School Stuff (2014)


School Stuff



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Chapter 8 What is logistics? Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements. Components: Transportation Warehousing / Location Packaging Material handling Logistics information systems Inventory management Logistics service providers Why the interest in logistics? Government policy and deregulation of transportation industries Globalization (shrinking world) Technological breakthroughs Financial and Performance impacts Logistics: Transportation • Highway (truck) – most widely use • Water – international trade (81%) • Rail – carries wide variety of products • Air – highest rates/fastest/flexible • Pipeline – limited use Logistics: Warehousing Any operation that stores, repackages, stages, sorts, or centralizes goods or materials. Logistics strategies A functional strategy ensures that an organization’s logistics choices are consistent with its overall business strategy. Reverse logistics A complete supply chain dedicated to the reverse flow of products and materials for the purpose of returns, repair, remanufacture, and/or recycling (take-back) CHAPTER 6 What is Capacity? Capacity is a measure of a worker, machine, work center, plant, or organization to produce goods and services in a given time period. Examples: Jiffy Lube… Oil changes per hour Law firm…Billable hours available each month Machine…Units per minute Automobile factory…Cars per day Factors that affect capacity Numbers of shifts run, production lines, temporary workers available, on-call subcontractors, etc. • Product complexity, mix, and design stability – More Engineering Change Notices (ECNs) = more disruptions = lower capacity • Component and assembly conformance quality – Lower quality = more disruptions = lower capacity • Supplier capacity and delivery reliability • Process and equipment reliability – More breakdowns = more disruptions = lower capacity Theoretical Capacity The maximum output capability, allowing for no adjustments for preventative maintenance, unplanned downtime, etc. 3 shifts / 7 days a week for short period of time. Rated Capacity The long-term expected output capability of a resource or system. Supply chain considerations of capacity A firm’s ability to use its own capacity is often directly dependent on capacity up and down the supply chain. Tactical Capacity Workforce, inventory, subcontracting decisions Intermediate-level planning Moderate risk Strategic Capacity “Bricks & mortar” decisions High-level planning High risk Three capacity strategies Lead Capacity Strategy (May lose money due to excess): A capacity strategy in which capacity is added in anticipation of demand. Lag Capacity Strategy (Lose customers due to demand): A capacity strategy in which capacity is added only after demand has materialized. Match Capacity Strategy (Capacity very close to actual demand): A capacity strategy that strikes a balance between the lead and lag capacity strategies by avoiding periods of high under or overutilization. Excess demand Improve process efficiency Improve product producibility Add equipment and personnel Backorder Raise prices Turn away business Excess Capacity(worse) Lower prices Advertise Idle equipment and/or personnel Make product changes to attract the market Build to stock Evaluating capacity alternatives through BEP CHAPTER 7 Definition of supply management: The broad set of activities carried out by organizations to analyze sourcing opportunities, develop sourcing strategies, select suppliers, and carry out all the activities required to procure goods and services. Why it is critical? The Changing Global Competitive Landscape Financial Impact Performance Impact Purpose of spend analysis: It is the application of quantitative techniques to purchasing data in an effort to better understand spending patterns and identify opportunities for improvement. Insourcing / Outsourcing decision • Insourcing – The use of resources within the firm to provide products or services • Outsourcing – The use of supply chain partners to provide products or services Planning and Control: A set of tactical and execution level business activities that includes master scheduling, material requirements planning and some form of production activity control and vendor order management. Material Requirements Planning • List of components & quantities needed to make product • Provides product structure (tree) • Shows low-level coding The definition of inventory and examples Safety inventory and Cycle stock What is EOQ? The order quantity that minimizes annual holding and ordering cost for an item.


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