OUTLINE Questions? Comments? Any stories? Quiz Results Return Quiz Creating a live histogram of your choice Chapter 3 and 4 (Chopra) Performance Types of networks

Measuring Performance What should measuring performance accomplish?

Measuring Performance What should measuring performance accomplish? Basis for understanding the system Influence behavior in the system Provide information about results Provide information that will initiate actions to improve the system Create accountability in individual operations The concept of Supply Chain Management requires that overall performance be measured, but intermediate points must also be measured to insure accountability

Measuring Performance (continued) Typical internal measures % orders on time Inventory turns Cycle time Costs/Goods sold Aging of orders

Measuring Performance (continued) Typical supply chain measurements Cycle time % orders on time (service level) or fill rate Order aging Comparisons to competitors (Bench marking) Responsiveness to changes in demand End items sold/Total costs Market Share

Chapter 4 – Designing the distribution network in a Supply Chain Move and store product between stages The structure of the network influences: Response time Variety of products Availability of products Customers’ experience Visibility of orders Returnability

Some basic relationships in a supply network Lower response times require more facilities Inventory costs increase with the number of facilities Transportation costs decrease with the number of facilities Total logistics costs vary parabolically with the number of facilities – there is an optimum number of facilities

Major types of distribution networks Definition: Inventory Turns = Annual Sales/ average inventory Or Annual costs/Average inventory Manufacturing Storage with direct shipping (drop) Manufacturing Storage with direct shipping and in transit merge Distributor Storage with carrier delivery Distributor Storage with Last Mile delivery (not carrier) Manufacturer/Distributor Storage with customer pickup Retail Storage with customer pickup

Summary Who owns what matters! Choice of network has long term consequences Exclusivity Customer preference

Summary Who owns what matters! Choice of network has long term consequences Exclusivity Customer preference

“Mr. Osborne, may I be excused? My brain is full”