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Supply chain management
idea of coordinating or integrating a number of product-related activities among supply chain participants to improve operating efficiencies, quality, and customer service in order to gain a sustainable competitive advantage for all of the collaborating organizations.
design, operation, and improvement of production systems that efficiently transform inputs into finished good and services, while maximizing productivity.
coordinated planning and execution of product distribution, transport, warehousing
process of obtaining services, supplies, and equipment in conformance with corporate regulations
Vertical integrated firm
a firm whose business boundaries include one-time suppliers and/or customers
taking over the role of your supplier
taking over the role of companies closer to the customer
free flowing, stored loose (coal, grain, rice, oil)
general or packaged cargo, typically containerized.
characteristics of both bulk and breakbulk cargo (cars, logs, steel)
use of more than one mode of transport during a single shipment
seamless multimodal shipment - no need to unload container or repackage products
used to fill empty space inside boxes, tubes, etc (packing peanuts, styrofoam)
in contact with the end item (plastic bag, can, bottle, shrink wrap)
contains end item and primary packaging (box, case, drum)
contains several items which are in secondary packaging (crate, pallet, metal straps)
third party logistics company
travel agents for exports
customs house brokers
help items clear foreign customs
What is VMI?
Vendor Managed Inventory - inventory system where supplier accepts negotiated responsibilities that typically include monitoring and restocking
Offshoring and Outsourcing quadrants
customs-trade partnership against terrorism
What is a process?
Any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer. Processes use an organization’s resources to provide definitive results.
What are the characteristics of a good process?
- Intentions and parameters were considered
- strives for reproducible results
- process is measurable and manageable
What are some of the primary considerations that should go into designing a good process?
- defined by customers
- corporate considerations
- operational concerns
What are some of the key steps important in building a good process?
- Identify objectives
- create block diagram of system
- define scope
- define the service
- consider performance metrics
- detail primary process steps
- develop process maps
What is the difference between a process map and a block diagram?
- Process map only shows what goes on in the process
- Block diagram shows what goes on before and after the process happens
What is a scope?
Where the processes begin and end
What is scope inflation?
as you learn more about the process, the scope gets larger - it becomes too much.
How are functional flowcharts different from basic flow charts?
Shows which stakeholder is responsible for each step
What are the different reasons poor processes exist?
- Market evolution
- Cow path theory - Development of poor processes
- Lack of appropriate tools
Why is an understanding of business process improvement important to professional careers?
- Resume builder: little stories about your career
- Corporate politics - leverage and capital
What are things GOOD consultants do?
- Get feedback
- Give good advice
- Collect data
- Understand group/team dynamics (culture)
- Understand business imperatives
What are some of the keys to Business Process Improvement?
- Desired state (objectives, goals, metrics)
- Present state (data collection)
- Gap analysis
- Develop project scope
- Collection and analysis
- Develop solutions and recommendations
- Develop an implementation plan
What is the seven step process for selling your recommendations?
- What does the client want?
- Do all stakeholders benefit?
- How difficult will the transition be?
- More value, less work?
- Worth the pain of change?
- What is the situation now vs desired?
- Step by step hand holding
What are the primary reasons people utilize metrics?
- statistical reference
What is a performance metric?
Single measurement used to evaluate, motivate, improve
What’s the difference between a single metric and a system of metrics?
Collection of measurements used to evaluate a process, person, company from multiple perspectives
What are some of the consequences of utilizing a poor system of metrics?
- inefficient systems
- Poor outcomes
- Low morale
What are the required characteristics of a good metric?
- Easily understood
What does a good system of metrics measure?
What are some keys to developing a good system of metrics?
- Have a plan
- Remember the basics
- Complete picture
- Continuous improvement
- Keep it simple
Why is leadership important in rolling out a new system of metrics?
If leaders aren’t interested, no one else will be
What does it mean if you have a redundant system of metrics?
Certain things are double counted
What is an Executive dashboard?
Gives executives a “snap shot” of key organizational process and system metrics
Why are executive dashboards useful tools in today’s business environment?
- Manage performance measurement data and allow users to “drill down” to see more details
- Help isolate problem areas and causes
What are the 4 perspectives of the balanced scorecard?
- Aligns vision
- customer expectations
- day-to-day operations management
What is the SCOR model?
Links sourcing needs of buyer with delivery operations of the seller
What are the 5 categories of the SCOR model?
What are some of the potential ingredients in a customer’s quality definition?
- Service Response
What are some key difference between product industries and service industries?
- Tangible vs intangible
- Services cannot be inventoried
- Location and hours of operation can be very important
- Services are usually produced and received simultaneously
- Services are highly visible
- Some services have very low barriers to entry/exit
What are the benefits of ISO 9000 certification?
- International certification
- recognized world-wide
How does a company become ISO 9000 certified?
Requires that you document your processes and employees
Malcolm Baldrige award
National quality award in America
Quality award in Japan
What is TQM?
- Total quality management
- management approach for an organization, centered on quality, aiming at long-term success through customer satisfaction
What are the three TQM principles?
- Customer (needs of today, desires for tomorrow)
- Involvement (communication, learning, teams, training)
- Continuous improvement culture
What are some of the keys to successful benchmarking?
- Identify process
- Identify leaders
- Contact leaders or plan internally
- Analyze, act, follow-up
What are the different types of benchmarking?
What are the basics of the Six Sigma program?
- Defect elimination
- Black belt program
- (used for existing processes)
- (used in designing NEW processes)
What’s the difference between true six sigma and Motorola Six Sigma?
- Doesn’t have the curve of a true 6 sigma - they just want the curve of a 6 sigma
- Motorola is more like 4.5 sigma
Cause and effect diagram
establishes correlation between two sets of data
Qualitative bar graphs
Quantitative bar graphs
tools for designing and documenting processes
What are the 4 costs of quality? (COQ)
- internal failure costs
- external failure costs
- appraisal costs
- prevention costs
Internal failure costs
costs related to fixing or throwing out defects
external failure costs
costs associated with “repairing” damage caused from delivering substandard items or services
Costs associated with finding causes of quality deficiencies
Costs related to reducing potential for quality problems
What are the requirements and goals of Business IT systems?
- Collect data from everyone
- Make data accessible to everyone
- Turn your data into information
What are the requirements and goals of SCM IT systems?
- Collect and store data
- Aid in planning and analysis
- Aid in execution
- Support other functions
- Facilitate supply chain compression
Supply chain compression
decreasing the length of the supply chain pipeline
What is ERP and what does it do
- collects and stores data for analysis, forecasts
- ALL business functions see/share same data - fast, immediate
What is the role of software?
- Turn your data into information
- Aid in knowledge creation
What are your options in terms of “Who do we buy from?”
- Single vendor approach
- Best of breed
What are some important things to consider before purchasing a new IT system?
- Standard or customized system
- Modules, support, upkeep, upgrades
What is included in the total cost of an IT system and implementation?
- Legacy systems
- Data conversion
- Integration and connectivity
- Implementation (Culture, learning, productivity concerns, relationships, testing)
What are some important things that must be considered before implementing a new IT system?
- Who do I buy from
- buy or lease
- off the shelf or customized
What is required from a supply chain to roll-out an RFID program?
- Integration tools (ERP)
- Local infrastructure (servers and software)
- RF readers (handheld scanners, portable readers, shelf-based readers)
- RF tags (Individual products, boxes, pallets, trucks)
What is RFA? What do they hope RFA will do?
- Radio Frequency Activation
- Retail applications - registers, shelves, replenishment
- Inventory tracking
- Theft management