MS 491 - Fall 2023 - Slides Mid Term

Planning and
Control Systems
SC 461
Hassaan Tariq
School of Management Sciences
Fall 2023
Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 1

Introduction - Supply Chain
Networks

Supply Chain Definition
• A supply chain is a focus on the core activities within our organisation
required to convert raw materials or component parts through to
finished products or services. We look upstream to our suppliers and
their supply of raw materials or components into our own
organisations supply chain.

Generic Supply Chain Schematic

Main aim of Supply Chain Management
• To balance Demand and Supply
• Maximize value from People, process and system
Key stages in Supply Chain Management

1. Logistics
2. Operations
3. Marketing and Sales
4. Services
3 key Strategies to achieve Competitive
Advantage
• Cost Leadership
• Differentiation
• Response

Supply Chain Networks
• Amazon
• Toyota Motors
• Daraz
• Q-commerce Companies

Supply
Chain
Processes –
Cycle View

Manufacturing Strategies / Order Fulfillment Responses in SCs
• Engineer-to-Order (ETO). With this approach, products are designed and built according to customer
specifications. This approach is frequently used for large-scale construction projects, custom
homebuilding, home remodeling, and for products made in job shops. The fulfillment time can be
relatively lengthy because of the nature of the project, as well as the presence of other jobs ahead of the
new one.
• Make-to-Order (MTO). With this approach, a standard product design is used, but production of the final
product is linked to the final customer’s specifications. This approach is used by aircraft manufacturers
such as Boeing. Fulfillment time is generally less than with ETO fulfillment, but still fairly long.
• Assemble-to-Order (ATO). With this approach, products are assembled to customer specifications from a
stock of standard and modular components. Computer manufacturers such as Dell operate using this
approach. Fulfillment times are fairly short, often a week or less.
• Make-to-Stock (MTS). With this approach, production is based on a forecast, and products are sold to
the customer from finished goods stock. This approach is used in department stores and supermarkets.
The order fulfillment time is immediate. A variation of this is e-commerce; although goods have already
been produced, there is a lag in fulfillment to allow for shipping.
Push vs Pull
View in Supply
Chain - MTS

Push vs Pull in
SC - MTO

Supply Chain Macro-Processes in a Firm
• 1. Customer Relationship Management (CRM): All processes at the
interface between the firm and its customers
• 2. Internal Supply Chain Management (ISCM): All processes that are
internal to the firm
• 3. Supplier Relationship Management (SRM): All processes at the
interface between the firm and its suppliers

Current Supply Chain Scenario and
Reasons!
• Disruptions  Due to ????????????????????
• Suez Canal – COVID – Global Wars –
• Bull Whip Effect
• Impact on Pakistan?????
• Is CPEC a Game Changer?????

Supply Chain
Risks

Cycle View
of Supply
Chain
Processes

Push/Pull
view of
SCM

Manufacturing Strategies and De-Coupling Points – SCM Perspective

Supply Chain Macro-Processes

What’s a Responsive SC
• Respond to wide ranges of quantities demanded
• Meet short lead times
• Handle a large variety of products
• Build highly innovative products
• Meet a high service level
• Handle supply uncertainty

Drivers of SC
Performance
22
Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491
Efficient vs Responsive SC

Risk Mitigation through Resilience and Agility
• Agility  Agility is the firm and supply chain's willing-ness and ability
to make immediate process level changes based upon the
understanding and reaction to externalities.
• Application: Quickly reacting or responding to changing demand or

supply conditions
• Example: Ability to rapidly locate alternative suppliers or retool for
different products

4 Characteristics of Agile SCM
Market Sensitive – Read Process Integration– Integrate
Market and Understand Process with Suppliers / NPD
Demands / Direct Access to
POS – Demand Driven
Network Based– Based on Virtual – No Boundaries / IT /

Supplier and Distributors / IS
Collaboration and Relationship
Management Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 25
Resilient Supply Chains
• Definition: the amount of disturbance that can be sustained by a firm
or supply chain before a change in its control and structure occur.
• Application: Persisting (in the short term), adapting (in the midterm),
and transforming (in the long term)
• Example: Maintaining the current supplier network can be desirable

in the short term, but fundamentally transforming it can be desirable
in the long term.

