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SCM300 - Module 7

SCM300 - Module 7 - SCM 300 MODULE 07 Study Packet Module...

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SCM 300 – MODULE 07 Study Packet Module 07: SCM Integration (Push/Pull, JIT, Postponement, Bullwhip effect, Integration risks) With the basic supply chain ingredients in hand (procurement, logistics, manufacturing) this module looks to demonstrate the difficulties encountered when managers try integrating all of the supply chain pieces. Push and Pull ideologies will be discussed as will the philosophy of JIT. In addition, a list of risks will be explored and potential strategic options will be considered. Finally, during lecture a series of examples about some of these options will be discussed. Reading Assignments: Text: YOGA Text Reading Assignment: Pages: 60-66, 70-77, 261-266 Text: MARBLE Text Reading Assignment: Pages: 91-100 SCM Basics – Slides 02-05 What are the basic responsibilities of a supply chain? 1. Meet customer demand (right items, right place, right time, Quality – high performance, consistency, Flexibility, reasonable prices). 2. To minimize waste and inventory. 3. Capture data/measure performance, analyze data, and improve. 4. Contribute to profitability (support revenue streams, and control costs (decrease)). Describe Hau Lee’s Triple-A supply Chain. How can it be achieved? 1. Agility-   Respond to short-term changes in demand or supply quickly; handle external disruptions smoothly. (Information flow, Relationships, Inventory buffers, Crisis Management Teams/Plans, Postponement). 2. Adaptability - Adjust supply chain’s design to meet structural shifts in markets; modify supply network to strategies, products, and technologies (Monitor global economies, Use intermediaries, Evaluate END-customer needs, Flexible product design). 3. Alignment – create incentives for better performance (Exchange info freely with vendors/customers, Clear roles and responsibilities; Share risks, costs, gains). Where is the front-end of the supply chain? The back-end? Upstream? Downstream? Downstream – activities or firms that are positioned later in the supply chain relative to some other activity or firm of interest. Upstream – a term used to describe activities or firms that are positioned earlier in the supply chain relative to some other activity or firm of interest. Push vs. Pull – Slides 06-11 What is a Push System? What is a Pull System? Are items made before or after they are ordered? Push system – produces goods in advance of customer demand using a forecast of sales and moves them through supply chain to points of sale where they are stored as finished goods inventory (left to right). Pull system – produces only what is needed at upstream stages in the supply chain in response to customer demand signals from downstream stages (right to left). What are some of the trade-offs involved in utilizing either a Push or Pull system? Push system – 1. High inventories (Low ordering costs, Easier to take advantage of quantity discounts, High customer service rates possible. Less likely to run out of product). 2. 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). 3. Mistakes and defects tolerable -
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