responsive supply chains - ANSWER-Speed Focused.
Innovative Products
Efficient Supply Chain - ANSWER-Cost Focused
Good for Functional
... [Show More] Products
Functional Products - ANSWER-Predictable demand
Low inventory cost
long product life
low inventory cost
low product variety
low stockout and obsolescence cost
Stockout - ANSWER-an event that occurs when no inventory is available
Innovative Products - ANSWER-High demand uncertainty
short product life
high inventory cost
high profit margins
high product variety/low volume
high stockout cost/obsolescence cost
Efficient vs Responsive SC Operating Model - ANSWER-Efficient: supply predictable demand at lowest possible cost
Responsive: Respond quickly to changes in demand to minimize stockout, lost sales, markdowns, and obsolete inventory.
Efficient vs Responsive SC Capacity Strategy - ANSWER-Efficient: Maintain high average utilization rate
Responsive: Deploy excess buffer capacity/capacity flexibility
Efficient vs Responsive SC Inventory Strategy - ANSWER-Efficient: high turns, minimize inventory (inventory = cost)
Responsive: deploy buffer stock (extra inventory) of parts/finished goods
Efficient vs Responsive SC Lead Time Strategy - ANSWER-Efficient: Reduce lead time so long as it doesn't increase cost.
Responsive: Invest aggressively to reduce lead time
Efficient vs Responsive SC Supplier Selection - ANSWER-Efficient: cost and quality
Responsive: Speed, flexibility, responsiveness, and quality
Efficient vs Responsive SC Logistics Selection - ANSWER-Efficient: Low cost modes (Boat, train)
Responsive: Fast modes (e.g. air)
Agile Supply Chain - ANSWER-mix of responsive and efficient supply chains.
Supply Chain Network Configuration - ANSWER-Centralized vs. Decentralized
Centralized Supply Chain - ANSWER-One...
-supplier
-manufacturer location
-warehouse
Then distribute
Advantages:
- lower total inventory
-Pooling effect (smaller safety stock req'd)
- higher availability
- higher shipping volume, (negotiating power)
- less complex
- easier to standardize
- Total cost?
Disadvantages:
- Higher shipping distances cost more
- less responsive
Decentralized Supply Chain - ANSWER-One supply chain per region.
Advantages:
-Fast
-shorter shipping distance = cheaper
Disadvantages:
- More cost..
- Higher inventory
- No pooling effect, more safety stock req'd
- low shipping volume = no volume cost benefit
- More complex
- hard to standardize
Decentralized with global supply - ANSWER-global supplier for each manufacturing facility
Centralized Manufacturing - ANSWER-Decentralized Supply, warehouse, and supply are networked.
One manufacturer location.
When is a Centralized Strategy Appropriate - ANSWER-Stable/predictable demand environment
low velocity
Need higher product availability
few points of sale(delivery points)
low cost per weight
high volume per shipment
low distribution complexity
**When a low cost (efficient) supply chain is needed.
When is a decentralized strategy appropriate? - ANSWER-unpredictable demand environment
high velocity
need lower product availability
many points of sale (delivery points)
high distribution cost per weight
low volume per shipment
high distribution complexity
**When a responsive (fast) supply chain is needed**
Push vs. Pull - ANSWER-Push: information flow is with material flow. Signal to produce more starts with raw material and pushes downstream
Pull: Information stream begins with customer and works backwards to raw material
Push System - ANSWER-Pro: Every worker maximizes own ouput, maximizing production
Con:
-Focus is on keeping people busy, not effective resource use
- volume of defective work
- increased work-in-process, increasing throughput time
-Bottlenecks and stocks of unfinished product
- Hard to respond to special orders and order changes(high throughput time)
Pull System: - ANSWER-*Kanban*
Pros:
- Controls work-in-process (WIP) and eliminates accumulation of WIP (bottlenecks)
- Keeps materials, not people busy
- Decreased throughput time -> Faster reaction to defects
Cons:
- No slack in system if a problem arises (if you can't get materials, you don't have a large inventory to work from).
Kanban - ANSWER-A Japanese word meaning "card" or "visible record" that refers to cards used to control the flow of production through a factory
Foundation of pull system.
Inventory is viewed as waste
Lean Philosophy - ANSWER-Elimination of waste.
5 Principles of Lean - ANSWER-1. Identify Value (customer value)
2. Map the Value Stream
a. Value Stream Mapping (VSM)
i. map product and info flows
ii. identify where no value added
iii. no value added = waste. Eliminate
3. Create Flow
a. clean/orderly manufacturing
4. Establish Pull
a. Lean is a pull system (Kanban)
5. Seek Perfection
a. Kanban
b. Blitz (improve operation/process)
S&OP - ANSWER-Sales and Operations Planning
Objective: Match Supply and Demand
Main Idea:
- Forecast sales. Design production schedule to support sales
- given aggregate sales, minimize total costs thru production, inventory, workforce planning
S&OP Supply Strategies - ANSWER-Hire and fire
Temporary workers
Overtime/cut hours
subcontract
Excess inventory (produce extra in lean times to levelize workload)
Large backlog (Catchup when lean)
Change production rates
S&OP Demand Strategies - ANSWER-Price Change
Promotions
Advertise
Bundle or package
Turn down orders
Pre-orders/reservations
EOQ - ANSWER-Economic Ordering Quantity:
EOQ = Q* = sqrt(2SD/H)
where:
S = Ordering Cost
D = Demand (units/yr)
H = annual holding cost per unit
ROP - ANSWER-ReOrder Point
ROP = average daily demand * Lead Time
(how many units you expect to sell during lead time so you don't run out).
Inventory Policy - ANSWER-Aggregate of EOQ and ROP.
- Monitor Inventory Level
- When inventory = ROP, place and order for Q* units
Bullwhip Effect - ANSWER-small changes in demand lead to more and less frequent large orders by the supplier, which intrun leads to larger fluctuations in the suppliers supplier.
Affects multi-echelon supply chain
E.g. Demand: 10, Retailer orders 15, Distributor orders 20, Manufacturer orders 40...
Bullwhip Causes - ANSWER-Price Fluctuations
Artificial demand sell-out that will not persist [Show Less]