M6 SupplyChain Integration Student 201011

M6 SupplyChain Integration Student 201011 - 01 Module 06...

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Module 06 01 Supply Chain Integration
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Supply Chain Goals & Responsibilities 02 Meet Customer Demand Right Items, Right Place, Right Time Reasonable Prices Quality – High performance, Consistency Flexibility – Customization and/or Volume Contribute to Profitability Support Revenue Streams – Cost, quality, speed, flexibility offerings Control Costs - Minimize Waste and Inventory Continuous Improvement Capture data, measure performance, analyze data Responsive to changes in market demand
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Downstream – In the direction of the customer Upstream – In the direction of the suppliers Distribution is often the pivotal point in describing these terms Back-End – Out of Sight Front-End – Visible to Customer SCM - Terminology 03
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PUSH SYSTEM 04
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Push System - PROS 05 High Inventories Low ordering costs Easier to take advantage of quantity discounts High customer service rates possible. Less likely to run out of product. Shorter Lead Times (Order placement to Delivery time) Quicker delivery if required Allows inventory to be closer to the customer Decreases customer’s need for safety stock Mistakes and Defects Tolerable Time to Inspect Inventory can support returns
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Push System - CONS 06 High Inventories High holding costs and Risk of obsolescence Low Customization Flexibility Items manufactured a long time ago, far away Less of an opportunity for customization Requires a static market Mistakes and Defects Tolerable Humans use allowances More waste, higher operational costs Forecasting miscalculations can be costly Demand high – Shortages, lost revenue Demand low – High amounts of waste
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PULL SYSTEM 07 sales order processing customers data exchange
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Pull System - PROS 08 Low Inventories Low holding costs – Fewer pipeline storage requirements Decreased handling, shrinkage, damage… Demand Driven System Make only what is required Minimizes waste – Materials, labor, transportation… Flexible Manufacturing Possible Higher Customer satisfaction – Specific Needs, High performance Able to adapt to changes – Market needs, Technology, Laws… Closer Supplier ties are Developed More efficient coordination Quality - Higher performance items developed
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Pull System - CONS 09 Low Inventories High ordering costs Lead times may be long – Increase in supply chain anxiety Risky Customer Service Rates Vulnerable to unexpected spikes in demand, seasonal demand Vulnerable to supply chain partner weaknesses/errors Vulnerable to labor utilization and labor contract issues Tougher Sell? High tech items require customer be educated Do display items/pictures portray all options and variations? Forecasting miscalculations can be costly
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This note was uploaded on 03/06/2011 for the course SCM 300 taught by Professor D during the Spring '07 term at ASU.

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M6 SupplyChain Integration Student 201011 - 01 Module 06...

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