Principles of Supply Chain Management

SCM Study Guide 1. Define Operations and Supply Chain Management - Operations: Planning, scheduling, and controlling activities that transform inputs into finished products and services (p. 5) - Supply Chain Management Procurement: Actively managing activities and supply chain relationships with maximization of customers To increase value and achieve sustainable competitive advantages. (pp. 6-7) Supply Chain: A network of manufacturers and service providers that work together to develop products or services needed by end users. These producers are connected to each other through physical flows, information flows and cash flows. 2. Understand and understand, identify a simplified picture of a supply chain (pp. 6-7) Extraction: Term used to describe activities or businesses that are further up the supply chain from another activity or business of interest. - Downstream: Used to describe activities or businesses that are downstream in the supply chain of another activity or business of interest. - Tier 1 Supplier: A supplier that supplies products or services directly to a company. - Second Tier Supplier: Supplier that provides products or services to a first tier Supplier 3. Professional Associations - APICS: Association for Operations Management - ISM: Institute of Supply Chain Management - CSCMP: Council of Supply Chain Management Professionals. - ASQ: American Society for Quality 4. Supply Chain Activities (p.12) Process Selection Forecasting Capacity Planning Inventory Management Planning and Control Purchasing Logistics 5.Understand the concepts of Case #1, 6. What is Strategy? Be able to identify key strategies - business, core competencies and functional - the mechanism through which the company coordinates its decisions regarding structural and infrastructural elements. (p.20) - Key Strategies: (p.21) - Core Competency: An organizational strength or capability developed over a long period of time that is valuable to customers and that is difficult, if not impossible, for competitors to match. can be copied. - Business Strategies: Strategies that identify a company's target customers and set deadlines and performance goals for the company. - Functional Strategies: A strategy that translates corporate strategy into specific actions for functional areas such as marketing, human resources and finance. Functional strategies should be aligned with the overall business strategy and with each other. 8. Be able to calculate the value index 9. Types of quality - performance, compliance, reliability (p. 25) - Construction quality: refers to the basic operating characteristics of a product or service. - Conformance quality: indicates whether the product or service was built according to specifications. - Reliability quality: determines whether a product will function for a long time without failures, breakages or the need for maintenance. 10. Costs, their relationship to the supply chain and operations management (p.27) - Labor costs - Material costs - Construction costs - Quality costs (including defect costs, evaluation costs and prevention costs) Companies have developed thousands of different cost categories, many of which are specific tailored to the problems of a particular activity. Supply chain operations and activities are natural targets for cost management efforts because they typically account for the majority of a company's costs. 11.Case concepts 2 -2 Be able to identify production processes (Five classic production processes (p. 40) - Production line: a type of production process used to produce a narrow range of standard items of identical or very similar design - Product controlled - Stages are usually connected by a system that moves elements from one stage to another - Suitable for mass production of products with similar design features - Of Large quantities are required to justify the required investment in specialized equipment and labor. - stubbornly insist on items that do not fit the design features of the production line. - Continuous Flow Process - A type of manufacturing process that produces highly standardized products using a sequence of closely related steps. - Clearly resembles an assembly line process. - The sequence of steps is not as closely linked as in a production line. - Flexible Manufacturing Systems - Highly automated batch processes that can reduce production costs for groups of similar products. - Examples: Tylenol, Jeans, Baked Goods - Fixed Position System - Type of manufacturing process in which the position of the product is fixed. -Materials, equipment and labor are transported to and from the product. - Used in industries where products are very large, massive or heavy and movement is problematic. - Examples include shipbuilding, construction projects and traditional construction. 13. Individualization levels (p. 45) - Made to Stock (MTS) - Products that do not require individualization. meaning what. Bath mats, standard cups. - Assembled to Order (ATO) - Customer-specific products only at the end of the production process. IE DVD/Blue Ray - Custom Graphics - Make to Order (MTO) - Products that use standard components, but the final configuration of these components is up to the customer. 