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CSU / Management / MGT 301 / csu supply chain management

csu supply chain management

csu supply chain management

Description

School: Colorado State University
Department: Management
Course: Supply Chain Management
Professor: Vanderspeck
Term: Summer 2015
Tags:
Cost: Free
Name: MGT 301, Weeks 1-4 notes
Description: These notes cover everything that is on Exam 1
Uploaded: 02/14/2017
13 Pages 412 Views 2 Unlocks
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What happens if capacity cannot match demand?




What is Supply Chain?




What is Supply Chain Management?



MGT 301 Sec 008 Supply Chain Management  Professor: Paul Vanderspeck  Email: Paul.Vanderspeck@Business.colostate.edu Office Hours: Rockwell 216, MW 1:30-3 by appointment and open door stop  by  Textbook: Introduction to Supply Chain, MGT 301, Colorado State University, Give and Take  Monday 11-23-17 What is Supply Chain Management? Benefits of good Supply ChainDon't forget about the age old question of intertrial variability
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Don't forget about the age old question of amit saini unr
Don't forget about the age old question of What are the nerve fibers connecting the two brain hemispheres?
We also discuss several other topics like What is hypothesis in economic theory?
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: ∙ AMR Research – Survey of top supply chain management firms:  According to the report, top companies: - Carry 15 percent less inventory (This is beneficial because you will have less money tied up in inventory and storage for the  inventory, which means more liquid assets) - Has 60 percent faster to market (How quickly can they  respond to rises in demand)  - Complete 17 percent more perfect orders than their  competitors - 60 percent shorter cash cycle   Days of inventory + Days of Accounts Receivable –  Days of Accounts Payable  - 50 percent faster growing in sales  Paula – Commodity Manager, Dairy Starbucks ∙ Responsibilities  - Sourcing/managing dairy suppliers - Forecasting/budgeting  - Establishing strategic plans for commodity  ∙ Background  - Grew up on dairy farm - BA in Business Econ., and MA in Ag. Econ  - Regulator – 6 years’ w/ Dept. of Ag - CPM – Certified Purchasing Manager  ∙ Salary – 150K  Starbucks Supply Chain ∙ Coffee suppliers will send coffee to roasters - They source for coffee grounds rather than owning it  themselves. They do this because they would have to own  land from all over the world and it would make things very  complicated, and they also do not specialize in coffee  growing. ∙ The roasters will send coffee to Starbucks distribution center (they also get other supplies like cups, milk, etc.)  - They own their own roasting facilities because they want  constancy across all Starbucks stores, they don’t want people  to steal their roasting technique, and they get a huge  economy of scale (price per amount drops as quantity  increases)  ∙ Distribution center gives Starbucks stores supplies  Vertical vs. Horizontally Integrated  ∙ Horizontally integrated – When you outsource to get supplies (Coffee  suppliers)  ∙ Vertically Integrated – When they own a portion of their supply chain  (Roasters)  - The trend is more towards horizontal integration.  What is Supply Chain? ∙ A supply chain consists of the flow of products and services from: - Raw materials and manufacturers - Component and intermediate manufactures - Final product manufacturers  - Wholesalers and distributers and - Retailers - To end customers  ∙ … Connected by transportation and storage activities integrated  through information, planning and integration activities.  ∙ Raw materials suppliers (Tier 2 supplier)  Intermediate component  manufacturers (Tier 1 supplier)  Focal firm  Wholesalers, distributers  (Tier 1 customer)  Retailers (Tier 2 customers) End customers  ∙ Almost 1/3 of the us economy comes from manufacturing  Importance of Supply Chain Management ∙ Who benefits most? Firms with:  - Large inventories  - Large number of suppliers - Complex products  - Customers with large purchasing budgets ∙ Ford used to almost be completely vertically integrated, now they  outsource most things used to build their cars.  Wednesday 1-25-17 Driving Shareholder Value with Your Supply Chain∙ Think about yourself as an investment the company made on you ∙ Each activity in a process should add value to the preceding activities;  waste and unnecessary cost should be eliminated.  