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Chapter 11

Chapter 11 Textbook Summary

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Wilfrid Laurier University
Mark Wagner

WlunotescomChapter 11 Supply Chain Management Introduction Supply Chaina sequence of organizations that are involved in producing and delivering a product How suppliers manufacturers distributors and customers are linked togetherSupply Chain ManagementCollaboration and coordination of all components of the supply chain so that market demand is met as efficiently reduce costs and effectively timeliness and quality as possible The Need for Supply Chain Management 1 The need to improve operationsTQM and JIT and other cost saving practices have already reduced costs in most organizationsThere are still many cost savings to be realized in procurement distribution and logistics the supply chain2 Increasing level of outsourcingReducing costs and increasing quality by focusing on core activities and subcontracting othersOutsourcingBuying goods or services instead of producing them inhouseSuppliers may have lower cost more expertiseRisk in reduction in control and expertiseSome companies produce inhouse and outsource as a hedge or because they lack capacity 3 Increasing ecommerceIncreases in internet purchases require more and faster package deliverylogistics services 4 The need to manage inventories across the supply chainCoordination needed to reduce shortages and excesses of inventories in the chainBullwhip EffectDemand variability is progressively larger moving backward through a supply chainRetail sales are usually stable but demand at the wholesale level is more variableSupply Chain Activities 1 Strategic Design ActivitiesStrategic decisions have long term impacts on supply chainsFirst goals and competitive characteristics such as quality cost speed fill rate etc need to be determined by supply chain membersProducts are then designedredesigned with these goalsThen supply chains are designedredesigned to fit the competitive characteristicsThis involves determining location number capacity process types of facilitiesThe extent of vertical integration is also a strategic decision Customersupplier partnerships are becoming more popular 2 Tactical PlanningOperational Activities
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