Chp.7-StratSourcing

Chp.7-StratSourcing - Chapter 7: Strategic Sourcing Supply...

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Chapter 7: Strategic Sourcing
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Supply Chains Before we start talking about sourcing, you need to understand the concepts of supply chains and supply chain management…
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3 Supply Chain Management A Supply chain consists of the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service. Supply chain management is a total systems approach to managing the entire flow of information, materials, and services from raw-material suppliers through factories and warehouses to the end customer
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4 A supply chain is a network of nodes and flows Nodes: Warehouses, Factories, Processing centers, Distribution centers, Retail outlets, Offices Flows: Material flow Information flow Nodes and Flows
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Fall 2004 BUS 370, Blackhurst 5 Supply Chain Management [Wu et al. (2001)] A Simple Supply Chain Example:
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6 Information Flow Electronic Data interchange (EDI) - computer to computer transmission of transactions between companies purchase orders, shipping notices, payment of invoices, and order change notices
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7 Increased productivity Reduction of paperwork Lead time and inventory reduction Facilitation of just-in-time systems Electronic transfer of funds Improved control of operations Reduction in clerical labor Increased accuracy Benefits of Electronic Data Interchange
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8 Bullwhip Effect The magnification of variability in orders in the supply-chain. Orders to a supplier have a larger variance than sales to a buyer These distortions amplify as they move upstream, back to suppliers
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Order Quantity Time Retailer’s Orders Time Wholesaler’s Orders Time Manufacturer’s Orders The magnification of variability in orders in the supply- chain A lot of retailers each even greater variability for a single manufacturer.
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This note was uploaded on 03/26/2008 for the course OSCM 320 taught by Professor Blackhurst during the Spring '08 term at Iowa State.

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Chp.7-StratSourcing - Chapter 7: Strategic Sourcing Supply...

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