It depends on managerial decision top down approach

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Unformatted text preview: ding commitment at all levels of the organization to encourage implementation and continued use of SCM techniques. – It depends on managerial decision (top-down approach) • Supply chain costing – Focuses on cost build up along the supply chain • Value stream mapping (“material & information flow mapping”) – To analyze and design the flow of materials and information required to bring a product or service to a consumer 48 4 SC Performance Measurement and Improvement • “We cannot manage something that we cannot measure” • Measuring the performance of processes, products, logistics • SCM methodology vs. Deming Cycle (quality management) • What to measure? – What performance metrics? – Which SC members are measured? (SC modeling) 49 4.1 Performance Metrics • Generic supply chain metrics – Customer service – Assets (inventory, capacity) – Time/speed/flexibility • Service-Inventory Tradeoff Is it better or worse? 50 Service Metrics • The perfect order should be: – 100% fill rate (complete order) – 100% on-time delivery, with correct shipping documents, with accurate items and quantity, and in perfect condition – Error-free documentation (documentation accuracy = 100%) – Damage-free goods – Quality as expected Purchasing decisions not only based on low cost, but also delivery speed, quality, supply flexibility 51 Inventory Metrics • Current inventory on hand • Value ($) • Time supply (days / weeks of supply) • Turns = COGS / (inventory investment) Time/Speed/Flexibility Metrics • Customer response time • Cycle time for planning, sourcing, production, and delivery • Supply chain cycle time (sum all lead times) Bullwhip Metrics • Ratio = Std. dev. of orders / Std. dev. of sales 52 4.2 Supply Chain Modeling ...
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This document was uploaded on 01/28/2014.

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