Logistics MANAGEMENT - Supply Chain management - Presentation, Study notes of Managerial Economics

Download Logistics MANAGEMENT - Supply Chain management - Presentation and more Study notes Managerial Economics in PDF only on Docsity! Chapter 12 Supply Chain Management Network of Suppliers warehouses, operations, warehouses, distribution centers, retail outlets, and customers. Supply Chain Purchasing Receiving Storage Operations Storage Production Distribution Purchasing Purchasing is responsible for obtaining the materials, parts, and supplies needed to produce a product or provide a service. The importance of purchasing is more than just cost of material purchased, but also quality and timing. Purchasing Legal AccountingOperations Data processing Design Receiving Suppliers Purchasing Interfaces Purchasing Interfaces Purchasing is the connecting link between the organization and its suppliers. Operating units are the main sources of request for purchase. Close relationship between purchasing and operating units is required to achieve proposed quality, quantity, and timing. Changes in specifications, quantities and lead times should be immediately communicated between operating units and purchasing. Assistance of the legal department is required in bid specifications and contract negotiations Accounting is responsible for A/P, must be notified when material are received. Purchasing Legal Account- ing Opera- tions Data process- ing Design Receiv- ingSup- pliers • Value analysis – Examination of the function of purchased parts and materials in an effort to reduce cost and/or improve performance • Outsourcing – Buying goods or services from outside sources rather than making or providing them in-house Value Analysis vs Outsourcing • Cost to make vs. cost to buy • Stability of demand • Quality from suppliers • Maintaining close control • Idle capacity available Outsourcing • Fixed or predetermined prices – for standards items that are bought frequently • Competitive bidding – for large orders of standard parts, e.g. government purchases of standard goods or services • Negotiating – for one or few customized purchases where specifications are vague Determining Prices • Movement material to-within-from facility • Material includes row material, components, finished goods, supplies, etc. • Logistics indeed is physical flow of material in supply chain Logistics R E C E IV IN G Storage Work center Work center Work center Storage Work center Storage Shipping Material Movement Determine which shipping alternative, 1 day or 3 days is preferred. Holding cost is 1000 per year, shipping cost is 40 $ for 1 day delivery, and for 3 days delivery is a) 35 $ b) 30 $ Holding cost for two days is (1000/365)2 = 5.48 If 1 day delivery is 35, then 35-30 = 5 extra cost, while saving is 5.48. We prefer 1 day delivery Shipping Alternatives Bar coding or universal product codes (UPC); patterns of black lines and white spaces that can be read by scanning devices, containing a variety of information. Bar codes are used for recording prices and quantities, printing sales receipts, and updating inventory records. Enable companies to keep track of items in warehouses, throughout the production and en route to customers 0 214800 232087768 Bar Coding • EDI is the intra-organization transmission of transactions. Transactions such as purchase orders, shipping notices, debit or credit memos are transmitted from computer to computer between organizations. • EDI also serves as Kanban between down stream (customers) and upstream (suppliers) of manufacturing and service systems. • EDI allows manufacturers to have better understanding of their customer behavior and preferences. Electronic Data Interchange (EDI) • Wal-Mart has a satellite network for electronic data interchange that allows vendors to directly access point- of-sale data in real time. Enabling them to improve their forecasting and inventory management. The system is also used for issuing purchase order and receiving orders from vendors. Electronic Data Interchange (EDI)