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    12 views62 pages

    Supply Chain Suggestions

    Uploaded by

    Shuborna Fatema

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    © All Rights Reserved
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    CSCA Workshop Agenda Section-01: Overview. Section-02: Strategy... Section-03: Framework for biscussio Section-04: Fundamental Issues..... ection-06: Role of Inventory in the Supply Chain.. ection-07: Material Requirement Planning... Section-08: Sourcing. Section-09: Purcha: fection-OS: Aggregate Planning........ Slide No. on che 7 23 31 39 49 61 69 3 81 91 | Kestion-13 Section-14: Section-15: Section- 16: ‘Appendix Appendix 2: Appendix 3: Appendix 4: Appendix 5: Slide No Sales Order Fulfillment .-csennn 99 Lean and Continuous Improvement Tools... 103 Sustainability 7 Team Dynamics.nnucunenrnnneene 123 DDMRP. 0 1BL CSCA Sample Questions. 143 Supply Chain Terms, 14s References. 151 Industry/Country Trade Rules & Regulations... 155 ISCEA prohibits the reproduction of any part of this workbook. This workbook can only be used at an ISCEA workshop by an ISCEA Authorized Knowledge provider™ All rights reserved under U.S., International, and Universal Copyright Conventions in, move 5 oppuriun \nformation Product Funds a a ah | SLI, Apetoeny®! tyaia densi © Arana Sea cannarres SS Plotemane atthe Nant @ Merce soreath Arwrigs (em AETHIOPIA creneun AFRICA Supply Chain Objective---maximize overall value generated — Value (Supply chain surplus)-—-the difference between what the product is worth to the customer, and the-costs incurred by the chain in providing the product * — Profitability--Revenue generated from the customer minus the overall cost across the supply chain Profit = Revenue - Cost Supply Chain Managers play a ~ Key Role in simultaneously _“Sp| increasing all of these measures \] Net Profit (np) ns Revenues ~ Expenses Js] Return on Assets (ROA) or Return on Investment (RO!) TY 7 Net income / Assets Deployed 22s] Cash Flow (CF) ce 7 Cash Income ~ Cash Expenses Linking Financial Measures to Supply Chain Operation Measures Financial Measure! that Really Matter: Operation Measures that Really Matter: Ae throughput (ry? B-toventory W- Operating Expense (08) Net Profit (NP) (ROA) or (RO!) Cash Flow (CF) Managing the Cash Flow Order Delivery + Sale + detvery + Actual placed invoice payment date Days in Days in receivables {average customer payment tie) ays in payables (average time to payment of suppl) payment Expected payment dato Cash flow cycle Cash to Cash Cycle Time The cash-to-cash cycle time calculates the time operating capital (cash) is out of reach for use by your business. The speedier your cash-to-cash cycle, the fewer days your cash is unavailable for use in propelling your value stream. You can use this metric to gauge whether you are operating "lean" with regard to cash. ‘Also, good performance on the cash-to-cash measurement has been associated with improved earnings per share C ating calcula fine nto Cash cycle nh Ca ce ‘h "cocked up in Receivables ra tis Example: | 0s pay Cash to Cash Cyele 00 Days Inventory +45 Days Receivables - | 30 Days Payables = its faster (on- | company can collect the paymen| | than hol ss rventory, and negotiate beter (longer) | aoe ie tems tteanrecuce the Cash to Cash time form {08 10 30days. This cash avallable 75 days sooner to | support the supply chan, | 30 Day Cash to Cash Cycle = 45 Days Inventory + 30 Days Receivables - | 45 Days Payables Supply Chain = + Sources of 7 ra Att * Sources Of SUPPIY chain cog Information, products, op jury, "Om + stages of the supply chain SUpDIY chain revenue cua bat Supply Chain Competitive strategy--the plan to utilize the prodycls“Or-servites of an organization to satisfy the demands or needs of customers or Customer segments * Supply Chain strate BY Must be in agreement with the competitive strategy {the customer need being satisfied is "ow cost or "volume variability”, then ‘he supply chain must by provide Variability” Framework to [2 Attain Strategic Fit (Conia ‘Supply Chain Strategy Efficiency Sy Shain seructure Responsiveness (Cross Functional Drivers ‘Adapted from Chopra, 1, S.and Meindl, P, Supply Chai Management, Prentice Hall, 2010 | “SN —fedeworkto Attain strategic Fit "| ee Senne] Prone Pricing | Lee ‘Responstvencss ‘Sourcing Information snetional DIvers