Professional Documents
Culture Documents
Operations Management
6th Edition
R. Dan Reid & Nada R. Sanders
Internal Functions
Processing, purchasing, planning, quality, shipping
Information Technology:
enablers include the Internet, Web, EDI, intranets and ex-
tranets, bar code scanners, and point-of-sales demand in-
formation
E-commerce and e-business:
uses internet and web to transact business
Business-to-business (B2B) E-commerce:
businesses selling to/buying from other businesses
Business-to-Consumer (B2C)
on-line businesses sell to individual consumers:
Advertising Revenue Model – Provides users w/information on ser-
vices & products; provides opportunity for suppliers to advertise
Subscription Revenue Model – Web site charges a subscription fee
for access to the site
Transaction Fee Model – Company receives a fee for executing a
transaction
Sales Revenue Model – A means of selling goods, information, or ser-
vice directly to customers
Affiliate Revenue Model – Companies receive a referral fee for direct-
ing business to an affiliate
Exchanges
Marketplace that focuses on spot requirements of large
firms in a single industry
Industry consortia
Industry-owned markets that enable buyers to purchase di-
rect inputs from a limited set of invited suppliers
Green supply
chain management
focuses on the
role of the supply
chain with regard
to its impact on
the environment.
Mary and Sue decide to open a bagel shop. Their first deci-
sion is whether they should make the bagels on-site or buy
the bagels from a local bakery. If they buy from the local
bakery they will need airtight containers at a fixed cost of
$1000 annually. They can buy the bagels for $0.40 each. If
they make the bagels in-house they will need a small
kitchen at a fixed cost of $15,000 annually. It will cost
them $0.15 per bagel to make. They believe they will sell
60,000 bagels.
Mary and Sue wants to know if they should make or buy the
bagels?
FCBuy + (VCBuy x Q) = FCMake + (VCMake x Q)
Q = 56,000 bagels
$1,000 + ($0.40 x Q) = $15,000 + ($0.15 x Q)
.40 - .15 = .25 .15 - .15= 0
$1000 + (.25 x 56,000) = $15,000
$1,000 + $14,000 = $15,000
Impact
attaining levels of productivity and competitiveness that are
not possible through normal supplier relationships; change
Intimacy
working relationship between two partners; trust
Vision
the mission or objectives of the partnership; commitment
Win-Win Factors in Partnership Relations
36
Crossdocking
Eliminates the storage (customer is known) and order-
picking functions of a distribution warehouse while still
performing the receiving and shipping functions.
4 types: Manufacturing, Distributor, Transportation, Re-
tail
Examples: Home Depot, Wal-Mart, FedEx
Crossdocking Implementation
Successes Reasons for Failure
Reduction in capital investment in Poor facility layout
facilities and equipment (less Internal IS not integrated
space) Low SC integration/collaboration
Reduction in inventory Noncompliance by SC members
Reduction in personnel require- Wrong products selected
ments Unreliable suppliers in terms of accu-
Reduction in order cycle time racy and on time deliveries
Reduction in product damage (re- Insufficient volume of activity
duced touches) Not understanding peak workload varia-
Reduction in freight costs tions
Measuring SC performance
Traditional measures: Additional measures:
Return on investment Customer service levels
Profitability Inventory turns
Market share Weeks of supply
Revenue growth Inventory obsolescence