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BA 552
GLOBAL SERVICE OPERATIONS/ LOGISTICS
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Syllabus
OFFICE: Strand Ag 310 Office Hours: Tuesdays 9:00-11:00 Thursdays 16:00-18:00 Required Materials: Simchi-Levi, D., Kaminsky, P. and Simchi-Levi, E., Designing and Managing the Supply Chain: Concepts, strategies and case studies, (3rd Edition, McGraw-Hill Irwin publishers, 2008) (hereinafter Simchi-Levi et al.). Supplementary readings in the form of articles from Harvard Business Review, tutorials, cases and other materials on global service operations will be distributed in class, available through OSU library, and/or on Blackboard. These are listed on the Assignments Schedule at the end of this syllabus.
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2. 3.
4. 5.
Analysis of Review Questions (3 individual written analyses, 15% of final grade) Class Participation (10% of final grade) Group presentation and reports (15% of final grade) Midterm Exam (30% of final grade) Final Exam (30% of final grade).
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McGraw-Hill/Irwin
Raw materials manufacturers Intermediate products manufacturers End product manufacturers Wholesalers and distributors and Retailers
Connected by transportation and storage activities Integrated through information, planning, and integration activities Cost and service levels
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Supply chain management is a set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system wide costs while satisfying service level requirements.
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SCM Definition
Material Flow
Supplier Source
Converter
Distributor
Retailer
Consumers
Value-Added Services Funds/Demand Flow Information Flow Reuse/Maintenance/After Sales Service Flow
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Key Observations
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Set of activities and processes associated with new product introduction. Includes:
product design phase associated capabilities and knowledge sourcing decisions production plans
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Variations over time Matching demand-supply difficult Different levels of inventory and backorders
Lean production/Off-shoring/Outsourcing
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Sales at U.S. Surgical Corporation declined 25 percent, resulting in a loss of $22 million Intel reported a 38 percent decline in quarterly profit EMC Corp. missed its revenue guidance of $2.66 billion for the second quarter of 2006 by around $100 million
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P&G coffee supplies from sites around New Orleans Six month impact
Losses of $1B/day Store stock-outs, factory shutdowns Supply interruptions of HP, Dell Supply interruptions for apparel manufacturers
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1950s
1960s
1970s
1980s
1990s
2000s
Beyond
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FIGURE 1-5: Total U.S. logistics costs between 1984 and 2005
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U.S. companies spend more than $1 trillion in supplyrelated activities (10-15% of Gross Domestic Product)
The grocery industry could save $30 billion (10% of operating cost) by using effective logistics strategies A typical box of cereal spends 104 days getting from factory to supermarket. A typical new car spends 15 days traveling from the factory to the dealership.
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Laptops and desktops were not available when and where customers were ready to buy them Raw material shortages, internal and supplier parts shortages.
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Transactional Complexity
National Semiconductors:
Production: Produces chips in six different locations: four in the US, one in Britain and one in Israel Chips are shipped to seven assembly locations in Southeast Asia. Distribution The final product is shipped to hundreds of facilities all over the world 20,000 different routes 12 different airlines are involved 95% of the products are delivered within 45 days 5% are delivered within 90 days.
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Manufacturer
Distributor
Retailer
Customer
$52.72
0%
Manufacturer
Distributor
Retailer
Customer
$41.34
28%
Manufacturer
Distributor
Retailer
Customer
$20.45
62%
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P&Gs estimated savings to retail customers of $65 million through logistics gains
Dell Computers outperforming of the competition in terms of shareholder value growth over more than two decades by over 3,000% using:
Wal-Mart transformation into the worlds largest retailer by changing its logistics system:
highest sales per square foot, inventory turnover and operating profit of any discount retailer
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