Supply Chain Management

Transcription

1 Operations Chapter 11 Supply Chain Opportunities in Supply Chain Entry level jobs average $1,000 per year more than Business Administration Majors Supply Chain Brain Global Supply Chain Issues React to sudden changes Parts availability Distribution or shipping channels Import duties Currency rates Use of technology for schedule and management of shipments Parts in Product out Staff facilities with special knowledge Political issues Freight Duties or taxes Customs (product flow) Coordinating a Global System Materials management (includes logistics): Achieve lowest possible cost that meets customer s needs. Power of Just-in-Time : Economize on inventory holding costs. Drawback: no buffer inventory. 1-1 CGBP Certified Global Business Professional Industry certification NASBITE Global Trade (Practices) Spring Semester- MWF 1 a.m. Exam date June 1, 008 U.S. Department of Commerce now requires CGBP as part of training program. The Role of the Organization Organizational linkages are more numerous and complex. More difficult to control costs. Functionally separate materials management: Equal weight with other departments. Purchasing, production and distribution are one basic task: controlling material flow from to customer. purchase 1

2 Materials Materials : the activity that controls the transmission of physical materials through the value chain, from procurement through production and into distribution. Logistics: the procurement and and physical transmission of material through the supply chain, from suppliers to customers. Scheduling Credit flow Supply chain flow Order & cash flow Ideas for customer satisfaction Market research data Design data Material flow Throughput from raw materials to consumer sale Make vs. Buy Make or Buy Outsourcing (buying) Inadequate capacity Inventory reduction Reciprocity Resources better utilized on critical or core competencies In-House (making) Lower production costs Protect intellectual property Quality maintained Unsuitable suppliers Core competency Advantages of Make: Lower costs. Facilitating specialized investments. Proprietary product production technology protection. Improved scheduling. Advantages of Buy: Strategic flexibility. Lower costs. Offsets. Cost factors biggest determinant Supply Chain Strategies Success issues Many Suppliers Vertical Integration Few Suppliers Virtual (network) Keiretsu Goal agreement Trust Compatible cultures Extended family member 11 1

3 Supply chain complications Local optimization Incentives Sales Quantity discounts Quotas Promotions Large lots Bullwhip Effect Suppliers, manufacturers, sales people, and customers have their own, often incomplete, understanding of what real demand is. Each group has control over only a part of the supply chain, but each group can influence the entire chain by ordering too much or too little. Each group is influenced by decisions that others are making Reducing the Bullwhip Effect Better information In addition to cycle time reductions throughout the supply chain, Hau Lee, V. Padmanabhan, and Seungjin Whang recommend the following actions: Focus on end-user demand through point-of-sale (POS) data collection, electronic data interchange (EDI), and vendormanaged inventories (VMI) to reduce distortions in downstream communication. Work with vendors to create smaller order increments and reduce order batching. ASN Pull Data Replenishment controls Opportunities Postponement Drop Shipping Channel Assembly Blanket order Standardization Maintain stable prices for products. Allocate demand among customers based on past orders, not present orders to reduce hoarding behavior when shortages occur. EDI Reduce lot sizes VMI 1 1 International Freight Vendors Phoenix International Evaluate alternatives Develop Training Engineering Production capabilities Information transfer Negotiate Cost-based Market-based Competitive bidding Combination 17 18

4 Logistics The Panama Canal Truck Rail Air Over 1,000 ships transit the Canal each year, hauling an estimated % of the world's goods around the globe. Has implemented a $1billion improvement program to maintain the Canal and keep it competitive. Water Pipeline The program includes the widening of the narrow Gaillard Cut allowing two-way traffic for even the largest ships and increasing Canal capacity. Canal currently at 9% capacity, by 007 expected to be capacity constrained 19 0 CONTIGUOUS RAILROAD & PORT PROPERTIES Panama Canal Expansion Majority of new vessel orders exceed limitations of the Canal Need to build third Set of Locks Referendum vote scheduled for Oct, 00 US$ to 8 billion project 8 10 years to build Project parallels Railroad PCRC owns private dock for material and equipment handling PCRC already in discussions regarding large movement of materials and supplies. 1 Current and Proposed Capacity T R A I N O P E R A T I O N E A C H T E R M I N A L C A P A CI T Y PHASE DS TRAIN SETS -ENGINE LOCO SETS RAIL SIDINGS 000 FT LOADING TRACK LIFT EQUIPMENT TRUCKS DAILY ANNUAL TODAY ,000 II ,000 III ,000 IV FUTURE UNLIMITED TRIPLE TRACK 10 UNLIMITED ,09,000 TO BE DETERMINED * Capacity shown in number of containers

5 Performance Issues Administrative costs Lead time Time requirement- order placement Frequency of late delivery Level of non-conforming materials/parts Frequency / level of shortages Global Business Competence CGBP The NASBITE CGBP provides a benchmark for competency in global commerce. The CGBP designation demonstrates an individual's ability to conduct global business including Global Business, Global Marketing, Supply Chain, and Trade Finance. For candidates experienced in international trade, the certification confirms that knowledge. For candidates just beginning, it establishes a professional development goal to ensure a full understanding of the profession. For companies, it assures that employees are able to practice global business at the professional level required in today's competitive environment. The role of NASBITE is to facilitate and coordinate the certification process, not to provide training for the certification exam. Instead, academic, private, non-profit, and NGOs involved in international trade education and training will provide these services. Global Trade Practices Course offered at UNI Spring a.m. MWF Preparation for exam date June 1, 008 Life certification by NASBITE Global Trade Practices is designed to prepare individuals to understand and address the complications associated with business operations in today's global economy. Focused on trade transactions and logistical knowledge, participants gain exposure to the terminology and challenges of managers operating in the global arena. This course will require that you integrate the knowledge gained through your business core courses of management, marketing, accounting, and finance, focusing on the issues associated with managing global business operations. The course provides the depth of knowledge necessary for students who may be interested in sitting for the Certified Global Business Professional (CGBP) certification exam offered by North American Small Business International Trade Educators (NASBITE), a non-profit organization of educators, trainers, and practitioners in the field of international trade. (See ) This certification provides credibility to individuals interested in any job that may be global in nature, including Global Business, Global Marketing, Supply Chain, and Trade Finance. Any student with an interest in international business will find this course a worthwhile investment of time. 7