Supply Chain Management MidTerm

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ABC Analysis

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Supply Chain

34 Terms

1

ABC Analysis

  • What: Categorizes products total consumption (price * volume)

  • Manufacturers use it to allocate limited inventory planning resources (daily planning of A items)

  • Retailers use it to allocate planning resources but also to decide what items to drop (C items)

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2

Inventory management

  • can use ABC analysis

  • lower inventory carrying cost = increase cash flow, risk reduction, faster response to market changes, decrease interest expense, leaner supply chain

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3
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4

Demand planning

  • Used to help better manage inventory with fewer stock out and less excess inventory/holding cost

  • Use tech and data (Point of sale data) to make forecasting better —> and plan demand better

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5

S&OP

  • Forecasting across sales. Operations, Finance and Supply chain management 

  • It is very hard to achieve bc of each groups different objectives 

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6

Demand Shaping

  • Pushing the market twoard certain product

  • Methods like Buy one Get one

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7

Toyota Production System (TPS)

  • A manufacturing management system reduces wast (inventory, set up time)

  • Key Processes: Utilizing front line workers, Value stream map, JIT/Pull, Pro active continue improvement

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8

Six Sigma

  • A process improvment method that reduces variation

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9

Patriots best super bowls

  • Super Bowel 51 (2017)

  • Epic comeback

  • First super bowl to be decided at overtime

  • Lady Gaga Performed

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10

Set Up Time

  • Non Value added

  • Reducing set up time can increase capacity

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11

Just in Time (Jits)

  • Producing what is needed when its needed

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12

Economic Order Quantity (EOQ) Theory

  • What: Determine the optimal amounts of each order

  • Why: minimize total cost

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13

Process Mapping

  • Best way to see inefficiencies and get rid of the bottle neck

  • Visualize process into individual small steps

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14

Functional Product

  • Is a “need” product like groceries 

  • Easy to forecast —> low tock outs 

  • Cost is King 

  • Low Margins 

  • Long life cycle 

  • Low Variety 

  • Is a good fit for Just in time 

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15

Efficient Supply Chain

  • Firm schedule/info flow 

  • Low cost 

  • Low Inventory

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16

Innovative Product

  • Is a “want” products 

  • Difficult to forecast 

  • Short lead time 

  • High Margins 

  • High variety 

  • May also be called fashion

  • Poor fit for Just in time 

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17

Responsive SC

  • Flexible schedule

  • Differentiation 

  • Short Lead times 

  • Buffer inventory/capacity 

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18

Make to order

  • When manufacturing and supplies are waiting on stand by waiting for order to come in 

  • Example: when you order food from restaurant the chef has the ingredients but doesn’t make the food until you order 

  • An example of a pull system bc an order has to pull products through supply chain 

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19

Make to stock

  • Forecasting how much you think you can sell 

  • Example: when you go to a clothing store and their is already a certain amount of inventory you can select from (there is no back what we have is what we have) 

  • Push system bc we are pushing our inventory onto customers even though they haven’t yet laced orders 

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20

Engineer to order

  • Making a customized product for each order can’t finish product design until customer tells you what they want; everything is triggered by a customer order 

  • Example: Commissioning a piece of art the artist can not start the process until the customer lets them know what type of art they want how big and so on 

  • A pull system bc the item has to be pulled through the supply chain 

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21

Theory of Constraint (TOC)

Find/Relive bottleneck

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22

Total Landed cost

  • The total price of a product once it has landed on a customers door

  • You get it by adding the original price with all the transportation cost custom duties and ect

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23

Total Quality Management (TQM)

  • A structured approach to overall management

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24

Process Analysis

  • A set of activities which take inputs (materials or info) and transform into an out put

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25

Inventory management 

  • 2nd most important in supply chain

  • Can use ABC analysis & EOQ (TAC)

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26

Lower inventory carrying cost

  • Increase cash flow

  • faster response to market change

  • risk reduction

  • decreased interest expense

  • leaner supply chain

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27

Return On Assets (ROA)

  • ROA = Profit as percentage of sales × Asset turnover = Profit before taxes × Sales

    Sales Total assets

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28

Standard Work

  • Hard because no one likes change and resits

  • Don’t like loss of freedom

  • Remember the physicians and Cortez (either get with the program or get out)

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29

Supplier Selection

  • Use “K matrix” to decide

  • Want to have trustworthy suppliers

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30

Supplier Management

Tactical side of Sourcing— supplier scorecards , expediting, etc

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31

Change Management

  • Challenges

    • Training/Qualified

    • Transition Ramp Up/Ramp Down

    • Loss of relationship/Working procedures

    • Inevitable start up cost/revenue

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32

Economy of Scale

  • Lower costs with higher volume due to spreading fixed costs

    • when you make a lot of a product, it's cheaper to make each individual unit.

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33

Diseconomy of Scale

  • Getting bigger leads to higher costs per unit, which can reduce overall efficiency and profitability.

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34

Category Strategy

  • Determine the types of products you have and how to best source them for maximum profit and minimized supply risk —> Use K Matrix

<ul><li><p>Determine the types of products you have and how to best source them for maximum profit and minimized supply risk —&gt; Use K Matrix </p></li></ul>
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