Summers 2020

Operations and Supply chain management

Team Disha
Part 1:Language of Operations & SCM
Supply chain management
planning and management of all activities involved in sourcing and
procurement, conversion, and all logistics management activities

Operations
design, execution, and control of operations that convert resources into desired
goods and services

Logistics management
plans, implements, and controls the efficient, effective forward and
reverse flow and storage of goods, services and related information
Procurement vs Purchase

Request for Quote (RFQ) - focuses on price

Request for Proposal (RFP) - focuses on quality and delivery
Supply chain Value chain
(inside out) (outside in)
Supplier Manufacturer Vendor Customer
…………...

Tier 2 supplier

Tier 1supplier

OEM

Vendor

Customer
 Quality
Conformance to requirements

Quality Assurance vs Quality Control

 Lean Six Sigma

Objective - Reduce waste Objective - Reduce variation

 Lean (reduce waste)

8 types of waste

D O W N T I M E

Defects Waiting Transportation Motion

Overproduction Non-utilized talent Inventory Extra processing

Efficiency Effectiveness

Overall Equipment Effectiveness

 TAKT
time

Cycle time

Lead time
Order to Delivery

Flow rate or Throughput

WIP = Throughput x Lead time

Economies of Scale Economies of Scope

Reduces average cost of production/unit

Single product Variety of goods

Internet of Things vs Industry4.0
Part 2: O & SCM concepts simplified
Manufacturing
Make to order Make to stock
or or
Pull type Push type
Level strategy Chase strategy
Inventory
 Inventory

Raw materials Work-in-process Finished Goods

 Techniques for Inventory
Control

ABC analysis VED analysis FSN analysis

(Annual consumption value) A (Criticality of item) (Usage frequency)

- 70% of ACV - 20% of items B - V - Vital F - Fast moving

25% of ACV - 30% of items C - E - Essential S - Slow moving

5% of ACV - 50% of items D - Desirable N - Non-moving

 Economic Order
Quantity (EOQ)
Safety stock

A - Annual Demand

O - Ordering cost

H - Holding cost
Vendor Managed Inventory
(VMI)
 Shelf life

Trade life

Manufacturing Date at which Expiry

date it reaches the date
retailer
Quality
5S
Sort
Simplify and Shine
Standardize
Sustain
 Safety

Security

Satisfaction
 Kaizen Just-In-Time

Continuous improvement

Incremental changes

Poka-Yoke (Mistake proofing /Fool

proofing)
Logistics
Distribution
 Design options for a distribution network

➔ Manufacturer storage with direct shipping

➔ Manufacturer storage with direct shipping and in-
transit merge
➔ Distributor storage with carrier delivery

➔ Distributor storage with last-mile delivery

➔ Manufacturer/distributor storage with customer pickup

➔ Retail storage with customer
pickup
Manufacturer Storage with Direct Shipping
Manufacturer Storage with Direct Shipping
and In-Transit Merge
Cross Docking?
Distributor Storage with Carrier Delivery
Distributor Storage with Last-Mile Delivery
Manufacturer or Distributor Storage with
Customer Pickup
Retail Storage with Customer Pickup
Factories

Storage by Retailer

Customers
Other important concepts
Bullwhip Effect
Critical path
Start of project End of project

B Critical Path

F
Theory of Constraints

Process B is the constraint here

MRP? DRP? ERP?
 MRP BOM???

DRP
Business Model
Business Model Canvas