SCM Final

What is OSCM

(operations and supply chain management)- the design, operation, and improvement of the systems that create and deliver the firms primary products and services

what does OSCM do

concerned with the management of the entire product production or service delivery system

OSCM processes

planning, sourcing, making, delivering, returning

planning

processes needed to operate an existing supply chain strategically

sourcing

selection of suppliers that will deliver the goods and services needed to create the firm's product. a set of pricing, delivery, payments, and partner relationship metrics needed

making

producing the major product or providing the service

delivery

logistics processes such as selecting carriers, coordinating the movement of goods and information, and collecting payments from customers

returning

processes for receiving worn-out, defective, and excess products back from customers

efficiency

doing something at the lowest possible cost

effective

doing the right things to create the most value for the customer

value

the attractiveness of a product relative to its price

benchmarking

a process in which one company studies the processes of another company to identify best practices

why is benchmarking important

from an OSCM perspective, the relative cost of providing a good service is closely related to earnings growth

evolution of OSCM

- JIT inventory
- Lean: eliminate waste (opposite of TQM)
- business process reengineering- six sigma (dpmo)
- e-commerce
- business analytics

big issues with supply chain today

- how you manage the entire chain and how you manage what you show people of the entire chain
- how do you optimize the network
- management of global supply chain since the pandemic

sustainability

the ability to meet current resource needs without compromising the ability of future generations to meet their needs

shareholders

individuals or companies that legally own one or more shares of stock in the company

stakeholders

individuals or organizations who are directly or indirectly influences by the actions of the firm

triple bottom line

- economic prosperity
- environmental stewardship
- social responsibility

competitive dimensions

- cost or price
- quality
- delivery speed
- delivery reliability
- coping with changes in demand
- flexibility and new-product introduction speed
- other product-specific criteria (technical assistance, meeting launch dates, after-sale support, environmental impact, etc.)

straddling

seeking to match a successful competitor by adding features, services, or technology to existing activities (often a risky strategy)

activity-system maps

diagrams that show how a company's strategy is delivered through a set of supporting activities

supply chain risk

the likelihood of a disruption that would impact the ability of a company to continuously supply products or services

supply coordinated risks are associated with

day to day management of the supply chain

disruption risks are

caused by natural or manmade disasters

risk management framework

1. identify the sources of potential disruption
- highly situation-dependent
- focus should be on highly unlikely events
2. assess the potential impact of the risk
- goal is to quantify the probability and impact
3. develop plans to mitigate the risk
- detailed strategy for minimizing the impact of the risk

supply chain risk matrix

different supply chain strategies are exposed to specific types of risk- the supply chain risk matrix shows the level and type of risk for various strategies

productivity

a common measure of how well resources are used
= outputs/inputs
relative metric

decoupling points

when inventory is positioned in the supply chain to allow processes or entities to operate independently-- forecasts of demand at these decoupling points allow inventory to be set to the proper level

types of forecasting

- qualitative
- quantitative
- time series analysis
- causal relationships
- simulation

time series analysis

based on the idea that data relating to past demand can be used to predict future demand (using the past to predict the future)

short term forecasting

less than three months, used mainly for tactical decisions (ex. replenishing inventory)

medium term forecasting

three months to two years, used to develop a strategy which will be implemented over the next six to eighteen months

long term forecasting

greater than two years, useful for detecting general trends and identifying major turning points

choosing an appropriate forecasting model depends upon

- time horizon to forecast
- data availability
- accuracy required
- size of forecasting budget
- availability of qualified personnel
other factors that may also be considered:
- degree of flexibility
- consequence of a bad forecast

simple moving average

forecast is based on average demand over the most recent periods, useful when demand is not growing or declining rapidly and no seasonality is present, removes some of the random fluctuations from the data, selecting the period length is important (last three months of demand and dividing by three for example, but does not consider seasonality)

weighted moving average

allows unequal weighting of prior time periods, the weights must be equal to one

time series elements

trend, seasonal, cyclical, autocorrelation, and random

forecast errors

the difference between forecast value and what actually occurred, all forecasts contain some level of error

sources of error

bias- when a consistent mistake is made
random- errors that are not explained by the model being used

measure of error

- mean absolute deviation (MAD)
- mean absolute percent error (MAPE)
- tracking signal

causal relationship forecasting

uses independent variables other than time to predict future demand (this independent variable must be a leading indicator)

many apparently causal relationships...