Cross Fu strategy ting the boxes illustrate the «Arrows cone’ jnter-relatedness of the drivers w Framework to WZ Framework to Attain Strategic Fit Attain Strategic Fit . information) = data and analysis regarding inventory, + Facilities — places where inventory is stored, assembled, or fabricated transportation, facilities throughout — production sites and storage sites the supply chain + Inventory + Sourcing decision | entot aw materials, Work in Process(WIP), ren anctions a firm performs and finished goods functions that are outsourced = inventory policies + Pricing + Transportation me ice associated with goods and — moving inventory from point to point services provided by 2 firm to the supply chain ina supply chain — combinations of transportation modes and routes lo» ee oducts or services which er than the competition are on some dimension the WG Strategy Consistency and support between competitive strategy, supply chain strategy, and other functional strategies is >\ / Ypical Functional Strategies Typical Functional Str 1, Product and Service Dy Ate, evelopment Strategy: 3. PUPPY Chain strategy, WP Specifies the new products and/or services Determines the at a that the company will attempt to develop Procurement, transporte « Manufacture of Product cm Sor 2. Marketing and Sales Strategy: Specifies how distribution of producy the market will be divided and product * What Processes each sa ey Positioned, priced, and Promoted . Strategic supply Chain dec, — locations ang Capit — Products to be Made gy, various locations Modes of transportatiy, Information systems Long-term and expensi y Chain Strategy Nsive versus Efficient oe Push/Pull View of Supply Chains Procurement, Manufacturing and Cust . Replenishment and ustomer Order Cycle PULL et PUSH PROCESSES wo PROCESSES Nyftll, Yo shook make. +0 | Customer paer Order Arrives 15 | Decision issues Decision issues alization Facilities imity versus pecentt insider (€.8» PFO™" ‘Centraliration ver factors 10 £0) omens) Capacity Aranutacturing methodoIoey Warehousing methodolOBy overall trade-off: Responsiveness versus efficiency Transportation Mode of transportation: + air, truck, rail, ship, pil transportation + vary in cost, speed, size of flexibility = Route and network selection + route: path along which a product is shipped + network: collection of locations and routes In-house or outsource peline, electronic shipment, Overall trade-off: Responsiveness versus efficiency v a. | y X/ Decision issues Inventory Decision issues Type cision isst Raw materials finished goods with + Information Amount more inventory put greater cost ess. inventory’ responsiveness Beater « — Approach «cost of carrying additional Versus cost of flexible production off: Responsivere: vera Overall trade: efficiency Sourcing, In-house versus outsource decisions + Comparative advantage — Supplier evaluation and selection + Best value criterion Procurement process + Type of contractual arrangement Overall trade-off: Increase in suppli profits versus the risk of third involvement Decision issues C Decision issues Prog Ss : 1 ‘, + Information Pricing, PIV cha, ey Pea werst pal or consideration of economies of seale Sh = Cooratnaton and information sharing = Gveryday low pricing versus Nigh tow Shy, — Forecasting pricing tb = Untteation oF enabling technotoges = Fined price versus menu pring ut Internet P ERP systems — Overall trade-off: Increase the firm ; 2p profits inve, on "+ overall trade-off: Responsiveness. versus 285 efciency ioe ne 21 .-— Balances demand and supply Supply inputs — Production orders, purchase orders, inventory Demand inputs: > Actual orders, demand forecasts Challenge is to keep balance Difficult > > Customers change orders Operations and suppliers experience problems Forecasts are rarely 100% correct Planning no. longer done in isolation » Forecasting The art and science of ma what future demand ang con Phe — 7 The basis for all strategic ang metwhecasting ina supply chain. Examples arene, — Production: capacity, schedujn, | Revenues aggregate planning Mb visitors a Marketing: sales foray | PAM Ia Promotions, new production int,’ the tore — Finance: —plant/equipment actual budgetary planning 1 expect = Personnel: workforce planning layoffs All of these decisions are intertelatg we + Forecasts are rarely correct. Long-term forecasts are less accurate than short-term forecasts eaten + Aggregate forecasts are more accurate than disaggregate forecasts + Characteristics systematic component -- level, trend, and Forecasting seasonality — random component of the forecast- deviation from the __ systematic component the goal is to predict the systematic component and estimate the random component, — Forecastive” + Techniques Qualitative—Executive opinion, + survey, sales force composite = Quantitative » Time seties—Moving 3 Weighted moving 2 Exponential smoothing, Nait » Causal—Regression Examples and exercises to follow pro}oethny, Mons wil ari a Forec sting at Disney World). os are derived from people luling, In, how many visitors and how they spend thelr money + Dally management report on the four theme e ath, parks near Orlando contain only two numb Hntiodiy the forecast af yesterday's attendance and the tive actual attendance, An error of zero bs h, expected ano hy related Forecasting at Disney World wow yuh + Lach year a staff of 35 analysts and 70 field personnel survey 1 million park guests, employees, and travel professionals + Daily, weekly, monthly, annual, and 5 year forecasts are generated + Labor management, maintenance, operations, finance, and park scheduling utilize the forecasts to adjust opening times, staffing levels, guests admitted, etc. Ivey ven Moving average Forecasting at Disney World yo Inputs Include airline specials, Federal Reserve policies, and the vacation schedules for 3000 Schools from around the world, etc. + 4.5% average forecast ert for their 5 year forecasts + 0% to 3% average forecast error has been tained for thelr annual forecasts «Twenty percent of the customers come from outside the USA F has been attained Quantitative example + Naive forecasting—assumes demand in next period will be the same as in most recent period, Somewhat cost effective and efficient, and is thought of a good starting point. + Moving Average(MA)—isa series of means and is used when little or no trend ts involved. ¥.demand in previous n periods —Ee—E—E——oierrrr— 7 1damental Issues supply = Common terms + Make-or-buy—decision reg Outsource—the Purchase * \VMI—Vendor-managed inventory; supplier product at their customer’: 2 CRP—Continuous replenishment programs; based on POS data at the retailer, + Bullwhip effect—fluctuations in ore supplier s location jarding the manufacture or purchase of item or service of an item or service is responsible for all decisions regarding inventories of the wholesaler or manufacturer replenishes a retailer, or warehouse withdrawals ‘der increase as they move up the supply chain — Supply management + Production capacity Seasonal workforce 40) + Workforce time flexibility cat + Subcontracting ~ 7 Flexible production equipment * Inventory * Common components across multiple products * Build inventory for Predictable demand items high or Kk + Inventory = Pressutes for high inventories ~~ » Customer Service » Ordering Cost/Setup Cost > Labor and Equipment Utilization » Transportation Costs >» Quantity Discount a — Pressures for low inventories. —~ » Cost of Capital » Storage and Handling. » Taxes, Insurance, and Shrinkage use subcontractors and mm workforce Promotions or demand / Aesresate Planning Methods + Chase demanded during Produce exactly what the period in which i ts demanded + Level Produce an amount equal to the average demand for all periods in the planning horizon PX + Hybrid Various combinations of the above SS Chase Str Uapurns - ; up or down, from the prior period. Chase StrateBy Accounting Period a6 6 7 8 9% AC 4 2 3 7 Ai Requirement’ 5 6 6B 15 17 20 15 15 40 eae Production level 5 6 8 15 17 20 15 45 10 1 Ending Inventory 0 0 O 0 o 0 0 0 90 Capacity Variance 0 1 2 7 2 3 5 0 5 7 37 unit production changes x $4 eact riot p 9 ue 14y \ et pu M4 | ee —— 1000 g | Level & Chase Strategy Considerations Low carrying & high change costs favor level strategy + Low capacity change & high carrying costs favor chase strategy + Storage space + Flexibility of workforce / cross-training + Product mix, as well as volume * Counter cyclical product lines 37 E i sumpunney + which reduction inventory Inventory locatior + IL responsivent priority, a firm can | why many program: profit « Revenue — Cost (as stated earlier) cost of ma ng and/or set-up cost eater detail shortly) Total Inventory Cost holding costs + orde (these to be discusses wand an ess is One of the preatest