1. 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

2. Measuring Performance
What should measuring performance accomplish?

3. 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

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

5. 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

6. 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

7. 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

8. 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

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

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

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