are actually just correlated events- care must be taken when selecting causal variables

qualitative forecasting techniques

market research, panel consensus, historical analogy, delphi method

capacity

the ability to hold, receive, store, or accommodate. in business, viewed as the amount of output that a system is capable of achieving over a specific period of time

strategic capacity planning

finding the overall capacity level of capital-intensive resources to best support the firm's long-term strategy

economies of scale

the idea that as a plant gets larger and volume increases, the average cost per unit drops

diseconomies of scale

at some point, the plant becomes too large and average cost per unit begins to increase

best operating level

the level of capacity for which process was designed and defined as a volume of output at which average unit cost is minimized

decision tree

a schematic model of the sequence of steps in a problem- including the conditions and consequences of each step

decision tee components

decision nodes- represented with squares
decision events- represented with circles
branches- links between nodes, show the choices available to the decision maker

utilization is measured by

the portion of time servers are busy

low rates of utilizations

appropriate when the degree of uncertainty (in demand) is high and/ or the stakes are highj

higher rates of utilization

possible for predictable services or those without extensive customer contact

over ___% of all businesses sell services

80%

the ideal utilization for a human is ___%

70%

the ideal utilization for a machine is ___%

100%

what is a project

a series of related jobs, usually directed toward some major output and requiring a significant period of time to perform

project management

planning, directing, and controlling resources (people, equipment, and material) to meet the technical, cost, and time constraints of a project

why is project management important?

at the highest levels of an organization, management often involves juggling a portfolio of projects

pure project

a self contained team works full time on the project

functional project

responsibility for the project lies within one functional division of the firm. Employees from that division work on the project, usually only part timem

matrix project

a blend of pure and functional project structures- people from different functional areas work on the project, possibly only part time

a project always starts with a...

statement of work (SOW)

statement of work

- a written description of the objectives to be achieved
- a brief statement of work to be done
- proposed schedule

task

a further subdivision of a project- usually not longer than several months and performed by a single group or organization

work package

a group of activities combined to be assignable to a single organizational unitpr

project milestone

specific events in the life of the project to be reached at points in time

work breakdown structure (WBS)

defines the hierarchy of project tasks, subtasks, and work packagesa

activities

defined within the context of the work breakdown and are pieces of work that consume time

gantt chart

shows in a graphical manner the amount of time involved and the sequence of activities (often referred to as a bar chart)

critical path

the path taking the longest time through this network of activities

critical path method (CPM)

1. identify each activity to be done and estimate how long it will take to complete it
2. determine the required sequence of activities and construct a network diagram reflecting the precedence relationships
3. determine the critical path
4. determine the early start/ finish and late start/ finish schedule

slack time

the time that an activity can be delayed without delaying the entire project-- the difference between the late and early start times of an activity

when activity times vary, a single time estimate may not be reliable, instead, estimate three values:

- optimistic time
- pessimistic time
- most likely time

time-cost model

extension of the critical path models that considers the trade-offs between the time requires to complete an activity and the cost

project crashing

the compression of time to complete project

lead time

the time needed to respond to a customer order

customer order decoupling point

where inventory is positioned to allow entities in the supply chain to operate independently

lean manufacturing

a means of achieving high levels of customer service with minimal inventory investment

production process are

used to make any manufactured item

production processes steps

1. source the parts needed
2. make the product
3. deliver the product

make to stock

a production environment where the customer is served "on-demand" from finished goods inventory

assemble to order

preassembled components, subassemblies, and modules are put together in response to a specific customer order

make to order

the product is built directly from raw materials and components in response to a specific customer order

engineer to order

firm works with the customer to design and then make the product

days of supply

a measure of the number of days of supply of an item (the inverse of inventory turn scaled to days)

production processes

- project
- workcenter (job shop)
- manufacturing cell
- assembly line
- continuous process

project layout

the product remains in a fixed location, equipment is moved to the product, may be developed by arranging materials according to their assembly priority

workcenter (job shop) layout

similar equipment or functions are grouped together, focused on a particular type of operation

manufacturing cell layout

a dedicated area where products that are similar in a processing requirements are produced, dedicated to a limited range of products

assembly line and continuous process

area where an item is produced through a fixed sequence of workstations, designed to achieve a specific production rate, converts raw materials into finished product in one continuous process

assembly line design

workstation cycle time, assembly line balancing, precedence relationship

workstation cycle time

a uniform time interval in which a moving conveyor passes a series of workstations-- also the time between successive units coming off the line

assembly line balancing

assigning all tasks to a series of workstations so that the required cycle time is met and idle time is minimized

precedence relationship

the order in which tasks must be performed in an assembly process

service package

the bundle of goods and services that is provided in some environment

service bundle consists of five features:

1. supporting facility
2. facilitating foods
3. information
4. explicit services
5. implicit services

services cannot be...

stored in inventory

in services ___ becomes the dominant issue

capacity