costs to an organization {yet viewed as an asset from an accounting inventory closer to perspective) + If cost is more IF reduced to make U Role of Inventory Inventory cate¢ in the Supply Chain Teaver — Cycle inventory — Inventory types : ae pie + Raw material, WIP, jemand betv — Inventory users — Anticipation Inve ws Manufacturing (obviously) * Inventory b “ir Service variability in — wholesale and retail — Safety inventory — restaurants + inventory — hospitals exceeds ft — Inventory categoriesW” shortfalls ¢ + Cycle, anticipation, safety, in-transit * costs of ce cost of los — In-transit inve + En-route ownersh’ of the ca tory | mismatch be of cost and it f inven ‘ Vpynction ol ts becouse is a source ory ovis suppiy and demand. It influences nsiveness pemand may be from an internal oF external production source Ww) veernat—decouPle / operations, need for components for assembly operations prrernal—customer order, yainst inflation | T dicounts, hedge a upward price changes invent© quantity ind ly _ | nventory Perf — orman Measures ce * Invent ory tur ns times inventory mi ratio of the turn: average a : Be ape ee cle a ost), to the ludes ji isa ue, recehatlee id level met memories, acc i slides 17 ang (cused ounts pelle that ane ee Previn i nd Fegate j vento; Nventory * ABC analysis an — Used to establish policies that focus on the few when the receipt of critical parts and not the many trivial ones nished goods exceeds — Divides inventory into three classes based on annual dollar volume eted when their » Class A - high annual dollar volume heir receipt. » Class B - medium annual dollar volume » Class C - low annual dollar volume 1g of inventories in stitive priorities of the inventory control are > Counting, Record * Cycle counting — [tems are counted and records updated on a periodic basis He Pee a — Necessary to make pre Allows organization 1 10Wwe ~ neste? cise decisions about and shipping scheduling, one ‘d keeping must Incoming and outgoing recor be accurate and timely stockrooms should be secure master pi ag independent a = Economic Org, independent, and ge, %, = Safety stock caley sete anddependent “ns = Material Requirem, dependent SS tat cost ents, Toten Economic Order Quantity (EOQ) ee EOQis the lot size that minimizes total annual inventory holding and ordering/set-up costs. E0Q are 1) 2) 3) 4) 5) Assumptions of The demand rate is constant and known with certainty There are no constraints gn lot size The only relevant costs are holding costs and ordering/setup costs = Decisions for items can be independently of other items, lead time is constant and known with certainty made Economic Order Quantity —_—_—_ EOQ variables or symbol representations ° Q=lotsize * —H=holding cost per unit ° D=annual demand ¢ S=ordering or setup costs per ¢ D/Q= number of orders or set- © (D/Q)S=total order/set-up cost ° Q/2=average inventory © (Q/2)H=total holding costs * TC=total cost= (Q/2)H + (D/A g costs + ordering/set-up cost 2 21s) =<, — “One solution can be obtained through calculus, itis Holding cost = Si Ordering cost =2 Q (s) (Q) — An alternate algebraic solution is somewhat EOQ — From the previous slide, the EOQis equal to dps 2 = annual demand 7 ordering or setup costs per lot H = holding costs per unit £0Q a minima problem, The minimum point on the “total cost” (TC) curve is found by differentiating TC with respect to Q, setting the result equal to zero, and solving for Q apparent through review of the previous graph That intersection also corresponds to the lowes point on the total cost curve; it is the EOQ. (Q/2)H = (D/Q)S is the representation of that intersection So the EOQ is Qin the equation: (Q/é praic manip Through a little algeb A Lot sizing policies have consequences + In this case $3033 - $1124.10 = $1875.90 Safety stock + inventory held in case forecasted demand \ exceeds expectations, or supply shortfalls occur * costs of carrying too much inventory versus cost of losing sales * example to follow Service probat orderi [tie era requerents pan Sti) + Master (MPS) (ex Production Schedule Specifies what is to be made and when The MPS is the result of the production planning process MPS is established in terms of specific products The MPS is quite often fixed or frozen in the near term part of the plan The MPS is a statement of what is to be produced. — MPS is beneficial to Marketing (also) + Available-To-Promise (ATP) Quantities Preparation of the MPS for each planning period is driven by the larger amount between the forecasted amount and the “booked” orders. — ATP Indicates the amount of MPS that. can still be used to meet new booking. requests » Booked is larger: ATP = 0 » Forecast is Larger: ATP = Forecast ~ Booked = Oracle provides the ATP inthe Horizontal Plan window and Planning Detail report absolutely nt demand % accuracy accurately eipts oduce, or he order, n times between and the ction e Bill of Material (BOM) List of components, ingredients, and materials needed to make product Provides product structure * items above a given level are called parents + items below a given level are called children * items may be both a parent and a child Product structure example of the same item ‘ALadder-back chair piace Visser renee | [Biannes Order Releases D [Gress Requirements, = [Scheduled Receipts rejected On Hand [70 } [Net Requrements: vet | Planned Order Receipts: wo [Planned Order Releases: FG [eros Requirements T 7 [Scneauled Receipts : | [Frojestea On Hand T 195 | [Not Requirements Planned Order Receipts 195 | [panned OrderReleases | 1957 i MRP Management Early MRP systems + MRP is a dynamic system * Criticized for planning * Facilitates re-planning when changes occur no consideration for tt * System nervousness can result from too many needed to meet the plz changes Possess adequate capa: * Time fences put limits on re-planning * Modified inputs to in * Pegging links each item to its parent allowing effective analysis of changes Adequate staffing and accurate records are pre-requisites to operational success and time standards r resources A less cumbersome ar * Firm Planned Orders Rough-Cut Capacity P| Rough-Cut Capacity Planning VE reser schedule Resource Rough-cut Profile ™ RCCP pecs ¥ Capacity Load Rough-Cut Capacity pase Rough-Cut Capacity Planr limitations _Th Converts the master production schedule(MPS) into load requirements for critical resources Can be performed as often as necessary prior to execution of the MPS Impact of proposed changes can be assessed prior to implementation Uses profiles of resources and not detailed foutings for all resources Addresses only critical work-cent May ignore work in process or inventory May not consider job sequence May not consider job set-up tin Chain Make Vs. Buy or Manufacture vs. Outsou rce + Sourcing is the set of bus required to purcl + Sourcing proce The Role of Sourcing in a Supply Design collaboration Procurement Sourcing planning and analysie, Benefits of Effective Sourcing Decisions Better economies of scale can be achieved if orders are aggregated More efficient procurement transactions can significantly reduce the overall cost of purchasing Design collaboration can result in p are easier to manufacture andi distribute, resulting in lower overall costs 7 Good procurement processes tan facilitate coordination with suppliers Appropriate supplier contracts can allow for the sharing of risk-. Firms can achieve a lower purchase price by increasing competition through the use of jucts that auctions wast 2 corporm Supplier Scoring and Assessrr Supplier performance should be comp the basis of the supplier's impact on to There are several other factors purchase price that influence total co: partial order delivery, poor quality flexibility, viability, etc. Supplier selection has become am important decision because a success may well be determin: company's partners in the supply ¢ ead Time replenishment Lea erie performance supply Flexibility Delivery Frequency Minimum Lot Size = supply Quality 1 Inbound Transportation Cost Pricing Ter rere Capability °'tinay,, | —————~ + Design Collaborate, SOF Selection — Capability en + Exchange Rates, Duties " Tae, + Supplierviabiiny FNAL ‘Supplier Regui Lead-Time Regpir Timely Shipping, ‘Quality Assurans ‘Membership a Vendor Selection — In practice aero ‘Transportatio Walmart ‘See fier Agreement (All Suppliers) Je ee ens a veal binding agreement with Walmart Potential suppliers should revi, completely with their attorneys, and/or with an attorney who specializes in supplier contracts, potential suppliers to make sure they ‘understand all terms and conditions, particularly all stip; allowances, new store discounts, merchandise warranties, defective/return merchandise allowan,. silowances, soft goods allowances, late shipment