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OUTLINE. Questions? Comments? Stories or experiences with supply chains? Take roll New Homework Cost example Chapter 1 (Chopra) Chapter 2 (Chopra) Quiz next Tuesday Objectives for today Review cost concepts and calculations (Goal seek, Solver)
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OUTLINE • Questions? Comments? • Stories or experiences with supply chains? • Take roll • New Homework • Cost example • Chapter 1 (Chopra) • Chapter 2 (Chopra) • Quiz next Tuesday • Objectives for today • Review cost concepts and calculations (Goal seek, Solver) • Understand the ideas presented in Chapters 1 and 2
Another cost example • For the whole company: • Material overhead = $1M • Total Purchased direct material = $95M • Indirect overhead = $15M • Total standard hours = 125,000 • Labor efficiency = 80% • Direct labor cost = $18/hr _______________________________________________ For a product: number of hours per unit = 0.15 cost of direct material per unit = $22
Strategic Framework for Analyzing Supply Chains • Chapter 1 – Understanding • After reading this chapter, you will be able to: • Describe the cycle and push/pull views of a supply chain. • Classify the supply chain macro processes in a firm. • Identify the three key supply chain decision phases and explain the significance of each one. • Discuss the goal of a supply chain and explain the impact of supply chain decisions on the success of a firm.
Chapter 1 – main concepts • What is a supply chain? • Decision Phases • Processes • Importance • Examples
What is a supply chain? • All the activities required to fill a customer’s order • Objective – Satisfy the customer’s requirements • Do customers know what they want? How do they express their requirements? • Maximize the overall value that is generated - How should the value be distributed?
Phases • Design • Decide on structure • Planning • Define operating policies for short term operations • Annual forecast • Operation • Implement operating policies
Process View • Cycles • Customer • Retailer • Distributor • Manufacturer • Supplier • Push/pull • Push : initiated by anticipation of orders • Pull : initiated by a customer order • Examples?
Importance • Can make or break a company
Examples • Gateway- A direct sales manufacturer • 7-Eleven – A convenience store • W.W. Granger and McMaster-Carr – Distributors of MRO (Maintenance, Repair and Operational)products • Toyota - A Global Auto Manufacturer • Amazon.com – An e-business • What examples did you use?
Chapter 2 – Performance • After reading this chapter, you will be able to: • Explain why achieving strategic fit is critical to a company's overall success. • Describe how a company achieves strategic fit between its supply chain strategy and its competitive strategy. • Discuss the importance of expanding the scope of strategic fit across the supply chain.