supply chain

Supply Chain Management

The management of processes and relationships in a supply chain, integrating supply and demand management within and across companies.

Supply Chain

A global network of organizations and activities involved in designing, transforming, consuming, and disposing of goods and services.

Operations Management

The management of processes used to design, supply, produce, and deliver valuable goods and services to customers, an important part of supply chain.

Core Capabilities

Unique skills of organizations that create competitive advantages and enable them to meet customer expectations.

Changes from that have moved us from OM to SCM

Tech and infrastructure, barriers to trade, core capabilities, collaborative networks

Total Quality Management (TQM)

An integrated business management strategy aimed at embedding awareness of quality in all organizational processes for continuous improvement.

Six Sigma

A methodology to reduce defects in products and processes to 3.4 defects per million opportunities, focusing on reducing process variation.

PDCA Cycle

Plan-Do-Check-Act cycle, a continuous problem-solving process for quality improvement.

Process Control Charts

Tools used in statistical process control to monitor and improve processes, including X-bar and R charts, P charts, and C charts.

Bullwhip Effect

The increasing variability of demand as one moves upstream in a supply chain, caused by distorted and delayed information, order batching, and other factors.

Days of Supply

The length of time operations can be supported with inventory on-hand (forecasted).

Service Level

The ability to meet customer demand without a stock out.

Stock out

When no inventory is available.

ABC Analysis

Ranking inventory by importance.

Pareto’s Law

A small percentage of items have a large impact on sales, profit, or costs.

Cycle Counting

Physically counting inventory on a routine schedule.

Global Trade Item Number (GTIN)

Identification system for finished goods sold to consumers.

Vendor-managed Inventory (VMI)

The vendor is responsible for managing inventory for the customer.

Economic Order Quantity (EOQ)

An optimizing method used for determining order quantity and reorder points.

Reorder Point

The minimum level of on-hand inventory that triggers a replenishment.

Lead Time

The time between the start and end of an activity.

Customer Relationship Management (CRM)

Technology-enabled data gathering about customers to develop strategic relationships.

Intermodal Transportation

The use of two or more modes of transportation cooperating on the movement of a shipment.

Facility Location

The process of identifying the best geographic location for a service or production facility.

Warehousing

Holding inventory received from suppliers in warehouses until needed by retailers.

Direct Shipment

Direct shipments from supplier to retailers.

Cross-Docking

Continuous shipment from suppliers to warehouses where goods are redirected and delivered to retailers.

Sales and Operations Planning (S&OP)

Process for integrating marketing and operations plans to develop a tactical plan.

Demand Chase

Adjusting capacity to meet varying demand by hiring and firing workers, with primary costs being hiring and firing costs and potential loss of labor quality.

Level Production

Building up and using inventory to maintain a constant workforce level, adjusting production based on demand to manage inventory carrying costs.

Aggregate Planning Strategies

Approaches like Chase and Level Production to match production with demand, with Chase focusing on changing production levels and Level Production on maintaining a constant rate.

Yield Management

Maximizing revenues in capital-intensive services through differential pricing, reservation systems, and overbooking, suitable for services with high fixed costs and low variable costs.

Overbooking

Taking more reservations than capacity to minimize costs related to no-shows, a common practice in high fixed cost service industries like airlines and hotels.

Demand Planning

The process of forecasting and managing customer demands to create a demand pattern, involving forecasting, demand management, and influencing demand patterns.

Time Series Forecasting

Predicting future demand based on past data, using techniques like Causal Forecasting and Time Series models to forecast demand accurately.

Material Requirements Planning (MRP)

Computing demand for dependent items to ensure the availability of materials when needed, driven by dependent demand and supported by inputs like Master Production Schedule and Bill of Materials.

Triple Bottom Line (3BL)

Evaluating the impact of activities on planet, people, and profit, emphasizing environmental sustainability, social responsibility, and economic viability in sustainable operations management.

Operations management partners

customers, suppliers, stakeholder

OM relationships

Customer Management, Supply Management, Logistics Management,

Order Winners:

why customers choose your firm over a competitor 

Order Qualifiers:

 minimum standards to be met, traits that must be met at a certain level

Order Losers:

why customers avoid your firm, traits that if not met loss mean loss of current or future order

Core capabilities:

enable firm to meet customer expectations and are difficult for competitors to imitate, organizations focusing on their unique skills that create competitive advantages

 

SCOR

identifies basic management practices at different operations levels, for benchmarking and strategy deployment

cycle view

-useful when considering operational decisions because of clearly specific roles of each member of the SC/process in supply chain divided into a series of cycles each preformed at interface between 2 successive stages of a supply chain

push/pull

divided into 2 categories based on if they are executed in response to a customer order or in anticipation of a customer order

 

Upstream

Raw materials

downstream

finished goods

Collaborative planning, forecasting and replenishment (CPFR):

• supply chain partners sharing information-creates streamlined supply chain process

 

Economy of Scale:

cost per unit of weight decreases as shipment size increases

Economy of distance

cost per unit traveled decreases as distance moved increases

Consolidation

one large shipment made of many smaller shipments

Market area

combine small shipments from one shipper going to the same area

Pooled Delivery:

combine small shipments from different shippers going to the same area

Collaborative, planning, forecasting and replenishment (CPFR)

supply chain partners share forecast & demand & resource plans to reduce risk

MRP (material requirements planning)

•       computes demand for dependent items

-planning system used to ensure the right qualities of materials are available when needed

DRP (Distribution Requirements Planning)

•       computes demand for finished goods in the distribution system

CRP (capacity requirements planning)

•       determines if sufficient resources are available

Master Production Schedule (MPS)-

how many you need and when you need it

-quantities of each finished product to be completed each period

Frozen

•       No schedule changes allowed within this window

Moderately Firm

•       Specific changes allowed within product groups as long as parts are available

Flexible

Significant variation allowed as long as overall capacity requirements remain at the same levels

Bill of Materials (BOM):

A Complete Product Description-recipe for product (all parts that go into it)

Inventory Records File

•       Each inventory item carried as a separate file

–      Status according to “time buckets” (how readily available it is)

–      Time bucket-individual period for planning

Fixed order quantity (FOQ): 

1. ):  the same order quantity is ordered each time

Lot for Lot (L4)

order what is necessary

Periodic order quantity (POQ): 

3. order what is necessary to handle a certain number of periods

Enterprise Resource Planning (ERP) Systems

Planning for resources done from common database

Sustainable operations management

is focused on reducing any potentially negative impacts of a firm’s processes and products on the environment and society.

Triple Bottom Line (3BL):

•       ): full impact of activities on planet, people, and profit

-basically, want to low negative impacts of firms processes and products on the environment (planet) and society (people) while pursing sustainable business models (profits)

Sustainability

meeting today’s needs without compromising the ability to meet tomorrow’s

Life Cycle Assessment

analysis tool that helps managers assess the full impact of environmentally consequential waste in 5 product stages

ISO 14000

: international standard and certification for environmental management

•       Identifying & controlling the impact of activities, products, and services

•       Improving environmental performance continuously

•       Implementing a systematic approach to setting and achieving goals

Organizational Culture:

•       behavior of individuals within a firm influenced by organizational goals, structure, training, coworkers’ attitudes, and corporate successes and failures

National Culture

•       : behavior of individuals within a firm influenced by the norms and values from the home or host culture, or a combination of both.