1. McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

2. Chapter 3 Supply Management: An Organization Spanning Activity 3-2

3. Key Concepts Supply Management with other Internal Departments Supply Management within the Supply Chain Supply Management: Integrating Suppliers and Customers 3-3

4. Supply Management’s Relations with Other Internal Departments Engineering Manufacturing and Operations Quality Marketing Finance Information technology Logistics Accounts Payable Legal 3-4

5. Customer requirements Internal Interfaces of the Supply Management Function Supply Mgmt Marketing Engineering Material ControlQuality Marketing Manufacturing Estimates Specs. V.A. Make or buy Supplier capabilities Distribution Forecasts Configuration management Timing Quantities Production plans Schedules Product availability Quality complaints Quality procedures Inspection Source approval Inspection Quality map Product quality requirements Customers Suppliers Figure 3-1 3-5

6. Effect of Different Materials on Productivity and Cost Exhibit 3-1 3-6

7. Supply Management in Non-Manufacturing Organizations Supply management often must lead the requirements process »Professionals that often lead the effort in manufacturing organizations are often not available Quality implications, time-to-market, pricing elasticity, technology inflow and continuity of supply are all still issues These issues combine to have a major impact on a non-manufacturing firm's sales and bottom line! 3-7

8. Supply Management in Government Supply management has a major impact on the efficient and effective use of our tax dollars at all levels of government Many advances in supply management originated in the federal government Virtually all of the problems present in manufacturing organizations are present in government procurement 3-8

9. Monitoring the Supply Environment Changes in legislation Wars and other conflicts A consolidation among suppliers Wages, projected wages, labor issues 3-9

10. Six-step Environment Monitoring Strategy 1."Determine the cost, supply, and technology drivers of the materials and services..." 2."Identify the major suppliers and customers of the materials and services." 3."Determine the sources of information for those drivers." 4."Build a model that predicts the material (or service) behavior." 5."Monitor the model to determine its accuracy." 6."Continuously make improvements as new relationships are understood and additional data becomes available." 3-10

11. Concluding Remarks In assuming greater strategic responsibility, the activities of supply managers have increased to include spanning organizational boundaries Efforts to improve do not cease at an organization’s internal functions, but should span over the supply chain as well 3-11