SCM 300 Module 6 Study Guide
SCM 300 Module 6 Study Guide SCM 300
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This 6 page Study Guide was uploaded by Nicolle Desmarais on Monday February 16, 2015. The Study Guide belongs to SCM 300 at Arizona State University taught by eduardo davila in Fall2014. Since its upload, it has received 391 views.
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Date Created: 02/16/15
SCM 300 MODULE 06 Study Packet Module 6 enotes 8592 104 in domino case study Module 06 SCM Integration PushPull JIT Postponement Bullwhip effect Integration risks With the basic supply chain ingredients in hand procurement logistics manufacturing this module looks to demonstrate the difficulties encountered when managers try integrating all of the supply chain pieces Push and Pull ideologies will be discussed as will the philosophy of JIT In addition a list of risks will be explored and potential strategic options will be considered Finally during lecture a series of examples about some of these options will be discussed 0 Recap of supply chain basics O O O 0 Focus on people good supply chain decisions positively impact customers employees and investors Competitive priorities good supply chains deliver the right mix of cost quality speed and flexibility to their target market Measuring success the best supply chains are effective efficient and adaptable Effective Creating and delivering great products and services customers want Efficient using minimal resources and eliminating waste Adaptable ready for change constantly evolving Maximize value Provide customers the best possible product and service bundle at the lowest possible cost and in the most convenient way possible Productivity maximize a company s high quality output using the fewest resources possible 0 Eight supply chain processes 0 O O 0 Product development and commercialization What does the customer want and when Can we organize the right suppliers manufacturers and distributors to get the job done Supplier relationship management finding suppliers Developing relationships Working together to improve quality Manufacturing flow management making the right items to meet customer expectations Doing this using the least amount of resources possible Demand management Utilize forecasting to understand likely demand Once a forecast is available manage the firm s facilities and resources to meet expected demand Order fulfillment If proper demand management has taken place then it will be time to fulfill orders This might include picking packing and shipping items to the customer Customer relationship management Use info to better understand the desires of your customer today and in future Customer service management Communication between customers and the supply chain Providing tracking information product assistance and maintenance opportunities Returns management Dealing with reverse logistics issues such as damaged and unwanted products recalls the return of pallets to the distribution center Shrinkage calculation helps predict the amount of products that are needed at each stage of the supply chain to account for defects theft damage and other forms of loss 0 O 0 Order size required actual demandproportion of acceptable product per order Must be performed at every stage of the supply chain in an upstream direction retailer to supplier 3001002 3064 round up to 307 3071001 3101 round up to 311 311 units needed 0 Square root rule and calculation Risk Pooling O The quicker you can respond to customer needs is supply chain responsiveness 1 SCM 300 MODULE 06 Study Packet 0 Inv future inv presentsqrt WH futuresqrt WH present Ex inv future 6000sqrt 2 sqrt 4 4230 units 0 Importance of supply chain integration Integration is bringing together groups that were once separated in order to see improvements For supply chain it means bringing together supply chain partners Full supply chain integration means coordination and communication with the customer It is the only way to achieve effectiveness efficiency and adaptability Obstacles to Integration Poor communication an unwillingness to share andor lack of trust between supply chain partners 0 Bullwhip effect Where fairly stable demand results in a proliferation in the amount of inventory that is carried as one travels upstream in the supply chain Manufacturers have three levels of uncertainty distribution retail and consumer uncertainties Thus they need even more inventory This constant amplification of inventory from one supply chain level to the nest is the bullwhip effect c 4 Causes of the bullwhip effect caused by uncertainty 0 Order batching When companies place large infrequent orders quantity discounts o FonNard buying Result of suppliers offering sales buyers are motivated to buy large quanities based on price not demand Therefore demand is unknown 0 Rationing Suppliers may ration their inventory and send each of their customers only a fraction of their order This is due to low inventory May trigger negative behavior in the future 0 Shortage gaming Rationing can lead to shortage gaming If customers feel that the supplier wont be able to fulfill their needs again they will order a higher number of units This may cause suppliers to inflate their inventory levels 0 5 Methods for controlling the bullwhip effect Remedies are rooted in truth stability efficiency effectiveness and transparency 0 Every day low pricing EDLP Buyers are more likely to buy at levels closest to their true demand do not see advantage of buying in bulk 0 Vendor Management Inventory systems VMI These are systems where buyers share inventory info with the suppliers Suppliers in turn take on the responsibility of managing inventory levels for the buyer by placing delivering and sometimes even stock the buyer