Building Resilient Supply Chains
Strategies
for Building
Resilient SCs
27
Building Resilient SCs
28
Supply Chain Flows
• Amazon
• Toyota
• Daraz
• Coke
• Apple

Procurement – SC Strategies and
Trade terms
Chapter 2,3 & 4

Traditional
Procurement

E-Procurement

Advantages of E-Procurement
Time Savings Cost Savings Accuracy Real Time
Ease of
Mobility Trackability Business for Management
Suppliers

Hascol, Toyota, Suzuki
Motors Pakistan!
What had they done!
34
Make or Buy
The Decision
to Source or Backward Vertical Integration
Out-Source
or In-House
Forward Vertical Integration
Near Sourcing, Off-Shoring , Re-

Shoring
35
Cost Saving  Economies of Scale
Insufficient Capacity  Sub-Contracting

Reasons for
Buying/Outsourcin Lack of Expertise
g
Quality
Geographical Advantage

Protect innovative Technology
No competent Supplier
Reasons to Better Quality Control
Make Using idle Capacity  Capacity Cushion
Control of Lead Time, Transportation Cost and

Warehousing Cost
Lower Cost  If right resources are available

Essential Criteria’s for Supplier Selection
• Process and Product Technologies
• Willingness to share technologies and Information  Early Supplier
Involvement
• Quality
• Cost
• Reliability
• Ordering System and Cycle Time
• Capacity
• Communication
• Location
• Service
Reasons for Choosing a Single Supplier
• Good Working relationships

• Less Variable Quality
• Lower Cost
• Transportation Economies  Truck Load (TL) OR Less than Truck Load
(LTL)
• Proprietary Product
• If dealing with less volumes
• ESI and Privacy

Reasons to Choose Multiple Suppliers
• Capacity Enhancement
• Less Risk of Supply Disruptions
• Creates Inter-Supplier Competition
• Information
• Social Sustainability  Promotion of women lead business, Social
Sustainability

Centralized vs De-Centralized Purchasing
Advantages of Centralized Purchasing
• Concentration of Purchase Volume  Quantity Discounts

• Avoid Duplication
• Specialization
• Lower Transport Costs
• No Competition within units
• Common Supply Base
Hassaan Tariq, SMGs, GIKI, Fall 2023, MS 491, SCM 41

Advantages of De-Centralized Purchasing
Closer
knowledge of the Local Sourcing Less Bereaucracy
requirements

Key Clauses in International Purchasing Contracts
• Product  International Standards , like ASTM

• Quantity  Units
• Delivery  Time, Schedule, FOB $ , Location, Carriage Cost
• Price  FOB $,
• Payment Terms
• Transfer of Ownership “Seller and buyer agree that owner ship of the
contract goods will pas to the buyer upon payment of the price to the
seller”
• Insurance  CIF (Cost, Insurance and Freight)
• Government Requirements
• Dispute Resolution  ICC (International Court of Dispute Resolution)
• Applicable Laws  (CISG Contract of Intl. Sales of Goods states to
Domiciled Laws) Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 43
International
Commercial
Terms Rules
44
Logistics and Transportation
Management

Logistics Basics Content
• Logistics  Definition
• Modes of Logistics Air , Sea, Ship, Road  Advantages and
Disadvantages
• Inbound/Internal/Outbound
• Last Mile Logistics
• 3PL vs 4PL
• Risks in Logistics

Modes of Transportation
• Air
• • Package carriers
• • Truck
• • Rail
• • Water
• • Pipeline
• • Intermodal  More than one mode of Logistics is used

3PL vs 4PL

Logistics and Transportation Problems
• Watch the Videos provided.
• In-Class Assignment
• 1. Travelling Sales Man Problem – Nearest Neighbour

• 2. Distance Optimization using 2-Opt Heuristics
• 3. Vehicle Routing Problem – Using Capacitated Loads
• 4. Optimization using Sweep – Load Heuristics

Travelling Salesman Problem – Nearest Neighbor

Optimization of Travelling Salesman Problem – 2 Opt Heuristics

Vehicle Routing Problem – Capacitated Loads

Optimizing Vehicle Routing Problem – Sweep Load Heuristics

Clark Wright Saving Algorithm - VRP

Advanced Forecasting & Demand
Management
Chapter 5

• What is Forecasting??? E.g. Apple Iphone 4 – 600,000/ Pre-Orders
• Airbus delivered 29 planes out of the 202 ordered – A380
• Types of Forecasts?
• Where to Forecast and Where Not?
• Demand, Independent vs Dependent Demand?

