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1、Operations Management,Chapter 11 Supply Chain Management,PowerPoint presentation to accompany Heizer/Render Principles of Operations Management,7eOperations Management,9e,Outline,Global Company Profile:Darden RestaurantsThe Supply Chains Strategic ImportanceGlobal Supply Chain IssuesSupply Chain Eco
2、nomicsMake-or-Buy DecisionsOutsourcing,Outline Continued,Ethics in the Supply ChainSupply Chain StrategiesMany SuppliersFew SuppliersVertical IntegrationKeiretsu NetworksVirtual Companies,Outline Continued,Managing the Supply ChainIssues in an Integrated Supply ChainOpportunities in an Integrated Su
3、pply ChainE-ProcurementOnline CatalogsAuctionsRFQsRealtime Inventory Tracking,Outline Continued,Vendor SelectionVendor EvaluationVendor DevelopmentNegotiations,Outline Continued,Logistics ManagementDistribution SystemsThird-Party LogisticsCost of Shipping AlternativesLogistics,Security,and JITMeasur
4、ing Supply Chain Performance,Learning Objectives,When you complete this chapter you should be able to:,Explain the strategic importance of the supply chainIdentify five supply chain strategiesExplain issues and opportunities in the supply chainDescribe approaches to supply chain negotiations,Learnin
5、g Objectives,When you complete this chapter you should be able to:,Evaluate supply chain performanceCompute percent of assets committed to inventoryCompute inventory turnover,Darden Restaurants,Largest publicly traded casual dining company in the worldServes over 300 million meals annually in more t
6、han 1,400 restaurants in the US and CanadaAnnual sales of$2.4 billionOperations is the strategy,Darden Restaurants,Sources food from five continents and thousands of suppliersFour distinct supply chainsOver$1.5 billion spent annually in supply chainsCompetitive advantage achieved through superior su
7、pply chain,The Supply Chains Strategic Importance,Supply chain management is the integration of the activities that procure materials and services,transform them into intermediate goods and the final product,and deliver them to customers,Competition is no longer between companies;it is between suppl
8、y chains,Supply Chain Management,Transportation vendorsCredit and cash transfersSuppliersDistributors Accounts payable and receivableWarehousing and inventoryOrder fulfillmentSharing customer,forecasting,and production information,Important activities include determining,A Supply Chain for Beer,Figu
9、re 11.1,Global Supply Chain Issues,React to sudden changes in parts availability,distribution,or shipping channels,import duties,and currency ratesUse the latest computer and transmission technologies to schedule and manage the shipment of parts in and finished products outStaff with local specialis
10、ts who handle duties,freight,customs and political issues,Supply chains in a global environment must be able to,How Supply Chain Decisions Impact Strategy,Table 11.1,How Supply Chain Decisions Impact Strategy,Table 11.1,How Supply Chain Decisions Impact Strategy,Table 11.1,Supply Chain Economics,Sup
11、ply Chain Costs as a Percent of Sales,Table 11.2,Supply Chain Economics,Dollars of additional sales needed to equal$1 saved through the supply chain,Table 11.3,Make-or-Buy Decisions,Table 11.4,Make-or-Buy Decisions,Table 11.4,Outsourcing,Transfers traditional internal activities and resources of a f
12、irm to outside vendorsUtilizes the efficiency that comes with specializationFirms outsource information technology,accounting,legal,logistics,and production,Ethics in the Supply Chain,Opportunities for unethical behavior are enormous and temptations are highMany companies have strict rules and codes
13、 of conduct that define acceptable behaviorInstitute for Supply Management has developed a detailed set of principles and standards for ethical behavior,Principles and Standards for Ethical Supply Management Conduct,LOYALTY TO YOUR ORGANIZATIONJUSTICE TO THOSE WITH WHOM YOU DEALFAITH IN YOUR PROFESS
14、ION,Table 11.5,Principles and Standards for Ethical Supply Management Conduct,Avoid the intent and appearance of unethical or compromising practice in relationships,actions,and communicationsDemonstrate loyalty to the employer by diligently following the lawful instructions of the employer,using rea
15、sonable care and granted authorityAvoid any personal business or professional activity that would create a conflict between personal interests and the interests of the employer,Table 11.5,Principles and Standards for Ethical Supply Management Conduct,Avoid soliciting or accepting money,loans,credits
16、,or preferential discounts,and the acceptance of gifts,entertainment,favors,or services from present or potential suppliers that might influence,or appear to influence,supply management decisionsHandle confidential or proprietary information with due care and proper consideration of ethical and lega
17、l ramifications and government regulationsPromote positive supplier relationships through courtesy and impartialityAvoid improper reciprocal agreements,Table 11.5,Principles and Standards for Ethical Supply Management Conduct,Know and obey the letter and spirit of laws applicable to supply managemen
18、tEncourage support for small,disadvantaged,and minority-owned businessesAcquire and maintain professional competenceConduct supply management activities in accordance with national and international laws,customs,and practices,your organizations policies,and these ethical principles and standards of
19、conductEnhance the stature of the supply management profession,Table 11.5,Supply Chain Strategies,Negotiating with many suppliersLong-term partnering with few suppliersVertical integrationKeiretsuVirtual companies that use suppliers on an as needed basis,Many Suppliers,Commonly used for commodity pr
