GSCM 201 Midterm 1

SCOR Model

Order; Source; Transform; Fulfill; Return; Orchestrate

Form utility

Transforming inputs into products of value

Possession utility

Communicate product’s value to the customer

Time utility

Providing product when customer needs it

Place utility

Placing products where customer needs them

Value dimensions that add to competitive advantage

Innovation; Delivery; Quality; Cost; Agility; Cost

Some strategies to reduce cost:

Process Improvement; Offshoring; Outsourcing

Offshoring

Relocate facilities to another country

Outsourcing

Delegate specific tasks to a different firm

Quality - DMAIC

Methodology that helps improve quality

DMAIC

Define; Measure; Analyze; Improve; Control

Contributing to customer satisfaction happens on

Cognitive level and affective level

Experience = Expectation

Satisfaction

Performance

Products operating characteristics

Features

Unique characteristics that differentiate product from competitors

Reliability

Customer’s expectancy to count on product to not fail

Conformance

Ability to meet design specifications

Durability

Product’s life expectancy

Servicability

Speed and ease of repair

Aesthetics

Artistic value

Perceived Quality

Reputation

Gaps

Knowledge Gaps; Performance Gaps; Communication Gaps; Perception Gaps; Translation Gaps; Satisfaction or Service Quality Gaps

Customer Segmentation

Some customers are worth more than others. Do not treat all customers equally.

Seven “Rights” of Purchasing

Obtaining the right material; In the right quantity; With the right service; For delivery to the right place; At the right time; From the right supplier; At the right total cost

Strategic Sourcing Matrix

Low complexity low importance = Routine; Low complexity high importance = Leverage; High complexity low importance = bottleneck; High complexity high importance = critical

Routine

Straight forward and competitive marketplaces; Genetic items (office supplies); Shop on price (little time and effort)

Leverage

Buyers dream (buy large amounts in the stable market); You can “leverage” competing suppliers to obtain optimal price and performance; More volume means more leverage with suppliers; Influence product quality and business growth; Don’t pose significant supply risk

Bottleneck

Don’t buy as much (unique items); Small areas of spending; Supplier has more power than buyer; Suppliers have special expertise or technology; Can be created by unexpected events; Routine item becomes a bottleneck through strike shutting down a port or supplier’s factory shuts down because of a fire

Critical

Strategic items; Complex

Transactional Relationship — Relationship Goals

Minimize Costs; Assure Availability

Transactional Relationship — Nature of the Relationship

Low Value Co-Creation Potential; Arms-length; Short-term

Strategic Alliance — Relationship Goal

Maximize Value Co-creation; Assure Availability

Strategic Alliance — Nature of the Relationship

High Value Co-Creation Potential; Interdependent; Long-Term; Joint Planning via Teams; Share Resources; Shared Risks and Rewards

Early Supplier Involvement (ESI) Steps

Idea generation; Screening/Scoping; Business Case Analysis; Development; Test & Validate; Launch

Early Supplier Involvement (ESI)

Invite suppliers to share their ideas to improve your product early in the design process

ESI Benefits

Better overall design and quality; Increased product manufacturability; Reduced overall development time; A fresh set of eyes to discover design and production efficiencies

Make-versus-Buy Process

Is item or service strategically important to your organization? No: consider outsourcing; Yes: Is your organization good at it? Yes: Don’t consider outsourcing; No: Does your organization have assets to dedicate to improving the process? Yes: improve

Processes can be:

Set of activities; Specific objectives oriented; How organization executes work

Inputs

what is needed to go into the process?

Flows

What should happen during the process to achieve the desired outcome?

Outputs

What should the outcome be in order to achieve the business objective?

Resources

What is needed for the process to work smoothly?

Structure

How should the parts of the process be organized?

Process design (from low product volume/High product variety to high product volume/low product variety)

Project; Job Shop; Batch; Assembly Line; Continuous Flow

Capacity

Maximum output your process can consistently produce over a period of time under normal operating conditions

Theory of Constraints

Focuses your attention on the constraints–often referred to as bottlenecks–that affect your operations

Strategic Processes

Define and deploy business strategies; Involve the business vision

Operational Processes

Deliver value to internal and external customers; Involve the mission (carrying out the vision) of the business

Enabler Processes

Support strategic and operational processes; Involves maintenance

Lean Management

Helps you maximize customer value by eliminating process waste

Six Sigma

Disciplined approach you use to reduce process variation. You do so by employing a data-driven roadmap referred to as DMAIC

Process Improvement Trio Steps

Lean management, six sigma, theory of constraints

Five steps of Theory of Constraints

Identify; Exploit; Subordinate; Elevate; Repeat

Identify

Apply bottleneck analysis to identify the current constraint

Exploit

Increase the output of the bottleneck

Subordinate

Review all other activities in the process to ensure that they are aligned with the needs of the bottleneck

Elevate

If the constraint still exists, consider what further actions can be taken to eliminate it from being the constraint.

Repeat

The Five Focusing Steps are a continuous improvement cycle

Dissatisfaction

Experience < expectation

Delight

Experience > Satisfaction

Delivery Capability

The ability to be fast consistently

Agility capability

The ability to change/respond quickly to a customers needs

Order Qualifier

A product characteristic that is required for a customer to consider your product

Order Winner

A product characteristic that makes your product attractive; differentiates your product in a way that leads customers to want to buy it

Order Loser

A product characteristic that disqualifies your product from purchase consideration

Touch Point

Any interaction between a customer and a firm

Resource Orchestration

The skill that enables companies to bring the resources of the entire supply network together

Value Proposition

The promises you make to customers about the value you will deliver to them. How you will meet customers’ needs.