• Demand Management in Pakistan?
• Ultimate aim of Supply Chain is to Balance Demand and Supply!

• Forecast A statement about the future value of a variable of
interest. Demand can be a variable.
• Long Term and Short Term Forecasting
• Famous Saying  Forecasting is In-Accurate
• Good Forecasting should be accurate, timely, reliable, meaningful

units, cost-effective and simple to use & understand.
Forecasting in different Business Environments
• Accounting. New product/process cost estimates, profit projections, cash
management.
• Finance. Equipment/equipment replacement needs, timing and amount of
funding/borrowing needs.
• Human resources. Hiring activities, including recruitment, interviewing, and
training; layoff planning, including outplacement counseling.
• Marketing. Pricing and promotion, e-business strategies, global
competition strategies.
• MIS. New/revised information systems, internet services.
• Operations. Schedules, capacity planning, work assignments and
workloads, inventory planning, make-or-buy decisions, outsourcing, project
management.
• Product/service design. Revision of current features, design of new
products or services. Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 58
Benefits of Forecast
• Reduced Inventories
• Reduced Stockout
• Smooth Production plans
• Reduced Cost
• Improved Customer Service levels
• Demand Forecasting is done at various levels in Supply Chains!

Suppliers Buyers  Consumers ; Invetory Forms and Where forecasting is
Required
Companies understanding about
Forecasting
• To make forecast more reliable and accurate, a company must be
knowledgeable about the following factors.
• Past Demand
• Lead time of Product Replenishment
• Planned Advertising or Marketing Efforts
• Planned price and Discounts
• State of the Economy
• Actions that Competitors have taken

Steps in a Forecasting Process
• Determine the purpose of the forecast

• Establish a time horizon
• Obtain, clean, and analyze appropriate data
• Select a forecasting technique
• Make the forecast
• Monitor the forecast errors
Mandatory Reading.
https://hbr.org/1971/07/how-to-choose-the-right-forecasting-technique
2 Main types of Forecasting
• Qualitative  Qualitative techniques permit inclusion of soft
information (e.g., human factors, personal opinions, hunches) in the
forecasting process. Those factors are often omitted or downplayed
when quantitative techniques are used because they are difficult or
impossible to quantify
• Quantitative  Quantitative methods involve either the projection of

historical data or the development of associative models that attempt
to utilize causal (explanatory) variables to make a forecast

Classification of Forecasting Techniques
• Judgmental forecasts rely on analysis of subjective inputs obtained from
various sources, such as consumer surveys, the sales staff, managers and
executives, and panels of experts. For New Industries!
• Time-series forecasts simply attempt to project past experience into the

future. These techniques use historical data with the assumption that
the future will be like the past.
• Associative models use equations that consist of one or more

explanatory variables that can be used to predict demand. For example,
demand for paint might be related to variables such as the price per
gallon and the amount spent on advertising, as well as to specific
characteristics of the paint (e.g., drying time, ease of cleanup).
Qualitative Methods
• Jury of Executive Opinion  Dominated Discussions by Top Mgt, e.g.

Fashion Trends
• Sales Forces Composite  Individual Biasis
• Delphi Method  Technology, Projects,
• Consumer Survey  Focused Groups as well

Machine Learning based Forecasting

Machine Learning Forecasting Methods
• ARIMA and S-ARIMA
• Artificial neural network
• Long short-term-memory-based neural network
• Random forest
• Generalized regression neural networks
• K-nearest neighbours regression
• Classification and regression trees (CART)
• Support vector regression
• Gaussian processes

ML vs Traditional Forecasting Results

Quantitative Methods – Traditional
Forecasting
• Time series forecasting is based on the assumption that the future is
an extension of the past; thus, historical data can be used to predict
future demand.
• Since these forecasts rely solely on past demand data, all quantitative
methods become less accurate as the forecast’s time horizon
increases.

