Chapter 13 Supply chain management, after studying this chapter you will be able to: Introduce the concept of a firm’s supply chain and show how it has evolved over time to its present status, identify current trends that are affecting the characteristics of a supply chain, present the requirements necessary for a successful supply chain,...
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chapter 13
DAVIS AQUILANO CHASE
PowerPoint Presentation by Charlie Cook
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Chapter Objectives
Chapter Objectives
• Introduce the concept of a firm’s supply chain and show how it has evolved over time to its present
status
• Identify current trends that are affecting the
characteristics of a supply chain
• Present the requirements necessary for a successful supply chain
• Discuss the impact of technology on a firm’s supply chain
• Define in-transit inventory costs and show how they impact the purchasing decision
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Managerial Issues
Managerial Issues
• Concentration of resources on the firm’s core competencies such as supply chain
management.
• Increasing proportion of purchased goods and services as inputs into products.
• Increased pressure to reduce inventories.
• Applying advances in information technology
to strategically manage supplier relationships and the supply chain itself.
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Definition of Supply Chain Management
Definition of Supply Chain Management
• Supply Chain
–The steps and the firms that perform these steps
in the transformation of raw inputs into finished products bought by customers.
• Inbound Logistics
–The delivery of goods and services that are
purchased from suppliers and/or their
distributors.
• Outbound Logistics
–The delivery of goods and services that are sold
to a firm’s customers and/or distributors.
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A Company’s Supply Chain
A Company’s Supply Chain
Exhibit 13.1
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The Evolution of Supply Chain Management
The Evolution of Supply Chain Management
Exhibit 13.2a
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The Evolution of Supply Chain Management
The Evolution of Supply Chain Management
Exhibit 13.2b
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The Trend Toward Reducing the Number of Suppliers
The Trend Toward Reducing the Number of Suppliers
Exhibit 13.3
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Key Terms
Key Terms
• Supplier-Managed Inventories
–Inventories in a firm’s facility that are the
responsibility of the supplier to maintain and to replenish as necessary.
• Consignment Inventories
–Inventories that are physically present in a
firm’s facility but that are still owned by the
supplier.
• EDI (electronic data exchange)
–Direct link between a manufacturer’s database and that of the vendor.
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Key Terms (cont’d)
Key Terms (cont’d)
• Quick Response (QR) Programs
–Just-in-time replenishment system using
bar-code scanning and EDI.
• Efficient Customer Response (ECR)
–Strategy for bringing distributors, suppliers, and grocers together using bar-code scanning and EDI.
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Factors Impacting the Supply Chain
Factors Impacting the Supply Chain
Reduced Number of Suppliers
Shorter Product Life Cycles
Increased Competition Supply
Chain
Supplier-Managed Inventories
Advances In Technology
Contingent Inventories
Shared or Reduced Risk
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Requirements for Successful Supply Chain Requirements for Successful Supply Chain
Successful Supply Chain Management
Successful Supply Chain Management
Trust
Relationships
Long-Term Relationships
Information Sharing
Information Sharing Individual Strengths
Individual Strengths
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The Role of Logistics in The Supply Chain
The Role of Logistics in The Supply Chain
• Partnering
–Establishing a strategic alliance or partnership with a firm that specializes in transportation or logistics.
–Using a logistics partner to store finished goods
at the logistics partner’s hub or distribution
center.
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The Role of Logistics in The Supply Chain
The Role of Logistics in The Supply Chain
• In-Transit Inventory Costs
–Combination of transportation and carrying
costs associated with delivery of raw materials and components that are inbound to the plant.
Total annual (inbound) costs =
Transportation costs + Intransit inventory carrying costs + Purchase costs
TC = DM + (X/365)iDC + DC
D = Annual demand
M = Transportation cost per unit
X = Transportation time in days
i = Annual cost of capital
C = Unit cost per item
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The TradeOff between Transportation Costs
and the Cost of Capital with Respect
to the Shipment of Products
The TradeOff between Transportation Costs
and the Cost of Capital with Respect
to the Shipment of Products
Exhibit 13.4
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Disintermediation
Disintermediation
• Disintermediation
–The trend to reduce many of the steps in the supply chain by reducing the number of
intermediaries in the chain.
• Cross-docking
• Direct-to-store shipments
–JIT II ®: vendor and customer work closely
together, eliminating many of the intermediate steps that now exist.
• Vendor representative located at facility
• Direct database linkage with vendor’s
manufacturing facility.
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Major SCM Software Packages
Major SCM Software Packages
Exhibit 13.5