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Chapter 14 Supply Chain Management
Chapter 14 Supply Chain Management
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Learning Outcomes
Communicator
Communicator of of customer
customer demand
demand
from
from point
point of
of sale
sale to
to supplier
supplier
Physical
Physical flow
flow process
process that
that engineers
engineers the
the
movement
movement ofof goods
goods
Benefits of Supply
Chain Management
Supply chain oriented companies
commonly report:
• Lower inventory, transportation,
warehousing, and packaging costs
• Greater supply chain flexibility
• Improved customer service
• Higher revenues
• Increased performance and profitability
Supply Chain Integration
Logistics is…
the process of strategically managing
the efficient flow and storage of raw
materials, in-process inventory, and
finished goods from point of origin to
point of consumption.
Logistical Components
of the Supply Chain
Sourcing
Sourcing&&Procurement
Procurement
System
InformationSystem Production
ProductionScheduling
Scheduling
LogisticsInformation
Supply Order
OrderProcessing
Processing
Chain
Team Inventory
InventoryControl
Control
Logistics
Warehouse
Warehouse&& Materials
MaterialsHandling
Handling
Transportation
Transportation
Sourcing and Procurement
The
The Role
Role of
of Purchasing:
Purchasing:
Develop specifications
Select suppliers
© iStockphoto.com/Maria Toutoudaki
Negotiate price and service levels
Reduce costs
Production Scheduling
Traditional Focus Customer Focus
Push / Pull
Push Pull
Strategy
Start of Inventory- Customer-Order
Production Based Based
JIT
JIT
A process that redefines and simplifies
manufacturing by reducing inventory levels
and delivering raw materials at the precise
time they are needed on the production line.
Benefits of JIT
Water
Pipelines
Motor Carriers
Railroads
Transportation Mode Choice
Cost
Transit time
Reliability
Capability
Accessibility
Traceability
Exhibit 14.1
Criteria for Ranking Modes
of Transportation
Trends in Supply Chain
Management
Advanced
Advanced computer
computer technology
technology
Outsourcing
Outsourcing of
of logistics
logistics functions
functions
Electronic
Electronic distribution
distribution
Advanced Computer
Technology
Automatic identification systems
- Bar coding
- Radio frequency technology
Communications technology
Reduce inventories