20、oductsPurchasing is typically based on priceSuppliers compete with one anotherSupplier is responsible for technology,expertise,forecasting,cost,quality,and delivery,Few Suppliers,Buyer forms longer term relationships with fewer suppliersCreate value through economies of scale and learning curve impr
21、ovementsSuppliers more willing to participate in JIT programs and contribute design and technological expertiseCost of changing suppliers is huge,Vertical Integration,Figure 11.2,Vertical Integration,Developing the ability to produce goods or service previously purchasedIntegration may be forward,to
22、wards the customer,or backward,towards suppliersCan improve cost,quality,and inventory but requires capital,managerial skills,and demandRisky in industries with rapid technological change,Keiretsu Networks,A middle ground between few suppliers and vertical integrationSupplier becomes part of the com
23、pany coalitionOften provide financial support for suppliers through ownership or loansMembers expect long-term relationships and provide technical expertise and stable deliveriesMay extend through several levels of the supply chain,Virtual Companies,Rely on a variety of supplier relationships to pro
24、vide services on demandFluid organizational boundaries that allow the creation of unique enterprises to meet changing market demandsExceptionally lean performance,low capital investment,flexibility,and speed,Managing the Supply Chain,Mutual agreement on goalsTrustCompatible organizational cultures,T
25、here are significant management issues in controlling a supply chain involving many independent organizations,Issues in an Integrated Supply Chain,Local optimization-focusing on local profit or cost minimization based on limited knowledgeIncentives(sales incentives,quantity discounts,quotas,and prom
26、otions)-push merchandise prior to saleLarge lots-low unit cost but do not reflect salesBullwhip effect-stable demand becomes lumpy orders through the supply chain,Opportunities in an Integrated Supply Chain,Accurate“pull”dataLot size reductionSingle stage control of replenishmentVendor managed inven
27、toryBlanket orders,Opportunities in an Integrated Supply Chain,StandardizationPostponementDrop shipping and special packagingPass-through facilityChannel assembly,Radio Frequency Tags,E-Procurement,Uses the internet to facilitate purchasingElectronic ordering and funds transferElectronic data interc
28、hange(EDI)Advanced shipping notice,E-Procurement,Online catalogsCatalogs provided by vendorsCatalogs published by intermediariesExchanges provided by buyers,Internet Trading Exchanges,Health care products Retail goods Defense and aerospace products Food,beverage,consumer products Steel and metal pro
29、ducts Hotels,E-Procurement,AuctionsMaintained by buyers,sellers,or intermediariesLow barriers to entryIncrease in the potential number of buyers,E-Procurement,RFQsCan make requests for quotes(RFQs)less costlyImproves supplier selectionReal-time inventory tracking,Vendor Selection,Vendor evaluationCr
30、itical decisionFind potential vendorsDetermine the likelihood of them becoming good suppliersVendor DevelopmentTrainingEngineering and production helpEstablish policies and procedures,Vendor Selection,NegotiationsCost-Based Price Model-supplier opens books to purchaserMarket-Based Price Model-price
31、based on published,auction,or indexed priceCompetitive Bidding-used for infrequent purchases but may make establishing long-term relationships difficult,Vendor Evaluation,Logistics Management,Objective is to obtain efficient operations through the integration of all material acquisition,movement,and
32、 storage activitiesIs a frequent candidate for outsourcingAllows competitive advantage to be gained through reduced costs and improved customer service,Distribution Systems,TruckingMoves the vast majority of manufactured goodsChief advantage is flexibilityRailroadsCapable of carrying large loadsLitt
33、le flexibility though containers and piggybacking have helped with this,Distribution Systems,AirfreightFast and flexible for light loadsMay be expensive,Distribution Systems,WaterwaysTypically used for bulky,low-value cargoUsed when shipping cost is more important than speed,Distribution Systems,Pip
34、elinesUsed for transporting oil,gas,and other chemical products,Third-Party Logistics,Outsourcing logistics can reduce costs and improve delivery reliability and speedCoordinate supplier inventory with delivery servicesMay provide warehousing,assembly,testing,shipping,customs,Cost of Shipping Altern
35、atives,Product in transit is a form of inventory and has a carrying costFaster shipping is generally more expensive than slower shippingWe can evaluate the two costs to better understand the trade-off,Cost of Shipping Alternatives,Value of connectors=$1,750.00Holding cost=40%per yearSecond carrier i
36、s 1 day faster and$20 more expensive,=(.40 x$1,750)/365=$1.92,Since it costs less to hold the product one day longer than it does for the faster shipping($1.92$20),we should use the cheaper,slower shipper,Logistics,Security,and JIT,Borders are becoming more open in the U.S.and around the worldMonito
37、ring and controlling stock moving through supply chains is more important than everNew technologies are being developed to allow close monitoring of location,storage conditions,and movement,Measuring Supply Chain Performance,Table 11.6,Measuring Supply Chain Performance,Assets committed to inventory
38、,Investment in inventory=$11.4 billionTotal assets=$44.4 billion,Percent invested in inventory=(11.4/44.4)x 100=25.7%,Measuring Supply Chain Performance,Table 11.7,Measuring Supply Chain Performance,Inventory turnover,Measuring Supply Chain Performance,Table 11.8,Measuring Supply Chain Performance,Inventory turnover,Measuring Supply Chain Performance,=14.2/1.69=8.4,Measuring Supply Chain Performance,=1.69/.273=6.19 weeks,
