OMS - Notes Chapter 10 Supply Chain Management Supply chain...

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Notes Chapter 10 Supply Chain Management Supply chain manangement is the deliver of economic value to customers through management of the flow of physical goods and associated into from vendors to customers Strategic Importance of Supply Chain Management Opportunity to reduce costs - Transportation costs - Inventory holding costs Provide value to customers by making sure the right merchandise is in the right place at the right time - Fewer stockouts - Greater assortment with less inventory Improved ROI - Efficient supply chain management higher asset turnover High Return on Investment An efficient supply chain can improve a retailer’s ROI Increases sales – customers are offered more attractive assortments Net profit is improved by increasing gross margin and lowering expenses Inventory levels are lower, lower investment and total assets are lower with asset turnover higher Information Flow 1. When customer makes a purchase, sales associate scans UPC code or RFID chip on credit card/loyalty card 2. Information about purchase is transmitted from POS terminal to the buyer/planner 3. Information about purchases aggregated by buyer/planner and sent to distribution center and vendor to ship merchandise 4. Buyer/planner communicates with vendor and places a purchase order to re- supply stores 5. Buyer/planner notifies distribution center about incoming orders and how they are to be distributed to stores 6. Store managers inform distribution center about receipt of merchandise and coordinate deliveries. Data Warehousing Data warehousing is the coordinated and periodic copying of data from various sources, both inside and outside the enterprise, into an environment ready for analytical and informational processing. Wal-Mart makes good use of its data warehouse. It should. Experts estimate that it is second in size only to that of the U.S government.
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Electronic Data Interchange EDI is the computer-to-computer exchange of business documents between retailers and vendors. Examples include: Merchandise sales Inventory on hand Orders Advanced shipping notices (ASN) Receipt of merchandise Invoices for payment Networks for EDI Proprietary Systems – Network using special software (developed mostly by large retailers to exchange data with vendors) Extranet – Public Internet with access restricted to partners Intranet – Internet with access restricted to people within a company Information flow from store to buyer, buyer to distribution center, distribution center to store Benefits of EDI Reduces cycle time – inventory turnover is higher Improves overall quality of communications through better record-keeping Information can be easily analyzed Logistics Strategy Pull Supply Chain Merchandise shipped to stores based on sales and inventory levels in the stores Push Supply Chain Merchandise shipped to the stores based on forecasted sales rate Logistics The part of the supply chain process that plans, implements, and controls the
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This note was uploaded on 02/13/2011 for the course OMS 301 taught by Professor All during the Winter '07 term at University of Michigan.

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OMS - Notes Chapter 10 Supply Chain Management Supply chain...

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