Supply Chain Management Presentation for Operations Management

This PowerPoint presentation provides a comprehensive overview of supply chain management, aligned with the content in Heizer and Render's Operations Management textbook. The presentation outlines the strategic importance of the supply chain, discussing various strategies like many suppliers, few suppliers, vertical integration, and virtual companies. It delves into supply chain risk, ethics, and sustainability, emphasizing the need for ethical behavior and sustainability practices. Furthermore, it covers supply chain economics, make-or-buy decisions, outsourcing, and logistics management, including distribution systems and third-party logistics. The presentation also explores opportunities in an integrated supply chain, such as e-procurement and vendor-managed inventory, and concludes with a focus on measuring supply chain performance. Overall, the presentation aims to equip the audience with a thorough understanding of the key aspects of supply chain management.

11 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall
11 Supply-Chain
Management
PowerPoint presentation to accompany
Heizer and Render
Operations Management, 8e

11 - 2© 2011 Pearson Education, Inc. publishing as Prentice Hall
Outline
 The Supply Chain’s Strategic Importance
 Supply Chain Risk
 Ethics and Sustainability
 Supply-Chain Economics
 Make-or-Buy Decisions
 Outsourcing
 Supply-Chain Strategies
 Many Suppliers
 Few Suppliers
 Vertical Integration
 Joint Ventures
 Keiretsu Networks
 Virtual Companies

11 - 3© 2011 Pearson Education, Inc. publishing as Prentice Hall
Outline – Continued
 Managing the Supply Chain
 Issues in an Integrated Supply Chain
 Opportunities in an Integrated Supply Chain
 E-Procurement
 Online Catalogs
 Auctions
 RFQs
 Realtime Inventory Tracking
 Vendor Selection
 Vendor Evaluation
 Vendor Development
 Negotiations

11 - 4© 2011 Pearson Education, Inc. publishing as Prentice Hall
Outline – Continued
 Logistics Management
 Distribution Systems
 Third-Party Logistics
 Cost of Shipping Alternatives
 Security and JIT
 Measuring Supply-Chain Performance

11 - 5© 2011 Pearson Education, Inc. publishing as Prentice Hall
Learning Objectives
When you complete this chapter you should be able
to:
1. Explain the strategic importance of the supply chain
2. Identify six supply-chain strategies
3. Explain issues and opportunities in the supply chain
4. Describe the steps in vendor selection
5. Explain major issues in logistics management
6. Compute percent of assets committed to inventory
and inventory turnover

11 - 6© 2011 Pearson Education, Inc. publishing as Prentice Hall
Supply-Chain Management
The objective is to build a chain of
suppliers that focuses on maximizing
value to the ultimate customer

11 - 7© 2011 Pearson Education, Inc. publishing as Prentice Hall
The Supply Chain’s Strategic
Importance
Supply chain management is the integration
of the activities that procure materials and
services, transform them into intermediate
goods and final products, and deliver them
through a distribution system
Competition is no longer between
companies; it is between supply chains

11 - 8© 2011 Pearson Education, Inc. publishing as Prentice Hall
Supply Chain Management
1. Transportation vendors
2. Credit and cash transfers
3. Suppliers
4. Distributors
5. Accounts payable and receivable
6. Warehousing and inventory
7. Order fulfillment
8. Sharing customer, forecasting, and
production information
Important activities include determining

11 - 9© 2011 Pearson Education, Inc. publishing as Prentice Hall
A Supply Chain for Beer
Figure 11.1

11 - 10© 2011 Pearson Education, Inc. publishing as Prentice Hall
How Supply Chain Decisions
Impact Strategy
Low-Cost Strategy Response Strategy Differentiation
Strategy
Supplier’s
goal
Supply demand at
lowest possible
cost (e.g.,
Emerson
Electric, Taco
Bell)
Respond quickly to
changing
requirements and
demand to
minimize
stockouts (e.g.,
Dell Computers)
Share market
research; jointly
develop products
and options (e.g.,
Benetton)
Primary
selection
criteria
Select primarily for
cost
Select primarily for
capacity, speed,
and flexibility
Select primarily for
product
development
skills
Table 11.1

11 - 11© 2011 Pearson Education, Inc. publishing as Prentice Hall
How Supply Chain Decisions
Impact Strategy
Low-Cost Strategy Response Strategy Differentiation
Strategy
Process
charact-
eristics
Maintain high
average
utilization
Invest in excess
capacity and
flexible processes
Modular processes
that lend
themselves to
mass
customization
Inventory
charact-
eristics
Minimize inventory
throughout the
chain to hold
down cost
Develop responsive
system with
buffer stocks
positioned to
ensure supply
Minimize inventory
in the chain to
avoid
obsolescence
Table 11.1

11 - 12© 2011 Pearson Education, Inc. publishing as Prentice Hall
How Supply Chain Decisions
Impact Strategy
Low-Cost Strategy Response Strategy Differentiation
Strategy
Lead-time
charact-
eristics
Shorten lead time
as long as it does
not increase
costs
Invest aggressively
to reduce
production lead
time
Invest aggressively
to reduce
development lead
time
Product-
design
charact-
eristics
Maximize
performance and
minimize costs
Use product
designs that lead
to low setup time
and rapid
production ramp-
up
Use modular
design to
postpone
product
differentiation as
long as possible
Table 11.1