality management - w/regard to suppliers • Customer service - w/regard to suppliers and fellow workers

  7. Operations/Materials Management • Ordering materials - in conjunction w/purchasing • Inventory control • Scheduling production & capacity • Shipping & delivery - in conjunction w/warehouse • Information management - linked to 3 major business areas • Quality management - garbage in/garbage out principal • Customer service - vendors and final customer

  8. Forecasting demand Selecting suppliers - in conjunction w/purchasing Shipping & delivery - contract requirements Information management Quality management - first place customer complaintsand/or compliments Customer service - make the sale next time? Marketing and Customer Service

  9. Uncertainty In Supply Chain • Wrong forecasts • Late deliveries • Poor quality • Machine breakdowns • Canceled orders • Erroneous information

  10. Some Solutions • Vertical integration • Single sourcing • JIT - moving suppliers closer • Keiretsu - Japanese concept of partnering a small # of suppliers and vertical integration • Information technology improvements- MRP, ERP • Improved inventory control - goods as well as services

  11. Supply Chain Design • Strategic issue • Apply quality management principles • Control inventory • Work with suppliers & customers to achieve goals • Major goal of distribution is speed • Locate close to major markets • Use IT to speed information flow - e.g., EDI, Internet, etc. • Outsource international distribution

  12. Summary • Def: Supply Chain • What is Supply Chain Management? • Strategic Importance of SCM • Purchasing • Operations/Materials Management • Marketing and Customer Service • Uncertainty In Supply Chain & Some Solutions • Supply Chain Design Accounting and Finance

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