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Click to edit Master title style,Click to edit Master text styles,Second Level,Third Level,Fourth Level,Fifth Level,Production and OperationsManagement:,Manufacturing and Services,PowerPoint Presentation for Chapter 12,Managing the Supply Chain,Chase,Aquilano,Jacobs,Eighth Edition,Irwin/McGraw-Hill,The McGraw-Hill Companies, Inc., 1998,2,Chapter 12,Managing the Supply Chain,Supply Chain Management,Outsourcing,Value Density,Purchasing,The Firm as Supplier,JIT Purchasing,Global Purchasing,3,Supply Chain Management,Apply a,total systems,approach to managing the entire flow of,information,materials,and services,Raw,material,suppliers,Factories &,warehouses,End,customer,4,Outsourcing,Purchased items account for 60 to 70% of the cost of goods sold.,Outsourcing allows firms to focus on their core competencies.,Organizations outsource when they decide to purchase something they had been making in-house.,Typically handled by materials management function.,5,Make or Buy,Current trend favors outsourcing all activities that do not directly represent or support core competencies.,Are there any dangers associated with aggressive outsourcing? What are the implications for JIT production?,6,Value Density,Value per unit of weight,Why is it important to know value per unit of weight? Is high value density good or bad?,7,Purchasing,No longer just order takers.,Purchasing need to,know,material,performance,availability,suppliers,8,The Firm as a Supplier,In this chapter, we discuss the role of the firm as a buyer of goods and services.,How does the perspective change when the shoe is on the other foot?,9,Partnership Relationship,Continuing relationship involving,a commitment over an extended time period,an exchange of information, and,an acknowledgement of the risks & rewards of the relationship.,10,Supplier Selection Using the Analytical Hierarchy Process (AHP),Process used to determine weights for supplier-selection criteria.,AHP allows individuals to use their own personal psychometric scale for making pair-wise comparisons between criteria used to evaluate suppliers.,Consistency measures can be calculated as a cross-check to determine how well the scale is being followed.,11,JIT Purchasing-Requirements,Reduced lot sizes,Frequent and reliable delivery schedules,Reduced and highly reliable lead times,Consistently high quality levels for purchased materials,12,JIT Purchasing-,Suppliers,Fewer, nearby suppliers,Repeat business,Support suppliers competitiveness,Clusters of remote suppliers,Limit competitive bidding to new parts,Resist vertical integration,Encourage suppliers to implement JIT purchasing,13,JIT Purchasing-,Quantities,Steady output rate (a desirable prerequisite),Frequent deliveries in small lot quantities,Long-term contract agreements with minimal release paperwork,Deliver quantities variable from release to release but fixed for whole contract term,14,JIT Purchasing-,Quantities (,Ctd,),Little or no permissible overage or underage of receipts,Suppliers encouraged to package in exact quantities,Suppliers encouraged to reduce their production lot sizes (or store unreleased material),15,JIT Purchasing-,Quality,Minimal product specifications imposed on supplier,Help suppliers to meet quality requirements,Close relationships between buyers and suppliers quality assurance people,Suppliers encouraged to use process control charts instead of lot sampling inspection,16,JIT Purchasing-,Shipping,Scheduling of inbound freight,Gain control by use of,company-owned or contract shipping,contract warehousing,trailers for freight consolidation/storage,17,JIT Purchasing-,Benefits,Consistent quality,Savings on resources,Lower costs,Special attention,Saving on tooling,Loyalty associated with long-term relationships with suppliers,18,Global Sourcing,Original strategy was to reduce production costs.,Changing focus of global purchasing includes,product availability,technology,delivery,lead times,labor availability and quality.,19,Electronic Information Flow,Electronic Data Interchange (EDI),Quick Response (QR),Efficient Consumer Response (ECR),
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