1. Supply Chain Management
MBA 8452 Systems and Operations Management
Supply Chain Management

2. Introduction to Operations Management/ Operations Strategy
Process Analysis
and Design
Project
Management
Planning for Production
Process Control
and Improvement
Process Analysis
Capacity Management
Quality
Management
Aggregate Planning
Job Design
Statistical
Process Control
Just in Time
Scheduling
Manufacturing
Layout/
Assembly Line Balancing
Inventory Control
Supply Chain
Management
Services
Waiting Line Analysis

3. Objective: Supply Chain Management
Explain the Purchasing Process
Supplier Relationships
Define Supply Chain Management
Bullwhip Effect
Discuss Outsourcing Decisions

4. The Purchasing Process
Initiate a requisition
proactive vs reactive purchasing
Identify the source of materials
internal vs external (outsourcing)l
cost, strategic nature, available sources
new buy vs rebuy
new contract, old contract
negotiation process
Place, track and receive the order
EDI, Bar Codes, EFT payment

5. Origins of Purchasing and Supply Management
Types of Purchasing in Business
resale
consumption
conversion
Purchasing’s Role in Business
department v/s function
purchased materials as elements required for productive work
purchasing as the manager for outside manufacturing

6. Transition to Supply Management
Two shifts in focus
Value-adding benefits
Quality
Technology
Supply
Time
Costs
Strategic focus
Evolution of purchasing function

7. Four Stages of Purchasing and Supply Management Development
Strategic
Supply
Management
Stage 3
Proactive
Stage 2
Mechanical
Stage 1
Reactive

8. Purchasing/Supply Management Function
The strategic role of purchasing/supply management in the firm
high level of responsibility and accountability
Professionalism in the field- Institute for Supply Management

9. What Is Supply Chain Management?
A network of interrelated facilities and activities that create and deliver products and services to end customers
Supply Chain Management (SCM)
A total system approach to managing the entire flow of information, materials, and services from raw-material suppliers through factories and warehouses to the end customer

10. Supply Chain Illustration
Downstream
Upstream
Warehouses &
Distribution Centers
Suppliers
Manufactures
Customers

11. The Supply Chain Flows Suppliers Manufacturers Distributors Retailers
Capacity, promotion plans, delivery schedules
Raw materials, Intermediate products, finished goods
Credits, consignment, payment terms, invoice
Information
Material
Finance
Suppliers
Manufacturers
Distributors
Retailers
Customers
Payments, consignment
Returns, repairs, servicing, recycling, disposal
Sales, orders, inventory, quality, promotion plans
Information
Material
Finance

12. Information Distortion in Supply Chain The Bullwhip Effect
Customer’s Demand
to Retailers
Retailer’s Orders
to Wholesalers
Order Quantity
Order Quantity
Time
Time
Wholesaler’s Orders
to Manufacturers
Manufacturer’s Orders
to Suppliers
Order Quantity
Order Quantity
Time
Time
Bullwhip Effect: The increasing variability in demand orders from downstream customers to upstream suppliers

13. The Bullwhip Effect Causes
Uncertainty at every stage of supply chain
Lack of information sharing and coordination among supply chain members

14. The Bullwhip Effect Consequences
Inefficiency and/or irresponsiveness in the supply chain operations
Excessive inventory
Poor demand forecasts
Insufficient or excessive capacities
Poor customer services

15. Improve Supply Chain Performance
Information and knowledge Sharing
Coordination and Integration
Right Supply Chain Choice
Product/Process Postponement

16. Information Sharing Critical to supply chain success
The key to reduce/eliminate the bullwhip effect
The enabler for supply chain integration and coordination

17. Information Sharing What Information to Share?
Category
Examples

18. Coordination and Integration
Trust
Communication
Shared performance measures
Risk and reward sharing
Example: Vendor Managed Inventory (VMI)

19. Supply Chain Performance Measures

20. Inventory Related Measures of Supply Chain Performance
Inventory Turnover
Inventory Turnover =
Weeks of Supply
Weeks of Supply =
Cost of goods sold
Average aggregate inventory value
Average aggregate inventory value
Cost of goods sold

21. Choosing the Right Supply Chain Know Your Products
Functional vs. Innovative Products

22. Physically Efficient or Market-Responsive Supply Chain?

23. Matching Supply Chains with Products
Innovative
Products
Functional
Products
Match
Mismatch
Efficient
Supply-Chain
Responsive
Supply-Chain