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Chapter 11

Chapter 11. Supply Chain Management and E-Business. Materials Management System in Manufacturing. Inventory Items in Annual-Dollar-Volume Order – Universal Motor Supply Company. 88.9%. A Items (407 and 210). C Items (195, 330, 114, 274 and 359). 9.8%. 1.3%. B Items

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Chapter 11

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  1. Chapter 11 Supply Chain Management and E-Business

  2. Materials Management System in Manufacturing

  3. Inventory Items in Annual-Dollar-Volume Order – Universal Motor Supply Company

  4. 88.9% A Items (407 and 210) C Items (195, 330, 114, 274 and 359) 9.8% 1.3% B Items (021, 388 and 413) ABC Classification – Universal Motor Supply Company

  5. ABC Analysis Example

  6. How ABC Analysis is Used

  7. Cycle Counting 250 working days per year On average, a full time worker can count 22 part types per day. How many part types per day should be counted? How many cycle counting workers are needed?

  8. Supply Chain Management Vendor’s vendor Your vendor Your company Your customer Customer’s customer Material flow Information flow

  9. What Information Should be Shared? • Forecasts and sales data • Vendor  You  Customer • Capacity and output changes • Vendor  You  Customer • Sales promotion plans • Vendor  You  Customer • Current inventory levels • Vendor  You  Customer • Ideas for improvement • Vendor  You  Customer

  10. Risk of Sharing Information Vendors or customers might share your information with your competitors Try to Avoid Risk • Establish long-term contracts with vendors and customers that requires confidentiality • Relationships based on mutual trust

  11. Examples of Supply Chain ManagementPartners and Innovations Wal-Mart • Requires that all vendors communicate with them electronically (EDI) • Shares forecasts and sales data with large vendors, such as Proctor & Gamble • Results: shorter lead times and lower inventory costs

  12. Examples of Supply Chain ManagementPartners and Innovations • Ryder(trucking) • Distributes vendor parts to Ford Motor Co. • Installed Global Positioning Systems and computer chips on all their trucks • Now they know exactly where trucks are • Faster customer status response • Early diagnosis of engine problems – reduced maintenance costs

  13. Examples of Supply Chain ManagementPartners and Innovations • UPS and Fedex • Deliver antibiotics from Europe manufacturers to U.S. farmers • Mfgs. postponed packaging of drugs and let UPS or Fedex package it on plane • Faster lead time

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