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SCM 301 Module 2

by: Sin Yong Tan

SCM 301 Module 2 SCM 301

Sin Yong Tan
GPA 3.92

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About this Document

Summary of chapter 6, 7 & 9! Chapter 9 is a very long chapter, this guide/summary will definitely save you A LOT of time :) Don't forget to download and print this off so you can have a quick peek/...
SCM 301
Dr. Amber Bellville
Study Guide
Supply Chain Management
50 ?




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This 5 page Study Guide was uploaded by Sin Yong Tan on Sunday January 17, 2016. The Study Guide belongs to SCM 301 at Iowa State University taught by Dr. Amber Bellville in Fall 2015. Since its upload, it has received 54 views. For similar materials see SCM 301 in Economcs at Iowa State University.


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Date Created: 01/17/16
Module 2 Chapter 6 – Resource Planning Systems (cont.)  Goal of resource planning - Balance output and capacity - 2 type planning: Material planning & Capacity planning  Aggregate scheduling goals - Optimal Combination of production rate, workforce, Inv. on hand - Meet demand, use cap efficiently, meet inv. policy, Minimize cost: labor, inv, PPE, subcon.  3 Range planning: Long (>1 yr.), intermediate (6~18 months) & short range (1 day ~ < 6 months)  Costs Relevant to aggregate planning - Labor (direct/indirect), Changing production rate (hire/fire/train), holding cost, backorder cost  Chase strategy  Chase strategy costs  Level Strategy  Master Scheduling - Determine amount & date of item to be produced  Material Requirements Planning (MRP) - Break fin good  material plan for components parts - Provide specific time & quantity of each part when needa be ordered/produced - Dependent demand drives MRP - Input: MPS , BOM, Inv. record - Output: MRP Explosion, Planned order, Order release notice, Chg due date, Cancellation/Suspension, Inv. status  Revise aggregate planning tree diagram SEQUENCE!  Bill of Materials - List of component needed - Parent & Children structure tree  Manufacturing Resources Planning (MRP II) : - Plan & monitor resources of a manufacturing firm (manufacture, market, finance, engr) - Stimulate manufacturing  ERP Systems (> MRP II) - Connect functional & operation of organization, and sometimes supplier & customer via software - Main purpose? : Share info + Minimizing supply chain inv. - Main ERP Provider: Microsoft, SAP, Oracle - Advantage: Visibility, Standardize process, Measure performance & communicate - Disadvantage: Complex, time & capital investment, need adapt process to meet ERP Chapter 7 – Inventory Management  4 type Inv. = Raw mat., WIP, Fin. Goods, Maintenance, Repair & Operating (MRO)  Inv. 2 function = Solve Uncertainty & break dependencies  Carrying Cost: Risk cost, storage space cost, Service cost, Capital/finance cost  Cycle counting: Frequent inv. counting  Objective of EOQ - Minimize Total Cost  Average inventory = Q/2 + SS  Simple EOQ model - Assumptions: i) Must know: demand, order cost, order lead time ( All must be constant ) ii) Whole order delivered at one time (Order 100 units = deliver 100 units) iii) No stockouts, discounts or limit on capital availability - Not so useful when: i) There are multiple locations ii) Demand not constant  TotalAnnual Inventory Cost (TAIC) formula  EOQ Formula  Price break example  Reorder Point  Periodic Review System - Fixed time (Exp: Order every 1 month)  Continuous Review System - Fixed quantity (Exp: Order 100 units everytime we order)  ABC Inv.:A= most valuable, rank according usage  Inventory Turnover Ratio = cost of goods sold / average aggregate inventory level - Faster/Higher = Better Chapter 9 – Warehousing and Transportation  Warehouse management - Basic movement: Receive  put-away  order picking  ship - Storage, Distributing center(rapid movement thru facility), cross-docking (receive  sort  ship) - Function:Accumulating(Build up quantity),Allocating(reduce quantity),Assorting(variety), Sorting(grade/quality) - Supply/product mixing, inbound/outbound logistic system  Public warehousing (3PL) - Limited capital investment + Flexibility - Variable cost  Private warehousing (Owned/Occupied for long term use) - Offers control - High Fixed cost - Always full, fully utilize (Assume, enough/high + stable demand)  Decentralized vs. Centralized warehousing: - Focus Difference in: 1) Product value 2) Customer service 3) Purchase size 4) Product line  Warehouse productivity measures - Unit or lb /day - Employee/lb moved - order filled - Productivity ratio: (pounds/day)/(labor hours/day) - Throughput: mat. moved thru the syst. in a time period  Overall trend - Add value, 3PL, Reduce labor, flexibility, warehouse + logistic info syst.  