s shelves This benefits all parties 0 Information sharing between supply chain partners 0 Develop strong buyer supplier relationships that result in the sharing of supply chain responsibilities and even strategy and planning 0 Practice lean manufacturing across the supply chain Sound supply chain practices result in good products produced with minimal resources 0 Push system characteristics consumer demand is known and expected A supply chain will preemptively buy materials manufacture finished goods and even deliver them to a store or a picking and packing facility where consumers can buy them at a later date Inventory is pushed to consumer in anticipation of consumer demand High finished goods demand readily available for buyers Opportunities to take advantage of quantity discounts Enditems are standardized with little opportunity for customization Vulnerable to obsolescence of inventory high holding costs and poor demand forecasts that may result in stockouts or massive overstocks 0 Pull system characteristics Activated by consumer demand Supply chain will wait for order to be placed The consumer pulls inventory by communicating a specific desire to those in the supply chain Works well when products are innovated quickly or consumer s desires are not standardized Large raw materials inventory where inventory can be used for more than one output Steak or steak on a sandwich 0000 2 O O O SCM 300 MODULE 06 Study Packet High raw materials inventory End items are very likely offer a range of customization Vulnerable to sudden increases in demand poor forecasts that may result in poorly planned production systemsfacilities Postponement A system that combines push and pull pushing product elements that are considered standard and then allowing customers to pull product elements that can be customized Those product elements that are standard will be produced in advance and then final production will be delayed postponed until the consumer places an order that specifies the customized elements Subway Rocks and Water Analogy Add more water and you would be able to sail across the rocks in the ake This story represents how inventory can hide a company s weaknesses poor forecasting high defect rates unreliable suppliers theft etc A lean system would remove the rocks aka remove the problems Lean manufacturing 0 00000 000 0 High performance quality devoted to the customer fast anf flexible best products and service Consistent quality simplicity and reliability Quality at the source knowledgeable employees Continuous improvement Pokayoke mistake proofing Close supplier ties good relationships trust and information sharing reduce uncertainty which leads to fewer supply chain surprises Small lot sizes Standardized components and work methods Dedication to the workforce improve your workforce Using setupchangeover how long it takes to make a system produce a new item Keys to lean manufacturing above Also be sure to read all introductory sections Jazz Cascading Injuries etc Jazz Ensembles Jazz songs are skeletons the musicians put meat on those bones Greatest jazz ensembles are virtuoso instrumentalists people that master their instruments Must be a team player follow the beat and support the group Leaders must trust the other members to make necessary adjustments and listen to the impending changes Cascading Injuries Playing through injuries can lead to larger scale injuries and setbacks Small problems minor miscommunications and inconsistent workloads can result in a chain of reactions and problems Casual dining restaurant certain foods in restaurants are prepared before the customer even orders them The same is true for supply chains Some supply chains proactively begin manufacturing and delivering products to stores before customers even know they want them This is a push system Other supply chains wait for the order to be placed this is pull system Maximizing life How do you get done what needs to get done every day adapt to the unknown and also expand your horizons Companies need to satisfy customers today They cant waste time money or materials They need to continue to develop Aspire to be lean Lean systems focus on productivity and value an irresistible combination for any supply chain manager SCM Basics Slides 0203 0 Basic responsibilities of a supply chain meet customer demand contribute to profitability continuous improvements 0 Understand the following terms frontend backend upstream downstream o Upstream in the direction of the suppliers 0 Downstream in the direction of the customer 0 Backend out of sight to customers 0 Frontend visible to customer Push vs Pull Slides 0409 example used personal computer industry Dell vs sony What is a Push System What is a Pull System Are items made before or after they are ordered Tradeoffs involved in utilizing either a Push or Pull system 0 Push pros high inventories Shorter lead times Mistakes and defects tolerable Push cons high inventories Low customization flexibility Mistakes and defects tolerable Forecasting miscalculations can be costly Strengths and weaknesses of Push and Pull systems Pull system pros low inventories Demand driven system Flexible manufacturing possible Closer supplier ties are developed Pull cons low inventories Risky customer service rates Tougher sell Forecasting miscalculations can be costly 000000 00000000 Lean Manufacturing Assume Just In time JIT and Lean Manufacturing are the same Slides 1015 0 Differences between Old School American business philosophy and Lean Manufacturing philosophies l Sitth quot Merimquot Lean Manufacturing Push Fullll lnu entorjlI lllleosary High Elf Minimise Quality Control Defects Inspected ut Quality at the Source Supplier Relations Suppliers are Muersaries Suppliers are Partners SupplyCha in Silo liteLntality