CIS Chapter 11
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This 4 page Class Notes was uploaded by Daria Trikolenko on Monday October 17, 2016. The Class Notes belongs to CIS 2010 at Georgia State University taught by Jim Senn in Fall 2016. Since its upload, it has received 6 views.
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Date Created: 10/17/16
Chapter 11. Supply Chain Supply Chain is the flow of materials, information, money, and services from raw materials suppliers, through factories and warehouses, to the end customers. Includes the organizations and processes that create and deliver products, information, and services to the end customers. Supply chain visibility refers to the ability of all organizations within a supply chain to access or view relevant data on purchased materials as these it moves through the production processes and transportation network t their receiving decks. Inventory velocity- how quick a company can deliver products/ services after receiving materials to make them. The vast improvement: transformation has real-time information on all products; chains rely less on labor-based tracking and monitoring. To utilize supply chain efficiency, a business must be tightly integrated with supplier; critical component: use of IS to facilitate the exchange of information among participants. The structure and participants Supply chain= how organizations are linked together. 1) Upstream – where sourcing or procurement from external suppliers occurs. -select suppliers to deliver goods; -develop the pricing, delivery, payment; -managing inventory, receiving and verifying shipment. 2) Internal – where packaging, assembly, or manufacturing. - schedule activities for production, testing, packaging prepare for delivery; - monitor quality levels, production output, worker productivity. 3) Downstream – where distribution takes place, frequently by external distributor. - coordinate the receipt of orders from customers - develop a network of warehouses; - select carries to deliver products; - implement invoicing system to receive payments. Bidirectional flow – (receive logistic) damaged or unwanted product can be returned. Tiers of suppliers – supplier may have one or more subsupplier, a subsupplier may have its own subsuppliers.. The flows in the supply chain 1) Material – physical products, raw materials, suppliers, include product life cycle. 2) Information – data related to demand, shipment, orders, returns, schedules. 3) Financial – money transfers, payments, credit card information and authorization. Supply chain management (SCM) – improve the processes a company uses to acquire the raw materials it needs to produce and deliver the product. 1) Plan –strategy for managing resources, involved in meeting customer demand. Involves monitoring of the supply chain to ensure that it’s efficient and delivers high quality for lowest cost. 2) Source – choose suppliers to deliver the goods. Develop pricing, delivery, payment process with suppliers; managing inventory, receiving and verifying shipment, transferring materials to manufacturing facilities. 3) Make – manufacturing component; activities for production, testing, packaging and preparation for delivery. 4) Deliver – logistics, coordinate the receipt of customer orders, develop a network of warehouses, carriers to transportation. 5) Returns – responsive and flexible network for receiving defective, returned or excess products back from customers. The goal of SCM – reduce the problems, or friction, along supply chain, reduce uncertainty and risks by decreasing inventory levels, and time while improving business process. Interorganizational informational system (IOS) – information flows among two or more organizations. IOS perform: - Reduce costs of routine business transactions; - Improve the quality of the information flow by reducing or eliminating errors; - Compress the cycle time involved in fulfilling business transactions; - Eliminate paper processing and its associated inefficiencies and costs; - Make the transfer and processing of information easier for users. Supply chain visibility ability of an organization to track products in transit from the manufacturer to their final destination, goal- to improve the supply chain by making data available to all parties. The push model vs. pull model. Push model – (make-to-stock), the production process begins with a forecast, which is simply an educated guess to customer demand, using mass production, and sells (pushes) these products to consumers. Pull model – (make-to-order), the production process begins with customer order, companies make only what customers want, a process closely aligned with mass customization. Problems along the supply chain Problems arise from: 1) Uncertainties- demand forecast, delivery times; 2) The need to coordinate multiple activities, internal units and business partners. Major challenge: bullwhip effect – refers to erratic shifts in orders up and down the supply chain. Variables that affect customer demand can become magnified when they are viewed through the eyes of managers at each link in the supply chain. Solutions to supply chain problems: Vertical integration- a business strategy in which a company purchases its upstream suppliers to ensure that its essential supplies are available as soon as the company needs them. Using inventories to solve supply chain problems: To minimize inventories: just-in-time (JIT) inventory system deliver the precise number of parts, called work-in-process inventory, to be assembled into a finished product at precisely the right time. Downside – company carry more inventory than they otherwise would, its shifts excess inventory from customers to suppliers. Information sharing – can be facilitated by electronic data interchange and extranets. Vendor- management inventory (VMI) – information sharing, occurs when the supplier, manages the entire inventory process for a particular product or group of products. Electronic data interchange (EDI) – communication standards that enable business partners to exchange the routine documents (purchasing order) electronically. It formats documents and transmit over the internet using convertor (translator). Benefits: - Minimize data entry errors; - Shortened the length of the message; - Messages are secured; - Reduce cycle time, increase productivity; - Enhances customer service; - Minimum paper usage/ storage. Extranets: - connect the intranets of business partners. Link business partners over the internet by providing access to certain areas of each other’s corporate intranets. Goal – to foster collaboration between / among business partners. Use visual private network to make communication more secure. It I s faster process and information flow. Major types of extranets: 1) Company and its dealers, customers, or suppliers. Centers on a single company, access a database. 2) An industry extranet – major players in an industry can team up to create an extranet that will benefit all of them. 3) Joint ventures and other business – partners in a joint venture use the extranets s a vehicle for communication and collaboration. Portals and exchanges: Types of corporate portals: - Procurement (sourcing) automate the business process involved in purchasing products between a single buyer and multiple suppliers. - Distribution portals – automate the business process involved in selling or distributing products from a single supplier to multiple buyers.
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