1. OUTLINE
Questions? Comments?
Stories or experiences with supply chains?
Take roll
Discuss last homework
Chapter 1 – main points
New Homework
Another cost example
Chapter 2 (Chopra) Discussion
Quiz next Tuesday

2. Strategic Framework for Analyzing Supply Chains
Chapter 1 – Understanding
Chapter 2 – Performance

3. Chapter 1 – main concepts
What is a supply chain?
Decision Phases
Processes
Importance
Examples

4. What is a supply chain?
All the activities required to fill a customer’s order
Objective – Satisfy the customer’s requirements
Do customers know what they want? How do they express their requirements?
Maximize the overall value that is generated
- How should the value be distributed?

5. Phases
Design
Decide on structure
Planning
Define operating policies for short term operations
Annual forecast
Operation
Implement operating policies

6. Process View
Cycles
Customer
Retailer
Distributor
Manufacturer
Supplier
Push/pull
Push : initiated by anticipation of orders
Pull : initiated by a customer order
Examples?

7. Importance
Can make or break a company

8. Examples
Gateway- A direct sales manufacturer
7-Eleven – A convenience store
W.W. Granger and McMaster-Carr – Distributors of MRO (Maintenance, Repair and Operational) products
Toyota - A Global Auto Manufacturer
Amazon.com – An e-business
What examples did you use?

9. Another cost example
For the whole company:
Material overhead = $1M
Total Purchased direct material = $95M
Indirect overhead = $15M
Total standard hours = 125,000
Labor efficiency = 80%
Direct labor cost = $18/hr
_______________________________________________
For a product:
number of hours per unit = 0.15
cost of direct material per unit = $22

10. Chapter 2 discussion