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Unformatted text preview: * * * 3 Slides from Class on 10/5 and Creating Value Supply Chain Management Summary Slides You get DON'T get health/retirement/vacation benefits from the central company in the case. Someone else (possibly you) provides benefits. You were not hired to become part of the company, but signed a contract with the central company in the case that sets the terms of the product or service you will provide to the company. Exception: if you are working on behalf of the supplier or suppliers employees like the media reporting on sweatshops. * * * You might be a Supplier if: You provide products or services as inputs to the central company in the case to operate their business. Examples: Parts supplier, Advertising Agency, Marketing Research Firms, Headhunters, Banks making loans, a shipping company. * * You might be an Employee * You are hired by the company for long term if: employment and can be fired (no termination date set on hiring). You are protected by regulatory hiring and firing laws. You regularly get benefits (vacation, sick days, health care, retirement plan, etc.) from the company because this is your main job. EXCEPTION: Executives Officer hired by the company's Board of Directors CEO (President), CFO (VP Finance), CMO (VP Marketing), COO (VP Operations), CHRO (VP Human Resources) Considered an agent of the Owners and therefore included in the Owner stakeholder group. * Who has had Latin? * * What does "Respondeat Superior" mean? Literally, "Let the Master Answer" A doctrine in Fiduciary Law concerning Employees. Remember the Principal has the responsibility to Indemnify (protect) the agent under Fiduciary law? Respondeat Superior means the Employer needs to protect the Employee working for them. It does not apply to Supplier relationships.
9-4 Supply Chain Management and Suppliers as Stakeholders
The Art of Creating Value Also read the Introduction to Supply Chain Management text in this folder to prepare for Exam #2 9-5 What is Supply Chain Management? The supply chain encompasses all activities associated with the flow and transformation of goods & services from the raw materials stage (extraction), through to the end user, as well as the associated information flows. Supply chain management (SCM) is the integration of these activities through improved supply chain relationships, to achieve a sustainable competitive advantage. 9-6 * Creating Value Deals With Decisions Like: * How many factories? * Quality / Cost / Time tradeoffs What will we make, and what will we buy from others (supply chain, Make or Buy decisions)? How will we measure quality? What are the specifications need
for success spelled out in the contract? Need an objective performance measurement system to: 1.Ensure both parties meet expectations, Create clear objectives, enable joint problem solving 1. Better customer service 2. Stronger supply chain relationships 3. More sharing of information across the supply chain How to reduce costs Reducing Cost Improving Quality
Hold Down Costs Hold Up Price (Quality) * * * 7 VALUE-ADDING ACTIVITIES
(types of transformations) 1. Physical change (oil refining, diamond cutting) 2. Transportation 3. Storage and distribution 4. Inspection 5. Exchange 6. Information 7. Physiological Example One pound ball of clay value is $.50
9-9 Value of this Mug?
$5.00 $7.00 $10.00 $12.00 9-10 Supply Chain Management Materials clay and glaze Utilities electricity water Equipment wheel, kiln, tools Building People Transportation Profit $3.00 Hold Up Price (Quality) Customer's opinion of value $10.00 Total cost $7.00 Hold Down Costs 9-11 Porter's 3 Business Strategies Cost leadership Low cost Economies of scale May have high profit through cost advantage Unique product features Quality High cost to produce but can charge a premium Differentiation Focus Segment of the market, niche (small/specific) May have low cost, high differentiation or both Supply Chain Management = "From the dirt to the dump"
"make and buy" decisions
Operations Management (internal) "Makes" value within the firm Upstream External (inputs)
Suppliers Downstream External
(resellers, transportation) Inputs: Raw Materials Labor Capital Information Transformation Process Outputs: Products Services Customer * * * New Concerns in Supply Chain Management Environmental concerns have made companies more concerned about:
1. Development of product repair networks to handle warranty and quality problems resulting in less waste 2. Recovery and reuse of used products 3. Creating processes to disassemble used products for reuse in other products 4. Transformation of used products into environmentally-friendly bi-products that can be disposed of properly 9-14 * * * Business decision-maker vis a vis vendors, suppliers, creditors This relationship is purely contractual; very little governmental regulations apply other than the controls on credit arrangements (Uniform Commercial Code UCC). C ...
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