Professional Documents
Culture Documents
Management
Supply-Chain Management
Chapter 11
11-1
Outline
Strategic Importance of the Supply-Chain.
Supply-Chain Strategies.
Purchasing & Acquisition.
11-2
Supply-Chain Management
Management of integrated activities that
procure materials,
11-3
The Supply-Chain
VISA
Credit Flow
Material Flow
Supplier
Supplier
Manufacturing
Supplier
Consumer
Retailer
Wholesaler
Schedules
Order
Flow
11-4
Retailer
Cash
Flow
Integration
Integrates operations, logistics, marketing,
accounting and finance.
Manage:
Transportation.
Suppliers.
Warehousing and distribution.
Inventory levels.
Information sharing.
$ and credit transfers.
Order fulfillment.
11-5
Supply-Chain Trends
Global sourcing and markets.
Supply-Chain Strategies
How best to work with upstream suppliers and
downstream distributors and customers.
Outsourcing:
Logistics activities (transportation, delivery,
inventory, etc.).
Information systems.
Accounting and payroll.
Vertical integration.
11-7
Vertical Integration
Produce a good or service previously purchased.
Forward (towards customers) or backwards (towards
supplier.).
Develop the capability independently or buy a firm.
Advantages:
May be less expensive than buying.
Provides more control.
Disadvantages:
Can be expensive.
Silicon
Backward
Integration
Steel
Automobiles
Integrated
Circuits
Distribution
System
Circuit Boards
Dealers
Computers
Watches
Calculators
11-9
Current
Transformation
Forward
Integration
Finished Goods
Importance:
Percent of Sales
All industry
Automobile
Food
Lumber
Paper
Petroleum
Transportation
52%
61%
60%
61%
55%
74%
63%
11-11
Make/Buy Considerations
Reasons for Making
Lower cost to produce.
Unsuitable suppliers.
Poor quality.
Price too high.
Item not available.
11-12
Supplier Strategies
Negotiate with many suppliers; play one supplier
against another.
Negotiated, sporadic small purchase orders.
Adversarial relationship with little openness.
Vendor development.
Negotiations.
Results in contract.
Service criteria
Financial stability.
Delivery on time.
Management.
Condition on arrival.
Location.
Technical support.
Training.
Product criteria
Quality.
Price.
11-15
11-16
Negotiation Strategies
Cost-based price model.
Competitive bidding.
11-17
Purchasing.
Inventory management.
Production control.
Inbound and outbound transportation.
Warehousing and stores.
Incoming quality control.
11-18
Operations
Management
E-Commerce and Operations
Management
Supplement 11
11-19
Outline
Electronic Commerce.
E-commerce Definitions.
B2B
B2C
C2C
C2B
E-Procurement
11-20
E-Commerce
The use of computer networks, primarily the
internet, to buy and sell products, services,
and information.
11-21
E-Business
all about cycle time, speed, globalization,
enhanced productivity, reaching new
customers and sharing knowledge across
institutions for competitive advantage.
Louis Gerstner,
Chairman, IBM
11-22
E-Commerce Definitions
Business-to business (B2B) - Both sides of the
transaction are businesses, non-profit
organizations, or governments.
Business-to-consumer (B2C) - Customers are
individual consumers.
Consumer-to-consumer (C2C) - Consumers sell
directly to each other.
Consumer-to-business (C2B) - Individuals sell
services or goods to businesses.
11-23
E-Procurement
On-line purchasing link buyers and sellers
electronically.
Catalogs.
Auctions.
Internet trading exchanges:
Spot purchasing.