1. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 1 OUTLINE Questions? Comments? Stories or experiences with supply chains? Take roll Chapter 1 and 2 (Chopra) Quiz next Tuesday

2. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 2 Strategic Framework for Analyzing Supply Chains Chapter 1 – Understanding Chapter 2 – Performance (Chapter 3 – Drivers and Obstacles)

3. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 3 Understanding What is a supply chain? –What did you learn about supply chains that you did not think about before? Decision Phases –Which phase is of the most interest to you? Processes –Why was this included in the chapter? Importance –Examples – what did you think of the authors’ choice of examples?

4. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 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. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 5 Phases Design –Decide on structure Planning –Define operating policies for short term operations –Annual forecast Operation –Implement operating policies

6. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 6 Process View Cycles –Customer –Retailer –Distributor –Manufacturer –Supplier Push/pull –Push : initiated by anticipation of orders –Pull : initiated by a customer order

7. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 7 Importance Can make or break a company

8. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 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 would you have used?

9. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 9 Performance - Uncertainty Demand uncertainty – customers’ demand for a product –What else is uncertain?

10. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 10 Performance - Responsiveness Wide ranges of quantities Short lead times Large variety Innovation Service level – what do you think this means? Supply uncertainty Responsiveness comes at a cost

11. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 11 Performance – Strategic fit Match the supply chain’s responsiveness to the implied uncertainty of supply and demand Balance between responsiveness and effectiveness (cost)

12. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 12 Performance – Product Life Cycle Demand – uncertain to relatively certain Margins from high to low Availability essential early to capture the market Price – unimportant to important

13. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 13 Performance – Inter-company Scope A strategic fit between companies in a supply chain is important because competition is shifting: –From company vs. company –To supply chain vs. supply chain

14. FACILITIES PLANNING ISE310L SESSION 4 Chapters 1_2, September 3, 2015 Geza P. Bottlik Page 14 “Mr. Osborne, may I be excused? My brain is full”