sip_configuon_05

sip_configuon_05 - Optimizing the Supply-Chain...

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Stephen C. Graves Copyright 2005 All Rights Reserved Optimizing the Supply-Chain Configuration for New Products Presented by Stephen C. Graves Sean Willems
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Stephen C. Graves Copyright 2005 All Rights Reserved Talk Outline Problem definition Current practice Digital camera example Comparison of solution approaches Observations Next steps
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Stephen C. Graves Copyright 2005 All Rights Reserved Sourcing Optimizer Motivation How to configure a new product’s supply chain? - Various vendors can supply a raw material - Multiple processes can produce assembly Two vendors can deliver an identical product. Which one do you pick? - A quotes 100 days at $1.00 per unit - B quotes 3 days at $1.10 per unit
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Stephen C. Graves Copyright 2005 All Rights Reserved Relevant Supply Chain Costs Cost-of-goods sold Safety stock cost Pipeline stock cost Time-to-market cost Quality cost Capacity and flexibility cost
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Stephen C. Graves Copyright 2005 All Rights Reserved Current Practice = Target Costing Market price set outside the design group Gross margin for product is set This dictates product’s maximum unit cost Maximum unit cost bounds UMC UMC is then allocated to subassemblies - Having established target UMC, designers independently source their portion of the supply chain
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Stephen C. Graves Copyright 2005 All Rights Reserved Current Practice Numerous factors to consider when choosing options - Functionality, price, quality, flexibility, etc - Firm establishes minimum thresholds for each factor. Chooses
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This note was uploaded on 12/06/2011 for the course ESD 15.763j taught by Professor Davidsimchi-levi during the Spring '05 term at MIT.

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sip_configuon_05 - Optimizing the Supply-Chain...

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