Supply Chain

Additional Slides
 Approaches to Capacity Expansion
• Recall Last week lecture.
Common Demand Patterns

Stevenson
 Capacity Plans
• a. Level Capacity Plan- Ignore the fluctuations and keep the activity
levels constant.
• b. Chase Demand Plan- Adjust capacity to reflect fluctuations in
demand. (HR, Overtime , Outsource , Process, Equipment)
• c. Demand Management – Attempt to change demand to fit capacity
availability. (Long Lead time, Price Rise)
a b
 Managing Demand
Demand Exceeds Capacity
• Increase Price
• Long lead times
• Enhance your Capacity

Capacity Exceeds Demand

• Stimulate the markets
• Product Changes
 Definition

• Supply chain management is the integration of activities that procure

materials and services, transform them into intermediate goods and final
products, and deliver them to customers.

• The key components of Supply chain are

• Transportation Vendors
• Credit and Cash transfers
• Suppliers
• Distributors
• Accounts payable and Receivables
• Warehouse and Inventory
• Order fulfillment
• Forecasting
 Introduction

e.g. LEAR Corporation, U.K.

8
 Risks in Supply Chain
• Processes ( Raw Materials, Component Availability, Quality, Logistics)

• Controls ( Management Metrics, Secure Communications, Product

design, logistics scheduling)

• Environment ( Duties, Tariffs, Security, Natural disaster, Terrorism,

Political unstability)
BOM (Bill of Materials)