Components/Behaviours of Time Series Method
• Trend A long-term upward or downward movement in data
• Seasonality Short-term regular variations related to the calendar or

time of day
• Cycle Wave like variations lasting more than one year
• Irregular variation Caused by unusual circumstances, not reflective of

typical behavior
• Random variations Residual variations after all other behaviors are

accounted for Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 69
Variations in Time Series

Averaging Techniques

Naïve Forecasting
• A forecast for any period that equals the previous period’s actual
value. 2 Methods. Reliability is low but Simple to understand. Not
much previous data required.

Simple Moving
Average
• Technique that
averages a number of
recent actual values,
updated as new values
become available.
•A moving average
forecast tends to
smooth and lag
changes in the data

MA 3 vs 5 Periods

• A weighted average is similar to a moving average,
except that it typically assigns more weight to the
most recent values in a time series.
Weighted
Moving
Average

Practice Question

Solution

Exponential Smoothing
• A weighted averaging method based on the previous forecast plus a
percentage of the forecast error.
• Next forecast = Previous forecast + α(Actual − Previous forecast)
• The closer α is to zero, the greater the smoothing

Numerical –Exponential Smoothing

Choosing Alpha – Exponential Smoothing
• Selecting a smoothing constant is basically a matter of judgment or
trial and error, using forecast errors to guide the decision.
• The goal is to select a smoothing constant that balances the benefits
of smoothing random variations with the benefits of responding to
real changes if and when they occur.
• Commonly used values of α range from .05 to .50.
• Low values of α are used when the underlying average tends to be
stable; higher values are used when the underlying average is
susceptible to change.

Trend based Forecasting
• Trend Line Forecasting
• Spear Man’s Co-Efficient

Trend-Line Equation

Trend Line Practice Question
83
Measuring Forecasting Accuracy
• Mean absolute deviation
(MAD) The average absolute
forecast error
• Mean squared error (MSE) The
average of squared forecast
errors.
• Mean absolute percent error
(MAPE) The average absolute
percent error.

Practice
Question
9.5

Complex Forecasting Numerals

Exponential Smoothing with Trend Adjustment

Numeral – Exponential Smoothing with Trend
Adjusted

Solution to the Numeral

Solution of the Numeral Continued

Solution of the Numeral - Continued

Solution of the Numeral – Continued

Determining Seasonal Index in
Forecasting

Calculating Seasonal Indices

Using Seasonal Indices for Forecasting

Using Seasonal
Indices with
Linear
Forecasting

Trend Line * Seasonal Index

Resource Planning Systems
Chapter 6

Resource Planning
• Resource planning is the process of determining the production
capacity required to meet demand.
• In the context of resource planning, capacity refers to the maximum

workload that an organization is capable of completing in a given
period of time.
• A discrepancy between an organization’s capacity and demand results

in an inefficiency, the aim of Resource planning is to minimize this
Discrepancy.
Approach towards Resource Planning
• Issues if Resource planning is not Carried??????
• Capacity is What???? Issues with High & Low Capacity!!!!!!
• Have a production plan to balance Capacity!!!

Manufacturing Operations & Planning Horizons!

Terminologies
• Aggregate production plan (APP) is a long-range materials plan. The
aggregate production plan sets the aggregate output rate, workforce
size, utilization and inventory and/or backlog levels for an entire
facility.
• Master production schedule (MPS) is a medium-range plan and is

more detailed than the aggregate production plan. It shows the
quantity and timing of the end items that will be produced.
• Material requirements planning (MRP) is a short-range materials

plan. MRP is the detailed planning process for component parts to
support the master production schedule.

Systems for Manufacturing Planning
• MRP 1  Material Requirement Planning
• MRP 2  Capacity planning Included
• ERP  Enterprise Resource Planning

• accounting/finance,
• sales and marketing,
• human capital management (HCM),
• customer relationship management (CRM),
• purchasing management,
• inventory management,
• distribution management, and
• quality management.
• DRP  Distribution Requirement Planning

SCM KPIs
– ERP for
Efficiency

Information flow in ERP for Cash to Cash
Cycle Time -
Flow of
Information in
ERP to
Calculate Cash
to Cash Cycle
Time