penalties ‘and markdown dollars or discounts, ggreement does not, however, create an obligation on the part of Walmart to transact businsswisy ae AXetail Link® (Product Suppliers) 7 Metal Link® provides information and an array of products that allows a supplier to impact aly pernsce BY using the information available in Retail Link®, suppliers can plan, execute at 7 ucinessas_thus providing better service to our common customers, Retail Link® is a website thai, any area within your company. Walmart requires all product suppliers to participate in Retail Unk’. benefits it provides. Should you become a supplier with Walmart, you will be provided with the re: accessing Retail Link®, {lectronic Data Interchange (EDI) (Product Suppliers) EDI has proven to be the most efficient way of conducting busi i x t ig business globally with li \' sending and receiving core business documents. Walmart/Sam's Club has €I docume ito 7 areas: Supply Chain Management, Global Indirect Sourcing, Accounting, Inventory Manage reer ement ani Vendor Selection — In practice. Supplier Selection- Auctions and Other Supplier Requirements at: Walmart + Lead-Time Requirements caer (Product Supp! Quality Assurance Through Testing Membership at ICIX Industry Knowledge and Integrity Transportation Logistics Equal Opportunity Practices Office of Regulatory Compliance (ORC) Security Source Tagging 0576)" oe) ° english 2 ower price -to higrar decte 3 higher ‘pree to Go? Coimibce tae Sale Bia = NO” basen Nee : ony par eipartl, lig hor Wie Contracts & Supply Chain Profits | Contracts and Supply Chain eye etd OF + Many — shortcomings in supply chain Performance performance occur because the buyer and supplier are separate organizations and each . See Product Avail tries to optimize its own profit vain Profits . P = Buyback Contracts —? 0%" + Total supply chain profits might therefore be - eee lower than if the supply chain coordinated Ye actions to have a common objective of + Contracts to Coordinate Supply Chain + Contracts to Increase Agent Eff it in profits maximizing total supply chain P + Contracts to Induce Performance Improvernent carer evenue Design Collaboration + 50-70 percent of spending at through procurement 80 percent of the cost of fixed in the design phase Design collaboration with supplier can resul reduced cost, improved quality, sn decreased time to market ee Important to employ design for ly for manufacturability Manufacturers must become effec coordinators throughout the supply a manufacturer ig © purchased part ig gistics, design tive design chain surcing Planning and Analysis + A firm should periodically analyze its procurement spending and _ supplier performance Procurement spending should be analyzed by part and supplier to ensure appropriate economies of scale Supplier performance analysis should be used to build a portfolio of suppliers with complementary strengths — Cheaper but lower performing suppliers should be used to supply base demand Higher performing but more expensive suppliers should be used to buffer against variation in demand and supply from the other source Procurement Process prea tToeess 8 whlch the supplier sends Puen’ FesPense to orders place by the Gear {0 fnablo orders to be oh ed on schedule at the lowes overall cost ,Two main categories of purchased goods: ~ Direct materials: components used to make finished goods Indirect materials: goods used to support the operations of a firm Focus for direct materials should be on improving coordination and visibility with, supplier Focus for indirect materials should be on decreasing the transaction cost for each order Procurement for both should consolidate orders where possible to take advantage of economies of scale and quantity discounts laced and st possible Making Sourcing Decisions in Practice Use multifunction teams Ensure appropriate coordination across regions and business units Always evaluate the total cost not just lowest bidder Build long-term suppliers relationships with key 7 8 r >urchase Order (PO) GC A” Electronic Data Interchange (E Ce | ——— * Commercial document a * Computer to computer exchange. — Routine business documents = issued by a buyer toa seller for products or + Invoices, purchase orders, p services —- Indicates order status, etc. + Types — Standard format + Quantities — Special software + Prices + Translates such document: + Other terms