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How can organizations benefit from studying procurement?
Materials requirement, procurement of services
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How can organizations benefit from studying operations?
- waiting lines
- customer service processes
- capacity issues
- operational maintenance and services
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How can organizations benefit from studying logistics?
- movement of stock
- storage
- packaging issues
- delivery of orders
- customer movements
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When developing a layout, what are some important considerations?
- customer flow (how customers navigate)
- product location (planograms, perimeter vs central, aisles)
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Facilitating goods
physical items that make it possible to deliver the service
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What is VMI?
Vendor Managed Inventory - inventory system where supplier accepts negotiated responsibilities that typically include monitoring and restocking
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Challenges of entering VMI agreements?
- Goal alignment
- process related (different way of getting things done)
- performance and quality
- people related
- IT compatibility
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Priority Rule
determines which customer to serve next
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finite
few potential customers
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infinite
many potential customers
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balking
to refuse the line
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reneging
being in line, then leaving because of a long wait
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jockeying
customers move from line to line in hopes they will receive quicker service
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Basic responsibilities of supply chain
- meet customer demand
- contribute to profitability
- continuous improvement
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front-end
things the customer can see
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back-end
things the customer cannot see
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upstream or downstream
the direction in which materials might be flowing
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pull system
products are based off of customer demand
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push system
products are pushed to the customer
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old school american
- push strategy
- high inventory needed
- suppliers are adversaries
- silo mentality
- company dictates what market will offer
- best is always best
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JIT systems
- eliminate waste
- inventory is evil
- open communication is required
- flexible HR required
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postponement
- PUSH through the standardized portions of manufacturing
- PULL only the customization options offered to customers
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Pros of centralizing warehouses
- lower required stock levels
- less likely to stock out
- warehouse operating costs decrease
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Cons of centralizing warehouse
- distance/responsiveness
- transportation costs
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square root rule
√(Warehouses planned)/√(Present # of warehouses) * (Total stock present system) = total stock needed proposed system
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bullwhip effect
very high and very low supply levels despite fairly constant demand levels
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causes of bullwhip
- poor forecasting
- order batching
- price fluctuations
- rationing
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how can globalization open opportunities for increased profits?
- Increase revenue
- decrease costs
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strategic issues of expanding globally
- competition
- legal issues
- exchange rates
- information management
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SCM related positives/negatives with expansion strategies
- closer/further from supplies
- closer/further from customers
- cheaper/expensive overhead
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EMS
Electronic Manufacturing Services - companies that can take on numerous primary supply chain responsibilities associated with the manufacturing of electronic components assembled end-items
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benefits of EMS
- cost advantages
- higher quality
- higher flexibility
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challenges of procuring products and services at global level?
- certification of suppliers and maintenance providers
- developing relationships (trust, negotiate)
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C-TPAT
customs-trade partnership against terrorism
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tier 1 of C-TPAT
must perform risk analysis
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tier 2 of C-TPAT
validated tier 1 findings by US customs
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tier 3
Green lane - follow supply chain best practices
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Challenges of C-TPAT
- cost to integrate IT
- risks of sharing info with the gov.
- HR issues (background checks, training, education)
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Benefits of C-TPAT
- get through customs very quickly
- disasters averted
- safety
- cost of container inspections
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types of companies hurt by increase of oil prices
- retailers
- JIT companies
- fresh produce industry
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