GSCM Final

Astate - Dr. Lu

Statistical Process Control allows a firm to:

visually monitor process performance

compare the performance to desired levels or standards

take corrective action

What do firms do with Statical Process Control?

gather process performance data

create control charts to monitor process variability

Collect sample measurements of the process over time and plot on charts

The two SPC terms

Natural variations

Assignable variations

Natural variations

expected and random (can’t control)

Assignable variations

have a specific cause (can control)

Four types of control charts

x-bar chart

R-chart

P charts

C charts

x-bar chart

tracks central tendency of sample means

R-chart

tracks sample ranges (largest - smallest)

P charts

monitor the percent defective in each sample (one)

C charts

count the number of defects per unit of output (more than one)

Lean Production

waste reduction and value enhancement philosophy created by Toyota (Toyota Production System)

The five components of Toyota Production System

Muda

Kanban

Statistical process control

Poka-yoke

Five Ss

Muda

Waste in all aspects of production

Kanban

Visual project management with Kanban boards as signal card in production to start production at a work center

Statistical process control

Part of the total quality management efforts

Poka-yoke

Error or mistake-proofing in processes

Five Ss

Systematic approach to workplace organization and standardization

The seven wastes of Muda

Overproducing

Waiting

Transportation

Overprocessing

Excess inventory

Excess movement

Scrap and rework

Overproducing

Unnecessary production to maintain high utilizations

Waiting

Excess idle machine and operator, and inventory wait time

Transportation

Excess movement of materials and multiple handling

Overprocessing

Non-value adding manufacturing and other activities

Excess inventory

Storage of excess inventory

Excess movement

Unnecessary movements of employees

Scrap and rework

Scrap materials and rework due to poor quality

The Five Ss

Japanese S-terms:

Seiri

Seiton

Seiso

Seiketsu

Shitsuke

English S-terms:

Sort

Set in order

Sweep or shine

Standardize

Self-discipline or sustain

Lean Production emphasis

reduction of waste

continuous improvement

Six sigma

Product quality control

6 standard deviation

created by Motorola

only allows 3.4 defects per million observations

statistics-based decision-making framework

The five types of transportation

Motor

Rail

Air

Water

Pipeline

Motor Carriers (trucks)

most flexible mode of transportation

70% of US freight

short-to-medium hauls

classified as less-than-truckload and truck-load carriers

Rail Carriers

favorable when distance is long and shipments are heavy/bulky

slow and inflexible service

Air Carriers

expensive compared to other modes

fast

small portion of total freight hauled

not for heavy/bulky cargo

for light, high-value goods

Water Carriers

inexpensive

slow and inflexible

inland waterway, lake, coastal, and ocean

Pipeline Carriers

specialized with respect to the goods they carry

initial investment is high

little maintenance one pipeline is running

International intermediaries:

freight forwarders

trading companies

tariff

non-tariff barriers

Freight forwarder

consolidate lees-than-truckload shipments into truck-load

Tariff

Official list showing the duties, taxes, or customs imposed by the host country on imports or exports

Non-tariff barriers

import quotas, licensing agreements, embargoes, laws and other regulations imposed on imports and exports

Global Logistics

United Nations: Contracts for the International Sale of Goods (CISG)

Incoterms

Incoterms

Who is responsible for what (buyer, seller, shipper)

the destination is the point responsibility changes

Three types of Incoterms

Ex-work

FOB

CIF

Foreign Trade Zones

secure sites in US under supervision of US Customs and Border Protection

offer storage, exporting, manufacturing, assembly, repacking, testing, and repairing services

The United States-Mexico-Cananda Agreement

replace the North American Free Trade Agreement

all duties and quantitative restrictions between the three countries were removed

Logistic outsource

3 party logistics (3PL)

Crossdocking

warehouses are used to receive bulk shipments, break down, repackage, and distribute components to manufacturing location or retail center

Reverse Logistics

backward flow of goods from customers in the supply chain as returned items

Four options to reverse logistics

resell, recycle, repair, and dispose

Global Freight Security

Customs-Trade Partnership Against Terrorism (C-TPAT)

Free and Secure Trade (FAST)

ensure the security of global supply chains in general and international trucking

Three types of Global Logistics Intermediaries

Customs Brokers

International Freight Forwarders

Trading Companies

Customs Brokers

move goods through customs and handle documentation

International Freight Forwarders

move goods to and from foreign destination

Trading Companies

put buyers and sellers together and handle export/import arrangements

Customer Relationship Management

building and maintaining profitable, long-term customer relationships

“finding a new customer costs five times as much as keeping an old customer”

