Nature and Scope

TR PANDEY

Nature and Scope of SCM
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Purchasing Logistics Warehousing Expediting

Purchasing
1.Purchasing Interfaces: Operating Units Accounting Design and Engineering Receiving 2.Purchasing Cycle Receiving Requisition Selection of Supplier Order Placement Monitoring Orders and Receiving Orders

3. Value Analysis 4.Outsourcing 5. JIT Purchasing 6. Suppliers Choosing Suppliers Evaluating Sources of Supply (Vendor Evaluation) Supplier Audits Supplier Certification Supplier Partnerships

Logistics
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Movement within a Facility Incoming and Outgoing Shipments Evaluation of Shipping Alternatives Logistics Innovation

Warehousing and Expediting
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Bar Coding EDI Distribution Requirements Planning JIT Deliveries

Push/Pull View of Supply Chains
Procurement, Manufacturing and Replenishment cycles
Customer Order Cycle

PUSH PROCESSES

PULL PROCESSES

Customer Order Arrives
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Supply Chain Management Key Issues
ISSUE Network Planning CONSIDERATIONS
‡ Warehouse locations and capacities ‡ Plant locations and production levels ‡ Transportation flows between facilities to minimize cost and time ‡ How should inventory be managed? ‡ Why does inventory fluctuate and what strategies minimize this? ‡ Impact of volume discount and revenue sharing ‡ Pricing strategies to reduce order-shipment variability ‡ Selection of distribution strategies (e.g., direct ship vs. cross-docking) ‡ How many cross-dock points are needed? ‡ Cost/Benefits of different strategies ‡ ‡ ‡ ‡ How can integration with partners be achieved? What level of integration is best? What information and processes can be shared? What partnerships should be implemented and in which situations?

Inventory Control Supply Contracts Distribution Strategies

Integration and Strategic Partnering

Outsourcing & Procurement Strategies Product Design

‡ What are our core supply chain capabilities and which are not? ‡ Does our product design mandate different outsourcing approaches? ‡ Risk management ‡ How are inventory holding and transportation costs affected by product design? ‡ How does product design enable mass customization?

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Supply Chain Management Operations Strategies

STRATEGY Make to Stock

WHEN TO CHOOSE
standardized products, relatively predictable demand customized products, many variations many variations on finished product; infrequent demand

BENEFITS
Low manufacturing costs; meet customer demands quickly Customization; reduced inventory; improved service levels Low inventory levels; wide range of product offerings; simplified planning Enables response to specific customer requirements

Make to Order

Configure to Order

Engineer to Order

complex products, unique customer specifications

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