MGT 3070 Study Guide - Midterm Guide: Enterprise Resource Planning, Supplier Relationship Management, Business Continuity Planning
Chapter 1: Introduction to Purchasing and Supply Chain Management
VALUE CHAIN
Primary and support activities can lead to a competitive advantage when configured properly.
Results in the total value added by the firm.
SUPPLY CHAIN
Three or more organizations linked by one or more of the upstream or downstream flows of products,
services, finances, and information from source to customer.
SUPPLY CHAIN ORIENTATION
Strategic value of managing operational activities and flows within and across a supply chain.
OPERATIONS MANAGEMENT(OM)
Operations management refers to activities involved in the conversion of raw materials and other input
resources into final goods and services
SUPPLY CHAIN MANAGEMENT
Management of the coordination (both upstream and downstream) of goods, services, information, and
funds from raw materials through to the end user.
Set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores so that
merchandise is produced and distributed in the right quantities, to the right locations, in the right
conditions, and at the right time to minimize the system wide costs while satisfying the service level
requirements.
OPERATIONS MANAGEMENT VS SUPPLY CHAIN MANAGEMENT
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SUPPLY BASE
• All of the suppliers that provide the organization with materials and services.
• Effective management can produce a competitive advantage
• Downstream
• Upstream
COMPETITIVE ADVANTAGE
Increasing Value and Savings
Cost Efficiency
Building Relationships and Innovation
Product Differentiation
Improving Quality and Reputation
Reducing Time to Market
Supplier integration in product and process design
Managing Supplier Risk
Late Delivery, Product Quality, Bankruptcy, Natural Disaster, Legal and Political Risk
Generating Economic Impact
Market Impacts
SUPPLY CHAIN UMBRELLA
Purchasing, Inbound Transportation, Quality Control
Demand and Supply Planning, Receiving, Material Handling, and Storage
Materials or Inventory Control, Order Processing, Production Planning, Scheduling, and Control
Shipping/Warehousing/Distribution, Outbound Transportation, Customer Service
FOUR ENABLERS OF SCM
Human Resources
• Attract qualified personnel, Training and development, Retention
Organizational design
• Relationship w strategy, Communication, Coordination, Control, Responsibility
Measures and measurements
• What to measure?, Process to measure?, Accessible Data?
Technology
• Cloud based storage, Mobile devices, Shared platforms, RFID
Chapter 2: Supply Chain Evolution
THE EARLY YEARS (1850-1900)
Charles Babbage
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“Materials Man”; Selects, purchases, receives, and delivers all articles required
American Railroads
• Major force in the economy, Movement of goods from the eastern markets to the west
• Chief Purchasing Manager
Major Contributions
• Purchasing importance in corporate profitability
• Organization and centralization of purchasing department
GROWTH OF PURCHASING FUNDAMENTALS (1900-1939)
• Purchasing importance outside of railroad industry
• Need for qualified personnel, Materials specifications
• The Book on Buying
• World War I (Importance placed on procurement of raw materials)
THE WAR YEARS (1940-1946)
World War II
• Scarce Materials, Other depts recognized importance of purchasing dept in sourcing
THE QUIET YEARS (1947-MID1960’S)
Studies on using staff to collect, Analyze, and present data for purchasing decisions.
Ford Motor Company
• Commodity research department, Purchase Analysis Department
Value Analysis Technique
• General Electric 1947
• Designed products with specifications that would reduce materials costs
Important elements for purchasing were not present:
• Stable competition, Access to resources and materials
• Focus on satisfying demand and growing industry
MATERIALS MANAGEMENT COMES OF AGE (MID 1960’S-LATE1970’S)
Dramatic Growth of materials management
Combined functions:
• Materials & Procurement Research, Purchasing, Inventory Planning & Control
Shipping & Receiving, Materials Planning & Control, Stores, Material Movement
Surplus Disposal
Vietnam War
• Increased prices, Reduced availability of materials
Oil Shortages
• solve materials problems from a total system perspective
• Use of Multiple sourcing through competitive bidding
THE GLOBAL ERA (LATE 1970’S-1999)
Economic Recession (early 1980s), Foreign Global Competition
Intense competition, Global firms captured world markets using new innovative strategies, Rapid
Technological change, Worldwide purchasing using (intranets)
Started to view SCM as a way to manage costs
INTEGRATED SUPPLY CHAIN MANAGEMENT (2000-TODAY)
Importance on Suppliers, Supplier Relationship Management (SRM)
Cooperative Approaches, Enterprise Resource Planning (ERP) – Cloud Storage and sharable
databases
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Document Summary
Chapter 1: introduction to purchasing and supply chain management. Primary and support activities can lead to a competitive advantage when configured properly. Results in the total value added by the firm. Three or more organizations linked by one or more of the upstream or downstream flows of products, services, finances, and information from source to customer. Strategic value of managing operational activities and flows within and across a supply chain. Operations management refers to activities involved in the conversion of raw materials and other input resources into final goods and services. Management of the coordination (both upstream and downstream) of goods, services, information, and funds from raw materials through to the end user. Supply base: all of the suppliers that provide the organization with materials and services, effective management can produce a competitive advantage, downstream, upstream. Late delivery, product quality, bankruptcy, natural disaster, legal and political risk. Demand and supply planning, receiving, material handling, and storage.