G39an COMMINHIHIIDH nmmtunieat inn Required Consumer liliarltet Company tlietates what Customerdiotates market will offer supply shaln must produm Business Practices Explain JlT Primary goals of JlT systems Essential elements of JlT Best is always best Best won t be best tu39norruw 0 Quality at the source Jidoka rather than wait till inspection make sure quality is build at every stage of the process 0 High performance quality must out perform push companies 0 Consistent quality perfection in every facet of supply chain is required every time Errors create huge problems and delays 0 Preventative maintenance scheduled during slow periods aid in reducing downtime due to errors JIT does not tolerate unplanned downtime 0 Continuous improvement required to maintain competitive advantage 0 Goals minimize inventories short lead times high quality 0 Why is traditional JIT such a good fit for Japan Why does JIT need to change for each location 0 Japan trusts one another and relies on others to help make the best result Supply Chain Strategy Tradeoffs Slides 1621 0 How are the drawings used in lecture helpful in understanding the tradeoffs of each strategy depicted 0 Understand how Time Flexibility Quality and Cost are traded in any supply chain strategy Understand how you can positively impact either Time Flexibility Quality or Cost in designingmanaging a supply chain Postponement Define Why can it be valuable Risks associated with postponement Relationship to push and pull systems Costs associated with implementing a postponement system Creating a Simple Study Guide Understand 3 items below in great detail Use lists A Push Systems Automated Speed MaketoStock B Pull Systems Skilled Labor High Performance MaketoOrder C LeanJIT Systems Mix of the two above Mostly Pull Possible Postponement Understand PushPuIJI T drawings in Slides These three lists can easily fit on one page Try to see logical connections between lists Supply Chain Challenges and Solutions Slides 2231 0 How can shrinkage and other operational shortcomings cause inefficiencies Be able to calculate the number of items required to account for losses throughout the supply chain Slides 2224 PROs and CONs of centralizing your warehouses Understand the squareroot rule calculation Be able to do problems using the square root formula Slides 2526 0 Bullwhip effect Defineexplain Causes How can it be minimized Understanding Module 06 These questions are intended to help you see if you understand how this module s topics all tie together 1 Try to think of items that would utilize a push system a pull system a JIT system What value does each system offer for the production of that item or service 2 What are some items in your home that could be made at least partially in a system that utilizes postponement Which portions of those items would you postpone 3 Think about how different restaurants utilize different strategies Try to see if you can think of a restaurant that utilizes push a restaurant that utilizes pull and one that uses JIT How about postponement Exam les What is the value of Concepts p each 85 88 8592 86 89 87 89 88 89 87 87 90 Terms and uniform W0rkStatiOn 91 Lists Loads 92 89 Univ of Pitt Med 104 Standardized 92 Ctr Components 90 Flexible Workforce 92 Automation 92 Panasonic 0 Largest electronic manufacturing company in the world Known for its efficiency in making products Had great ability to change product mix Best plant is Matsushita plant in saga on Japans southern island of Kyushu Have used what Saga has used and implemented these principles at five other locations Lean system Lean system Operations systems that maximize the value added by each of a company s activities by removing waste and delays from them JlT philosophy the belief that waste can be eliminated by cutting unnecessary capacity or inventory and removing nonvalue added activities in operations Kuwasaki plant in Nebraska periodically cuts its inventory to almost zero This exposes their problems and they assign each problem to a task force to improve After improvements are made inventories are permanently cut to the new level Close supplier ties because elean systems run on low inventory they must have a close relationship with their suppliers Having a close relationship with you suppliers is a win win for all parties You better understand inventory demands etc JlT 2 has the supplier come to the plant and take an active roll Bose used this Small lot sizes 0 Lot a quantity of items thata re processed together 0 Lean systems use lot sizes that are as small as possible 0 Reduce level of inventory 0 Pass through system faster Prevent over production Set upchangeover set up is what you do in order to prepare for a new process also known as a changeover Typically a set up takes the same time regardless of the lot size A single digit set yp is a set up of under 10 minutes Jidoka automatically stopping the process when a problem occurs and fixing the problems on the line itself as they occur instead of waiting to the end to fix it Pokayoke mistakeproofreading methods aimed at designing failsafe systems that minimize human error Toyota every vehicle being assembled is accompanied by an RFID chip containing info on how many nuts and bolts need to be tightened on that vehicle before for an operation at each given station A green light comes on when the right numbers of bolts have been tightened and only then does the vehicle move toward Uniform Workstation loads A leans ystem works well if the workload on individual workstations us relatively uniform After the pathology lab at Univ of Pittsburg went to a lean system from a batch and quenue system process samples dropped from days to just hours and people were diagnosed more quickly
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