and conditions out of a generic form — legal offer to buy products or services + Enables buyer and seller t — Contract exists when seller accepts the PO information regardless. + hardware and software dif vy EDI - Example §s steps and touch points at Hapag-Lloyd EDI Process lor Managed Inventory with Suppliers -y with suppliers (supplier facing VM) enables you to share on-hane re von with suppliers, transfer replenishment responsibility 10 suppliers, 3: ment processes. collaborative Planning uses Vendor Managed Inventory with suppliers to automate the replenion, ‘aver inventory, improve supplier performance, and drive out non-valued added costs. S You can provide suppliers necessary information to manage inventory they provide. Vendor M: integrated with the execution system to enable any desired level of automation in fuffillment, ent CoS love Manufacturing facility layout strategies — Process focus — Product focus —>--eO— — Fixed-position —> areplone: uaa Water saginghesenatons es Example of a manufacturing Operatio Product Paclttes are oy nan High votunve te He Pontinue pttictont proe Manufacturing — Make-to-order - make products ¢, low volume,(pull — Assemble-to-order received. (pull process) = Make-to-stock - holeli immediate delivery, customer delivery times. ( — Mass production: A term uses the make-to-stack st Strateg; Process) minimizing [push process) for aline process that rategy. Sugan oil} ocertty] i TS such as AME tees minima Manufacturing Techaoigey — 8 Technology Examples Robots, * _CNc.. “omputer num, tical control * ENS —Most Floxibte manufScturis Consist of three m nain systems: ~The “work machines” system | \ often automated CNC machines ‘Material handling system \ Connects the work machines to | optimize work flow Sentral control computer system Controls material movements machine flow). INE systems \ and —— ; amples Manufacturing TechnoloBy ExamP i «9 jg a 3D evice for measuring thi + CMM Coordinate measuring machine uae eine characteristics ofan object. This hine MAY be manually controlled by computer controlled. 7 f ided desi8 (cab) is the use © computer systen esign: Computer-aided mi Jated machinery int + cabd/e _-computer-al modification, analysis, OF optimization ofa o control machine tools and re computer software t Computer (CNC) mac veia-otis mn ern ~ . o oa peoport ation 18070 ee cchedlinns intranet atien pot ott ation SECKIORS it Br actin Mae fort SOE _— . Pe 1 ion Stake | jransportatl holders Transportation _eronc a ' Modes “ . | foe party that requires the movernent of the et | tween two points in the supply cha ~ TUT ruckoad), uy | product be ly chain a ) Utes I rier 2 C1 9 drolo. y fai I< The party that moves or transports the product, Package c 2 Carriers | | policy makers | 1 fachaee Carers prevent abuse of monopoly power. Promote fair erase te petition. Balance environmental, energy, and \. tment social concerns in transportation \ + Intermodal + Infrastructure owners and operators \ Apublic good. Monies available for maintenance and expanding capacity as needed, igh fied costs + sans we lage, heavy, oF high-density | products overlong distances Ideal for very heavy, low [| sewer ae | + feritsves, value shipments that sitive / improve cerice ~ Ofek deta at picky ick and def ed) 7 > Yard operations - “Arai oder tings LTL Less Than T,, || i. | Higher fed coms yg, costs UCkig Pricing to encourage Slower than TL A Economis of eae, . as distance traveleg Suited for shipments too, than halfa TL jajor issues: rae OF consoig — Utilization - Vehicle routing = Customer service large fixed costs and re costs ‘deal for small, Sensitive emergen than Sooibs. Key issues Location/numb, Location of fee Schedule optim Fleet assign, lative, high-value jpg, cy shipments, Tey er OF hubs t bases/cre, ization 1 1 - carriers SX | Water | pct sae Feats, UPS, USPS, and DIL that | maf about 180 pounds . Very lege soe dda : = + Slowest a ene aetna ean mode fr e-businesses (eg, Amazon, + Neyses ference Myvon of shipments (especially ea rant package cartiers that use air asa Maat Ports, customs, oper methiod of transport) Management of containers = Port conge: ipeline Internet Ve + High fixed cost * Low fixed cost + primarily for crude petroleum, refined * Music, Movies petroleum products, natural gas + Fast delivery time + Best suited for large and predictable demand + Inexpensive method of delivery 4 a in