Mbpfc6 - Chapter 6 1 Accurately Matching Demand with Supply...

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Unformatted text preview: Chapter 6 1 Accurately Matching Demand with Supply is the Key Challenge: Inventories ... by 1990 Wal-Mart was already winning an important technological war that other discounters did not seem to know was on. “Wal-Mart has the most advanced inventory technology in the business and they have invested billions in it”. (NYT, Nov. 95). WSJ, Aug. 93: Dell Computer stock plunges. The company was sharply off in forecast of demand resulting in inventory write downs. BW 1997: Chapter 6 2 Key Financial Indicators of Supply Chain Performance Return on Assets Net Present Value … These are LAGGING indicators. What must the supply chain do to achieve this? Chapter 6 3 Costs of not Matching Supply and Demand Cost of overstocking liquidation, obsolescence, holding costs Cost of under-stocking lost sales and resulting lost margin Chapter 6 4 Where is the Flow Time? Buffer Operation Waiting Processing Chapter 6 5 Flow Times in White Collar Processes Source : J. Blackburn Industry Process Average Flow Time Theoretical Flow Time Flow Time Efficiency Life Insurance New Policy Application 72 hrs. 7 min. 0.16% Consumer Packaging New Graphic Design 18 days 2 hrs. 0.14% Commercial Bank Consumer Loan 24 hrs. 34 min. 2.36% Hospital Patient Billing 10 days 3 hrs. 3.75% Automobile Manufacture Financial Closing 11 days 5 hrs 5.60% Chapter 6 6 Inventory Analysis Managing Business Process Flows , Anupindi, Chopra, Deshmukh, Van Mieghem & Zemel, 2006, Upper Saddle River, NJ: Prentice Hall Inventory is 3 rd basic measure of process improvement...
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This note was uploaded on 04/07/2008 for the course MGT 390 taught by Professor Fredendall during the Fall '07 term at Clemson.

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Mbpfc6 - Chapter 6 1 Accurately Matching Demand with Supply...

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