Aggregate Production Plan
• Aggregate production planning is a hierarchical planning process that translates
annual business plans and demand forecasts into a production plan for all products.
• Aggregate production plans are typically stated in terms of product families or

groups. A product family consists of different products that share similar
characteristics, components or manufacturing processes.
• The objective is to provide sufficient finished goods in each period to meet the sales
plan while meeting financial and production constraints.
• Costs relevant to the aggregate planning decision include inventory cost, setup cost,
machine operating cost, hiring cost, firing cost, training cost, overtime cost and costs
incurred for hiring part-time and temporary workers to meet peak demand.
• There are three basic production strategies that firms use for completing the
aggregate plan: (1) the chase strategy, (2) the level strategy and (3) the mixed
strategy.
Aggregate Production Plan - Example

The pure chase production strategy adjusts capacity to match
the demand pattern.
Chase Using this strategy, the firm will hire and lay off workers to
match its production rate to demand.
Production The pure chase strategy obviously has a negative motivational
Strategy impact on the workers, and it assumes that workers can be

hired and trained easily to perform the job. Best for ATO
(Assemble to Order) and Low Skilled employees.
In this strategy, the finished goods inventories always remain

constant but the workforce fluctuates in response to the
demand pattern.
Chase Production Strategy Example

Chase
Strategy -
Continued

Level Production Strategy
• A pure level production strategy relies on a constant output rate and
capacity while varying inventory and backlog levels to handle the
fluctuating demand pattern.
• Using this strategy, the firm keeps its workforce levels constant and
relies on fluctuating finished goods inventories and backlogs to meet
demand.
• Suitable for highly skilled labor.
• The firm allows finished goods inventories to accrue while cumulative
demand remains less than cumulative production
• This strategy works well for MTO,ATO, MTS, manufacturing firms,
which typically emphasize immediate delivery of off-the-shelf,
standard goods at relatively low prices. Firms whose trading partners
seek the lowest prices of stock items might select the level production
strategy Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 114
Level Production Strategy – Example

• Mixed production strategy that strives to
maintain a stable core workforce while using
other short-term means such as overtime, an
additional shift, subcontracting or the hiring of
part-time and temporary workers to manage
Hybrid/ short-term high demand.
Mixed
• Usually, these firms will then schedule
Production preventive maintenance, produce
Strategy complementary products that require similar
resources but different demand cycles, or
continue to produce the end items, holding
these as finished goods inventory during the off-
peak demand periods.

Master Production Schedule
• The master production schedule is a time-phased, detailed

disaggregation of the aggregate production plan, listing the exact end
items to be produced. It is more detailed than the aggregate
production plan.
• ATPs Available to Promise and PAB Projected Available Balance

MPS - Example

MPS example

Master Scheduling Grid

Dependent vs Independent Demand
• Dependent demand that is directly related to or derived from the
bill of material structure for other items or end products. Such
demands are therefore calculated and need not and should not be
forecast.
• Independent the demand for an item that is unrelated to the

demand for other items. Demand for finished goods, parts required
for destructive testing, and service parts requirements are examples
of independent demand.

Sample BOM – Bill of Materials
Bill of
Materials
(BOM)

BOM -
Schematic
Snow Shovel

Product Structure –
Diagram for Snow Shovel

Inputs and Outputs
for an MRP –
Materials
Requirement Planning

Basic MRP Record
Basic MRP
Record
Gross Requirement  Anticipated Future Use/Demand
Scheduled Receipts  Existing Orders for any item, is at the

beginning of that period/Manufactured Items
Projected Available Balance  How much is available in Inventory
Planned Order Release  Planned replenishment Orders/126

Replenishments that will be added to the system.
Capacity Management and
Planning in SCM
From Different Books – Use Slides for Preparation of this Topic – For Others book
only!

Capacity Management
• Can we do it? When is the Deadline? Can we do it now? How much?

Capacity Management
• The function of establishing, measuring, monitoring, and adjusting
limits or levels of capacity in order to execute all manufacturing
schedules (i.e., the production plan, master production schedule,
material requirements plan, and dispatch list). Capacity management
is executed at four levels:
• + Resource planning,
• + Rough-cut capacity planning,
• + Capacity requirements planning, and
• + Input/output control
• The overriding goal is to keep demand and supply in harmony by

ensuring that the network contains the right amount of capacity in
the right configuration to serve customers in a cost-effective manner
Capacity Planning
• The process of determining the amount of capacity required to

produce in the future. This process may be performed at an aggregate
or product-line level (resource requirements planning), at the master
scheduling level (rough-cut capacity planning), and at the material
requirements planning level ( capacity requirements planning).
• Capacity planning involves identifying required resources and

selecting methods of making capacity available when needed.