Basic activities of CRM

Segmenting customers

Cross-selling

Predicting customer behaviors

Customer value determination

Personalizing customer communications

Segmenting customers

group customers to customize communication and market efforts

Two types of segmenting customers

Target marketing efforts

Mobile marketing

Target marketing efforts

analyze customer preferences and customizing service for customer segments

Mobile marketing

placing advertising messages on mobile phones

Cross selling

customers are sold additional goods as the result of an initial purchase

Predicting customer behaviors

Customer defection analysis

Customer value Determination

calculating the customer lifetime value for firms

Personalizing customer communications

understanding customer behaviors and preferences

The seven sins of CRM failure

Viewing CRM primarily from a technology perspective

Lack of customer-centric vision

Not understanding the concept of a customer’s lifetime value

Insufficient top management support

Not re-engineering business processes

Underestimating the challenges in integrating various sources of data

Underestimating the challenge in effecting change

Customer defection analysis

reducing customer defections (customers who quit coming back)

5% improvement in customer retention can result in a 75% increase in profit

Six steps to designing a successful CRM

Creating the CRM plan

Involve CRM users from the outset

Select the right application and provider

Integrate existing CRM applications

Establish performance measures

Training for CRM users

Creating the CRM plan

plan should include:

objective

fit with corporate strategy

new applications

integrate or replace

costs and time frame

Involve CRM users from the outset

employee involvement and support is required

create a project team with members from all affected organizational areas

heavily involved in evaluating and selecting the CRM

Select the right application and provider

visting a CRM-oriented tradeshow

using a CRM consulting firm

searching CRM or business publications

knowledge of internal IT personnel who already know the market

Integrate Existing CRM Applications

various applications implemented over time

Establish Performance Measures

allow managers to monitor the progression of their system in meeting objectives

Training for CRM Users

provide and require training for all of the initial users

Managing Customer Service Capabilities

measuring customer satisfaction through pretransaction, transaction, and post transaction

Four types of CRM trends

Customer experience

Use of AI

Mobile CRM

Use of social media

Customer experience

engaging with customers

Use of artificial intelligence

major growth within CRM

Mobile CRM

for field sales reps

Use of social media

focal point for CRM due to COVID-19

Supply chain integration model

identify critical SC trading partners

review and establish SC strategies

align SC strategies with key SC process objectives

develop internal performance measures for key processes

assess and improve internal integration of key SC processes

develop SC performance measures for key processes

assess and improve external process integration and performance

extend process integration to 2nd tier supply chain partners

reevaluate the integration model annually

Identify Critical SC Trading Partners

use trusted suppliers

identify primary trading partners

Review and Establish SC Strategies

management should identify basic SC strategies associated with each trading partner to ensure consistency

Align SC Strategies with Key SC Process Objectives

once primary stage has been identified for end product, managers need to identify processes linking SC trading partners Dev

Develop Internal Performance Measures for Key Processes

should support overall supply chain strategy

Assess and Improve Internal Integration of Key SC Processes

coordination and collaboration internally and exteranlly between firm trading partners

Develop SC Performance Measures for Key Processes

external performance measures should align with internal performance measures

Assess and Improve External Process Integration and Performance

build, maintain, and strengthen relationships

Extend Process Integration to 2nd Tier Supply Chain Partners

integrate process to 2nd-tier partners and beyond

Reevaluate the Integration Model Annually

revisit the integration model annually for changes within supply chains

Process integration

sharing information and coordinating resources to jointly manage a process or processes

Eight key processes identified as important in supply chain:

customer relationship management

customer service management

demand management

order fulfillment

manufacturing flow management

supplier relationship management

product development and commercialization

returns management

Customer Relationship Management

tailoring product and service agreements to meet customer needs

Customer Service Management

providing information to customers such as product availability, shipping dates, and order status

Demand Management

balancing customer demand with the firm’s output capacity

Order Fulfillment

meeting customer requirements by synchronizing the firm’s marketing, production, and distribution plans

Manufacturing Flow Management

enable the right mix of flexibility and velocity to satisfy demand

Supplier Relationship Management

screening and selecting suppliers

Product Development and Commercialization

selecting new product ideas

Returns Management

managing used product disposition and product recalls

Five obstacles to process integration

Silo Mentality

Lack of SC Visibility

Lack of trust

Lack of knowledge

Bullwhip effect

Silo Mentality

“I win, you lose”

using cheap suppliers, ignoring customers, and assigning few resources to new product and service design

Lack of SC Visibility

time updating data and visibility into inventory