Transportation - Supplier/seller  Buyer/Customer at the right time & right place  Objective : - Maximize value thru negotiation - Make sure services are provided effectively - Satisfy customer needs  Cost: facility location + order management tech (stuff the truck to TL)  Mode: inv. & packaging requirement, mat. handling eq & loading dock design  Transport choice: customer service goal  Forms of Transportation - Common, Contract, Exempt, Private  Modes of transportation: 1. Motor/Truck: - easy access, fast transit but higher cost compare to rail & water, small size, weater - General freight carrier, Specialized carrier, Parcel carrier, (Passenger carrier?) - LTL: i) too large to handle manually, too small to fill truck ii) small car pick upline-haul to terminal near destinationsmall car deliver consignee/buyer receive. - TL: i) >10k lb to ard 40k lb (Low cost of entry for truck business) ii) Cheaper that LTL iii) No terminal iv) Shipper load, buyer unload 2. Railroad: Class 1, Shortline(Class 2), Regional(Class 3), Terminal - Long distance, large volume, high fixed cost, own “right-of way”, low accessibility, interlining - Premium intermodal service: TOFC, COFC, x2 stack, roadrailer 3. Air Cargo: Usually transport high value object - Fastest air transit, but highest rate & consider ground transit time - Cost structure highly variable, x own right of way(eg: x own the airport/plane) - High revenue per ton-mile - Low access, capability - VERY dependent on weather 4. Water Mode: - Low cost, long transit time, low accessibility - Transport huge objects (large minerals, forest product, wood log) - Easy entry and exit 5. Pipeline: Oil pipelines, not gas type - X suitable for general transportation - VERY low accessibility, own right of way, high fixed cost with low variable cost - MAJORADVANTAGE: LOW PRICE  Negotiate rate, classify productselect carrier & routeContract service & rate & volumeConsolidation(+volume to get lower price)Monitor serviceoptimize # of carrier  Bases of rates 1. Supply side: Cost of service - Distance, weight, easy/hard to load & unload, susceptibility to theft & dmg - Based on fixed/variable cost structure 2. Demand side: Value of service - Transportation competition - Product value  Rates by mode 1. Truck & Rail: - Rate determined by: Product, weight & cube, Distance, nodes(destination/origin) - Common rate: per-mile(TL), Flat, $/CWT(hundred weight - Spot rate(negotiate on the spot): carrier & shipper nego, % discount frm published rate 2. Ocean rate: - Usually 2 to 5 times higher than nego rates, always request detailed rate quotes  Carrier Reduction strategy 1. Advantage: - Build up lane density, more efficient - Better understanding - Easy manage fewer relationship - Reduce transaction cost 2. Disadvantage: - Too few carrier to handle business volume - Complacency (自满)  Carrier selection - Price, TRANSIT TIME & RELIABILITY , capability, accessibility, security  2 key doc: Bill of lading & Freight Bill(often have Outsourced Payment service)  Logistics Intermediaries - Custom Brokers - International or Foreign Freight Forwarder - Trading Companies (take title of goods) - Non-Vessel Operating Common Carrier(NVOCCs)  Foreign Trade Zones - No formal custom formalities, duty or bonds - Can store good indefinitely / re-exported - Used for manufacturing: ImportAssemblyship to another country : Importer pay duty when reach final destination Chapter 9 – Warehousing and Transportation  Understand 5 steps and definitions - Data gathering - Demand Planning - Supply Planning - Pre S& OP meeting: review D & S Planning & discuss issue + prepare real meeting - S & OP Meeting:Authorize plan/Approve recommendation + review key performance  Benefits: - Every1 on same pace - Constant update on production & financial & sales plan - + customer service & financial investment


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