787 - Engineering to Order (ETO) - Products are designed and manufactured from the ground up to meet specific customer needs and requirements. Rocket manufactured by spaceX 14. Service Process (p. 47) - Service Package - a package that includes all physical and intangible value-added activities that the service organization provides to the customer. -The more emphasis placed on physical activity, the greater management focus will be on capital expenditures (buildings, planes, and trucks), material costs, and other tangible assets. Think of cars and technical goods. -The more emphasis is placed on intangible assets, the more important it becomes to train and retain qualified employees and expand the company's knowledge resources. Think of a law firm, an accounting firm, etc....customization of services - from very customized to standard services. - As the level of individualization decreases, the range of services becomes more and more standardized. - As the level of personalization increases, overall performance becomes less predictable and more variable. - Customer Contact - The level of customer contact determines the relative importance of front-end and back-end operations in the service process. - Front Room - A physical or virtual point where the customer contacts the service organization directly. Examples: Sales floor in a retail store, technical support for a software company,website for a company. - Six Sigma methodology - DMAIC - Define the goals of improvement measures - Measure the existing process - Analyze the process - Improve the process - Control the new process - Continuous improvement - The philosophy that Small improvements can lead to incremental improvements to significant performance improvements over time. 19. Quality-TQMQuality - characteristics of a product or service that influence its ability to satisfy stated or assumed needs; Product or service free from defects. Comprehensive Quality Management -a management approach that leads the entire organization to achieve excellence in all quality dimensions important to customers. - Customer Orientation - Every employee has a customer whose expectations must be met, regardless of whether they are directed internally or externally at the company. - Leadership Commitment - Change must start at the top. - Leaders must convey the message that quality is important to everyone in the company. - Continuous Improvement - There will always be room for improvement, regardless of an organization's performance. - Empower Employees - Equip employees with the responsibility, authority, training and tools necessary for quality management. - Quality Assurance - Specific measures taken by companies to ensure that their products, services and processes meet the quality requirements of their customers. - Quality Function Deployment (QFD) - Statistical Quality Control (SOC) - Supplier partnerships - The commitment between companies and supply chain partners must be equal.Consider the LeapFrog example. - Strategic Quality Plan - An organizational plan that provides vision, guidance, and actions to advance quality assurance efforts and change the course of the organization when necessary. 19. Process Efficiency Factor: Ability to calculate UTL, LTL and Std Dev data. Process Capability Coefficient (Cp) -a mathematical definition of the ability of a process to meet certain quality standards. 20.Identifying the Types of Control Charts R chart and X chart - A special type of control chart for a continuous variable used to represent the mean of future samples. -R chart - A specific type of control chart for a continuous variable used to track the variation of individual observations in each sample. 21. What is ISO 9000 -ISO 9000 : a family of standards supported by the International Organization for Standardization. - Objectives: - Meet customer quality requirements and - Applicable regulatory requirements with the aim of - Improving customer satisfaction and - Achieving continuous performance improvement in pursuit of these objectives. -ISO9001:2008 - Establishment of a management system to ensure that products and services meet established requirements -ISO9004:2009 - Extension of 9001:2008 to all parties interested in or affected by the activities of a particular company 22. Dittenhofer case study on Fine China 23. Performance - how it is measured - Productivity - The ability of an employee, machine, workplace, factory or organization to produce in a given time. - Performance decisions addressed to managers: - How is performance measured? - What factors affect performance? -Supply Chain Impact on Effective Organizational Performance .- Performance Measures Theoretical Performance - Maximum production output, excluding adjustments for preventive maintenance, unplanned downtime, -Rated capacity - Expected long-term performance of a resource or system 24. Factors affecting performance - Number of lines used - Number of shifts worked - Number of temporary workers used - Number of public warehouses used - Product changes per line - Compliance Quality - Quality Improvement 25. Ability to Calculate Total Cost 26. Identify the Lowest Expected Value Expected Value - A calculation that summarizes the costs, revenues, or benefits of expected alternative capacity based on multiple levels of demand each with different probability.