Operations Strategy – Think about aligning everything with one another  Corporate Strategy ∙ Provides an overall direction that serves as the framework for carrying  out all the organizations functions  - Environmental Scanning  - Core Competencies - Core Processes - Global Strategies  Market Analysis ∙ Understand what the customers want and how to provide it  - Market Segmentation - Needs Assessment  ∙ Best in class companies manage 40% more supply chain configurations than typical in their industry Competitive Priorities and Capabilities  ∙ Competitive Priorities – The critical dimensions that a process or supply chain must possess to satisfy its internal or external customers, both  now and in the future  ∙ Competitive Capabilities – The cost, quality, time, and flexibility  dimensions that a process or supply chain actually possesses and is  able to deliver  Order Winners and Qualifiers  ∙ Order Winners – A criterion customers use to differentiate the services  or products of one firm from those of another  ∙ Order Qualifiers – Minimum level required from a set of criteria for a  firm to do business in a particular market segment.  Production and Inventory Strategies and Uncertainty  ∙ E-T-O (Engineer to order) - Complete customization that will take a long time to build will  be very expensive, an example would be a house  ∙ M-T-O (Make/Manufacture to order) - You get to pick your lot and the layout of your home between  some options, and maybe get to customize some parts like  how many garage bays, where the master bedroom is, etc.  ∙ A-T-O (Assemble to order) - A cheaper option that you can still slightly customize such as  counter tops, carpet/hardwood, color, etc.  ∙ M-T-S (Make/Manufacture to stock  - No customization, buying the house as is.  Market Orientation and Uncertainty  ∙ Fifth Orientation – Mass Customization  - Achieving both Economy of scale and economy of scope  - Postponement – Delaying differentiation - Have lead time and cost of MTS with customization of MTO Manufacturing Process Layout (External Process Environment) ∙ Product Layout  - Continuous  - Repetitive  ∙ Process Layout  - Intermittent ∙ Project Layout  Monday 1-30-17 An Overview of Service Operations ∙ Services cannot be inventoried ∙ Services are often unique. Insurance policies, legal services ∙ Services have high customer-service orientation. Services today are  finding ways to automate or standardize services.  ∙ Services are decentralized. Because of their inability to inventory and  transport service products.  Chase Strategy ∙ Match capacity to demand in each time period. Ex: A doctor’s office.  What happens if capacity cannot match demand?  Level Strategy ∙ Can use inventory to allow for constant production with fluctuating  demand. What happens if we run out of inventory?  Process Structure in Services ∙ Customer contact - - The extent to which the customer is present, is actively  involved, and receives personal attention during the service  process  ∙ Customization - - Service level ranging from highly customized to standardized  ∙ Process Divergence - - The extent to which the process is highly customized with  considerable latitude as to how its tasks are preformed.  ∙ Flow -- How the work progresses through the sequence of steps in a  process.  Strategic Implications ∙ Efficient supply chains  - Build-to-stock ∙ Responsive Supply Chains  - Assemble-to-order - Make-to-order - Engineer-to-order Functional Products - Characteristics  ∙ Low cost, low profit margin, low life cycle, lower forecast variability,  staple items, limited product options and variety Innovative Products – Characteristics  ∙ High cost, high profit margin, short life cycle, high forecast variability,  fashion terms, many product options and variety, seasonal demand. A  good example is some toys that come out at the same time as movies,  like Rouge One characters.  Matching Supply Chain to Product ∙ Functional – Since physical costs are so important, what kind of supply  chain should you use for a functional item?  ∙ Innovative – Since market mediation costs are so important, what kind  of supply chain should you use for an innovative team? Customer Involvement ∙ Advantages - Increased net value to customer - Better quality, faster delivery, greater flexibility, lower cost - Reduction in product, shipping, and inventory costs - Coordination across the supply chain  ∙ Disadvantages  - Can be disruptive  - Managing timing and volume can be challenging  - Quality measurement can be difficult  - Requires interpersonal skills - Multiple locations may be necessary  Sourcing Decisions – The Make-or-Buy Decision ∙ BUY – Horizontal Integration  ∙ Outsourcing – Refers to buying materials and components from  suppliers instead of making them in house. The trend has moved  toward outsourcing. Wednesday 2-1-17 Traditional Mass Production ∙ Goal is lowest unit cost  ∙ Large batch sizes ∙ Push method of material flow  - Make the amount that is efficient and “push” it down the  supply chain ∙ Quality often seen as a secondary to efficiency ∙ Fragmented “silo” production What is “Lean”?  ∙ Lean is a systematic approach to identifying and eliminating waste or  non-value added activity in business processes ∙ Value added - Any activity that increases market form or function of  the product - Things that the customer is willing to pay for  ∙ Non-Value added  What is Waste? ∙ Inventory (excess) – A supply of items held by the firm to meet  demand  - Symptoms – Excess storage and handling, high disposal costs, extra rework.  - Causes – Poor quality, unbalanced workload, poor suppliers ∙ Overproduction – Processing more units than are necessary  - Symptoms – Extra inventory, excess floor space for storage,  high utility costs - Causes – Complexity, long set up times, poor forecast ∙ Defects - Waste due to unnecessary scrap and rework - Symptoms – Rework, scrap, repairs, customer returns, impact  to brand identity.  - Causes – Poor process controls, poor training, don’t  understand customer requirements.  ∙ Waiting – Resources wasted waiting for work  - Symptoms – Underutilizing resources, low productivity, large  waiting rooms - Causes – Unbalanced workload, long set up times, poor layout ∙ Over-processing – Excessive or unnecessary operations  - Symptoms – Extra equipment, long lead times, poor  productivity- Causes – Just in case logic, lack of communication, redundant  approvals and inspections.  ∙ Unnecessary movement – Unnecessary motion. Excessive activity - Symptoms – Long walking distances, excess handling, waiting - Causes – Poor layout, poor organization ∙ Unnecessary transportation – Moving an input without changing its  characteristics  - Symptoms – Extra handling equipment, large storage areas,  overstaffing, product damage.  - Causes – Poor layout, poor organization, un-level schedules.  ∙ Underutilized people –  Characteristics of Lean Systems ∙ Pull method of materials flow - Customer or system signals production  ∙ Quality at the source  - Poka yoke – Mistake proofing  ∙ Small lot sizes (batch)  - Ultimate goal is a batch size of one  ∙ Uniform workstation loads - Takt time  ∙ Preventative Maintenance  - Low inventory increases importance of reliability  ∙ Close supplier ties  - Frequent, small deliveries  ∙ Flexible workforce  ∙ Line flows ∙ Automated production ∙ Standardized components and work methods  One Piece Flow ∙ One Piece Flow requires the ability to change from one part/SKU to  another quickly (setup) - SMED – Single Minute Exchange of Dies (Change from one  part to another in less than 10 minutes, also known as single digit setup).  ∙ Long setups from one product another inspire large batches  Monday 2-6-17 Quality, Statistical Process Control, and Six Sigma The Effects of Poor Quality:  ∙ If one sets an acceptable quality level of 99 percent, the results are:  - More than 30,000 newborn babies accidently dropped by  doctors/nurses each year;  - Unsafe drinking water almost four days each year- No electricity, water, heat or phone service for about 15  minutes each day  The Origins of Six Sigma Quality ∙ Six Sigma -  - Near quality perfection (the statistical likelihood of non defects 99.99966% of the time  - Pioneered by Motorola in 1987 - A statistics-based decision-making framework designed to  make significant improvements in value-adding processes  Impact of Quality Improvement – Simple View Tools and Techniques for Total Quality Management ∙ The key to good quality is good management  ∙ In order to create the change, management need to train people in the tools and techniques to improve quality  7 Basic TQM Tools ∙ Pareto Principle – 80% of wealth is controlled by 20% of people. A small number of causes (20%) is responsible for a large portion (80%) of the  effect.  ∙ Flow Chart (or value stream maps)  ∙ Cause and Effect Diagrams  ∙ Checklists ∙ Histograms ∙ Scatter Diagrams  ∙ Control Charts (SPC) – Statistical Process Control  Two Types of Variation ∙ Common Cause Variation – It is due to the process itself. The errors are  unassignable, chance, random, or common causes.  - Ex: Driving to work, some days take longer- Process capability determined by inherit common causes of  variation (Ex: poor hiring and training, stress, management  style, poor product design)  - Unless a change is made in the process by management, the  process’s capability will remain the same.  ∙ Special or Assignable Cause Variation – Is due to events external to the usual functioning.  - Ex: Driving to work, and construction starts on I-25 - Change the operator, producers, new type of raw materials  and breakages  - Uncontrolled variation leads to high costs and unknown  quality – It also makes it impossible to evaluate any attempts  to improve a system.  The Quality Gurus ∙ W. Edwards Deming  - “Failure of top management to manage”  ∙ Joseph Juran  - Build quality at the source  ∙ Philip Crosby  - “Quality management leads to savings which pays for itself,  thus ‘Quality is free’.  ∙ Genichi Taguchi  - The cost of quality is not good part = free or bad part = costly. There is a spectrum of Quality costs  Wednesday 2-8-17 Facility Location Decisions ∙ Why is facility location so important?  ∙ Facility location has a long term impact on the supply chain & must be  part of the firm’s strategy.  - Facility location must be a part of the firms supply chain  strategy  - Companies can locate anywhere in the world due to increased globalization, technology, transportation, & open markets.  Location Strategies ∙ Offshore Factory – low cost investment and labor costs ∙ Source factory – plant management involved in supplier selection and  production planning.  ∙ Server factory  ∙ Contributor factory  ∙ Outpost factory  ∙ Lead factory  Critical Location Factors∙ Competitiveness of Nations – Degree to which a country produces  goods & services which meet the needs of international markets, while  maintaining or expanding personal real income over time. Made up of  323 criteria, grouped into 4 factors:  - Economic performance - Government efficiency - Business efficiency - Infrastructure  ∙ Government and tax incentives  ∙ Foreign trade zones where materials are imported duty-free as long as  the imports are used as inputs to production of goods.  ∙ Environmental issues:  - Global warming, air pollution, & acid rain are debated  ∙ Labor issues:  - Labor availability, productivity and skill - Unemployment and underemployment rates  ∙ Access to supplies:  ∙ Utility Availability & cost  ∙ Overall quality of life:  ∙ Land availability & costs Factory Location Models ∙ The weighted-factor rating model – Look at certain locations that you  are considering, you weight each factor for each country, then add all  them up and take the weighted average.  ∙ Break-Even Model – Useful location analysis technique when fixed &  variable costs can be determined. Involves the following: - Identify locations to be considered  - Determined fixed cost of land, materials, utilities, and  transportation costs.  - Construct total cost lines - Determine the break even points on the graph  - Identify the range over which each location has the lower  cost.  ∙ The Center of Gravity Model - Involves mapping all of the market  locations on an x, y-coordinate grid and then finding a central location  that is closest to the markets with the highest demand.  Monday 2-13-17 Material for Exam 2 Exam Information  ∙ Watch the two videos before the exam!!! ∙ Study guide online  ∙ Posted homework solutions  Law and EthicsThe Law of Agency ∙ Purchasing Agent – Your employee is called the principle. You are  making deals on other people’s behalf. You are required by law to act in the best interest of your employer.  Purchasing Ethics ∙ Fiduciary duty – the highest standard of care.  ∙ Acting as an agent:  - What is required by law - What’s your company’s policy  - What’s your own standard What Happens if you Violate your Fiduciary Responsibility? ∙ Lose your job ∙ Maybe criminal sanctions  Elements of Contract Law  ∙ Offer – A proposal by one person that he/she is willing to do something  for certain terms  - An RFQ is not an offer ∙ Acceptance – Contract does not exist until the offer is formally  accepted  - Meeting of the minds  ∙ Consideration – A form of mutual obligation  Contract Law ∙ Essential elements of a contract  - Offer, acceptance, consideration  ∙ Competent parties/mutual assent  - Principle of qualified agent  - Own free will - Willingness to enter into agreement and be bound by terms  - No fraudulent  ∙ Legal subject matter ∙ Breach of contract – Any failure to preform of the terms of the contract  (Ex: quantity mistakes, something is late, quality failure, payment,  etc.) Types of Damages Allowed  ∙ Restitution – Money the plaintiff actually paid to the defendant  ∙ Reliance – Money the plaintiff lost because he/she relied on  defendant’s commitment to contractual obligations  ∙ Expectancy – Money the plaintiff was hoping to gain from the contracts Example of Damages ∙ I run a hardware store and just ordered 10,000 hammers from a  supplier.  ∙ I buy them for $9 per hammer∙ I am going to sell them at $11 per hammer – (11-9) * 10,000 =  $20,000 in lost profit, Expectancy ∙ I spent $20,000 on a down payment - Restitution ∙ They are nice hammers, so I spent $5000 dollars on a display case –  Reliance Legal and Ethical Key contract terms ∙ Price – most important part ∙ FOB - Origin - Destination  ∙ Severability – “If any part of this contract is illegal, the rest of the  contract still remains enforced”  ∙ Force Majeure – “If due to war/terrorism/acts of God, you cannot be  sued for breach of contract”  ∙ Patent Indemnification -  ∙ Assignment –  Acceptance or Rejection of Goods  ∙ Acceptance – “I view the goods that the supplier sent me as adequate  and I and going to use them.” The supplier can assume you accept the  goods after a certain amount of time.

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