CHAPTER 10SUPPLY CHAIN STRATEGY.ppt

CHAPTER 10SUPPLY CHAIN STRATEGY Supply Chain Strategy Supply chain management Competitive advantage Aligning product and supply chain strategy Supply Chain A supply chain represents all the stages at which value is added in producing and delivering a product or service from suppliers (and their suppliers) to customers (and their customers). Supply Chain Management Supply chain management is the coordination of the following functions and activities along the supply chain: Planning and managing of supply and demand Acquiring material Warehousing Inventory control and distribution Producing and scheduling the product or service Delivery and customer service Supply Chain Database and Planning Supply Chain Management and Competitive Advantage Competitive advantage may be obtained with a total systems approach to managing flow of information, materials and services along the supply chain Investment in Supply Chain High profit margin (high tech products) Reduce stockout Invest in reducing lead time along the supply chain Low profit margin (staple products) Reduce cost Increase resource utilization, minimize inventory, select vendors on the basis of cost and quality, design products that can be produced Matching Supply Chain with Products CHAPTER 11STRATEGIC CAPACITY MANAGEMENT Strategic Capacity Management Capacity Planning issues Capacity additions Determining capacity requirements Capacity Output over a certain time period Peak? Average? Design capacity? Best operating level Design capacity, minimum average cost Capacity utilization Planning Issues Economies and Diseconomies of scale Advantage and disadvantage of capacity Learning curve Another advantage of capacity Focussed factories A strategy to remove the disadvantage of capacity Capacity flexibility A strategy to deal with demand uncertainty Economies and Diseconomies of Scale Learning Curve Processing time per unit Yx = Kxn where x = Unit number Yx = time required for the xth unit K = ti