sc exam 2
Terms
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- cycle time
- total elapsed time to complete a business process
- causes of poor supply chain cycle times
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waiting time
non-value added items
repeating process activities
lack of synchronization
lack of information and communication - results of reductions in sc cycle times
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reduced inventories
reduced costs
increased flexibility
improved deliveries
increased cash flow - lean approach
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system of managing processes which emphasizes the minimization of waste and the continuous improvement of process and quality
-a philosophy
-most of benefits of lean are in inventory control - JIT goals
- eliminate all sources of waste, continuous improvement
- pull system (kanban), JIT system
- system for moving work where a workstation pulls output from the preceding station as needed
- push system-traditional
- system for moving work where output is pushed to the next station as it is completed
- kanban production control system
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-japanese word for card
-paperless production control system
-authority to pull, or produce comes from a downstream process
-applies to pull systems - kaizen approach
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-continuous improvement by all
-total employee/mgmt imvolvement and commitment
-desire and ability of workers to spot quality problems, halt proudciton when necessary, generate ideas for imrprovement, analyze problems, perform several different functions - advantages/disadvantages of small lot sizes
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advantages
-reduces inventory
-increases product flexibility
disadvantages
-require frequent set ups
-may increase ordering costs - bullwhip effect
- small changes in consumer demand can result in large variations in orders placed upstream. eventually the network can oscillate in very large swings as each organization in the supply chain seeks to solve the problem from its own perspective
- when is JIT most appropriate
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widely applicable to all kinds of manufacturing and service businesses
works best when dealing with situations where demand is stable and predictable - why does JIT fail
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-lack of top mgmt commitment
-failure to understand the dedication and discipline and long time frames
-under-estimating the degree of worker and mgmt training needed
-worker resentment at the pressure for continuous improvement
-supplier resistance - techniques of inventory control
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economic order quantity
just in time
materials requirements planning
distribution requirements planning
vendor managed inventory
collaborative, planning, forecasting and replenishment - eoq dimensions
- independent demand, MFI/MTS, single facility, certainty, safety stock extensions handle uncertainty
- JIT dimensions
- pull, reduces uncertainty, dependent demand
- mrp dimensions
- uncertainty, multiple facilities, dependent demand
- mrp background
- inbound system, complex products with many components and varying lead times, schedule arrivals to minimize inventory and ensure smooth manufacturing
- DRP background
- outbound system, usually linked to MRP and MPS, starts with forecasts of customers' demand by SKU and works back to prudction schedule and then to materials requirements, assigns demand/order fulfillment to warehouses and plants
- drp dimensions
- MFI/MTS, multiple facilities, uncertainty
- vendor managed inventory
- based on customer pull data, uses preset EOQ, supplier manages its inventories in customer, individual customer orders not necessary
- vmi dimensions
- reduces uncertainty, independent demand, single/multiple facility, MFI
- collaboration, planning, forecasting and replenishment
- based on sku level store forecasts, forecasts based on supplier/buyer collaboration, individual customer orders not necessary, uses vmi for replenishment
- cpfr dimensions
- reduces uncertainty, independent demand, single/multiple facility, MFI or MTO
- make advantages
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-high degree of control
-ability to oversee entire process
-economies of scale - make disadvantages
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-reduces strategic flexibility
-requires high capital investment
-suppliers may offer superior products - buy advantages
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-high strategic flexibility
-requires low/no capital investment
-suppliers may offer technically superior products - buy disadvantages
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-loss of control
-choose a poor supplier
-could cost more
-integration issues
-loss of confidentiality - vertical integration
- a firm owns or controls most of its supply chain organizations
- virtual company strategy
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network of independent companies-linked by technology, each contributes core competencies, typically provide services
may be long or short term - few suppliers strategy
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-partnerships
-more consistent quality
-information sharing
-on-site audits and visits
-exclusive contracts
-low prices (large orders)
-frequent, small lots
-delivery to point of use - many suppliers strategy
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-competition among suppliers
-spread risk
-may be required (govt)
-little openness
-negotiated, sporadic PO's
-high prices
-infrequent, large lots
-delivery to receiving dock - keiretsu network strategy
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-affiliated chain
-system of mutual alliances and cross-ownership
-links manufacturers, suppliers, distributors, and lenders - objectives of purchasing function
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-support operation requirements for internal customers
-develop, evaluate, and determine the best supplier, price, and delivery for those products and services
-support organization goals and objectives
-develop integrated purchasing strategies