Transportation Risk Management int we? rexity of transportation decisions Transportation - resouer : i main risks to be considered in transportation bast wentcation of a te dsiven — Risk that the shipment is delayed | Oe - Risk off disruptions. : | Sen tan » aaltheineioe ie i _ Gpsapplica — Decrease the probability of disruptions — Alternative routings — In case of hazardous materials the use of modified containers, low-risk transportation models, modification of physical and chemical properties can prove to be effective o7 exw pea Fr cet iF - Cos! e ae uel 0 jes for ANY Mode(s) of Transport ret FAS - Free FOB - Free FR - Cost an nal Chamber of a of Com nmerc © incoterms® 2010 n forks (named place of de very) x We e carrier (named place of rriage Paid T pie ee ce P oo aid To (named place, € of desti ination) ip - carrie’ red At Terminal ( named termi terminal at port o r place of destinati tion) vel ered At Plac e (named place of desti ination) vered Duty Paid (nai med pl: r sea and Inland swaterivay qa destination) oer Ship (named port treaty 7 aah Te ortofthinmedth P ight (named aioe ieinute ) n (named port of de +t, Insurance and Freight S \warehouse Activities . Receive Items Waret . Identify Items . | + Dispatch Items to Storage 7 + Hold Items + Pick Items » Assemble the Shipment + Dispatch the Shipment + Operate an Information System youts y Warehousing and $ V anjective Is 10 optimize trade-offs between handling costs and associated with warehouse space + maximize the total “cube” of the warehouse — | utilize its full volume while maintaining low | material handling costs Eo eee Warehousing ange . dg! toy YAly i ne invereat yee | cross-Docking or are moved directly - from receiving to shipping nd are not placed in on inthe warehouse |NBOUND Fequires tight ‘cheduling and accurate shipments, “code or RFID Ntifcation useq for bs *dvanceg shipment Heation as Materials Sales Order fulfillment process; es ulfillment is the et fl Product Inqui vitial i . airy nti inqu GP te bf feats nau £0 delivery (ae ‘ a log request " OS wo les Quote - Budgetary or availabitiy fet ‘Order Configuration - Where ord 7 ¢ Ms aes © the processes a election of options eee i fy j tlre to customer orders. nae . Order Booking - The formal order placement or closing of the deal (issuing ig by the 1 Purchase Order) ae Sales Order fulfillment processes sales Order fulfillment processes Corder processing: Process step where the distribution center or warehouse § responsible fill oder (receive and stock inventor pick, yack and ship orders). ("Shipment -The shipmer we acknowledgment / Confirmation - Zenfirmation that the order 1S ‘booked and/or received » Aawoicing | Billing ~ the sending of the nt and transportation of ods / services cpemercial invoice /billto the customer « order Sourcing / Planning - Determining the oods oye [cation of item(s) to De shipped « /pelivery ~ The delivery of the goods to the consignee / customer rs, if needed Zaer Changes- Changes to orde + Aettlemel delivery Onc ence te aces unacceptable / not required S> > rad, wus r nally tROURAE to be ag i? yas Oe hilosophy that. shortens Pg Sct petween the customer order ang me ey eliminating waste.” ‘ne stort he first texts on Lean.) the” ine ol or {Quote 4 to the misconception that it wag js bos Fee to manufacturing, It is now ji pplica also be applicable in the service | agree nent healthcare, banking, not. 000% (60 gett", ets) for? Lean money put into raw pia or finished «geile hnt of as live money. It is money in the sis hove, but having a stock of raw material or if Loin excess of requirements is waste—- pone: waste, turns up in high prices usin jnsed goods |i ke even | and low wages: Henry Ford Characteristics Of Lean Pull production Efficient layout and standardize Cross-trained workforce. Total productive maintenance Close supplier relationships — Close customer relationships — Continuous improvement , jichi a ad ps was Talichi Ohno a — Wo eet production Engineer Wont! re yo cnenge was to compete with Us “Big = Bn me Siness \y + Sree US approach wener not use ¥> : could a eed market volume a oe Py ca 7 nan ¢ an tthe system development began shortly NOn-Vatue mee” _ © Ade, after WW perfect Cito pecades to P' , SStOMeT auld noe f dat of the techniques and tools - ‘ red are focused on activities that ul donot add value

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