Capacity Control
• The process of measuring production output and comparing it with
the capacity plan, determining if the variance exceeds pre-established
limits, and taking corrective action to get back on plan if the limits are
exceeded.

Time
Horizon of
Capacity
Managemen
t

Resource Planning
• Part of the resource plan is

a long-range assessment of
capacity requirements at an
aggregate level. Given long-
range demand forecasts,
you need to ask about the
resources needed-including
plant, lab or, and
equipment-to create
enough supply to match
that demand one, two, or
even five years into the
future. E.g. Labor Hours,
Productivity Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 133
Ways for Capacity Growth
134
Rough Cut Capacity Planning (RCCP)
• The process of converting the master production schedule into

requirements for key resources, often including labor; machinery;
warehouse space; suppliers' capabilities; and, in some cases, money.
Comparison to available or demonstrated capacity is usually done for
each key resource. This comparison assists the master scheduler in
establishing a feasible master production schedule

RCCP

Capacity Requirements Planning (CRP)
• Capacity requirements planning (CRP) determines in detail the

amount of labor and machinery required to carry out production tasks
specified in the MRP, translating MRP orders (measured in units) into
hours of work for each work center in each time period.

Measuring Capacity
• Available Time  e.g. Machines Operating at 8hrs a Days, 5 Days a
Week, so we have 40 Hrs available)
• Design Capacity  The maximum output rate or service capacity an

operation, process, or facility is designed for. 100 Bottles/ Day
• Effective Capacity  Design capacity minus allowances such as

personal time, and preventive maintenance. 80 Bottles/Day
• Actual Output  Looking into Human Errors and product failures, the
actual output is less than Effective Capacity. 75 Bottles/Day

Measuring Capacity
• Utilization  Actual Time

a machine is being utilized.
• Efficiency  Output to
Input as percentage. Can
be in hours as well.
• Hours utilized/Hours Work Done

Measuring Capacity
• Rated Capacity 
Rated Capacity = Available Time x Utilization x Efficiency
Kanban Cards !
Just Talk – Self -
Reminder

Distribution Requirement Planning - DRP
• Distribution requirements planning (DRP) is a time-phased finished-

goods inventory replenishment plan in a distribution network.
Distribution requirements planning is a logical extension of the MRP
system, and its logic is analogous to MRP.
• Distribution requirements planning ties the physical distribution
system to the manufacturing planning and control system by
determining the aggregate time-phased net requirements of the
finished goods, and provides demand information for adjusting the
MPS.
• DRP is driven by customer demand of the finished goods. So DRP is
independent whereas MRP deals with Dependent Demand.
• Practice Example 6.3 from Page

Hassaan 188
Tariq, SMGs, of2023_MS_491
GIKI, Fall the Primary Book! 141
Capacity Utilization Chart

Excel Assessment – 10%
• Forecasting
• MRP + MPS using Excel

Mid Term Pattern
• Time = 1 hr
• 30% MCQs
• 20% Short Questions
• 50% Numerical’s
• Quiz 1 + Quiz 2  MCQs  All the topics in these Slides
• Syllabus – All the Slides and Topics

• Use Books to Study and Practise. Rest the Office is open to clear ambiguities.

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Planning and

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 1

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 2

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• Maximize value from People, process and system

Key stages in Supply Chain Management

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• Is CPEC a Game Changer?????

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• Application: Quickly reacting or responding to changing demand or

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 24

Network Based– Based on Virtual – No Boundaries / IT /

• Example: Maintaining the current supplier network can be desirable

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 26

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Time Savings Cost Savings Accuracy Real Time

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 33

What had they done!

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491

Near Sourcing, Off-Shoring , Re-

Insufficient Capacity  Sub-Contracting

Hassaan Tariq, SMGs, GIKI, Fall 2023_MS_491 36

Reasons to Better Quality Control

Make Using idle Capacity  Capacity Cushion

Control of Lead Time, Transportation Cost and

Lower Cost  If right resources are available

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• Good Working relationships

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Advantages of Centralized Purchasing

• Concentration of Purchase Volume  Quantity Discounts

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• Product  International Standards , like ASTM

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• 1. Travelling Sales Man Problem – Nearest Neighbour

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• Demand, Independent vs Dependent Demand?