Quality Management Managing the Supply Chain Chapter 8

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

Companies dont compete against other companies; they compete against each others supply chains.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

A supply chain is the network of organizations involved in the movement of materials, information, and money as raw materials flow from their source through production until they are delivered as a finished product or service to the final customer.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

Who are the participants in supply chains?
Multiple suppliers Wholesalers Manufacturers warehouses Distribution centers Retailers Customers
Summers: Quality Management, 2nd. ed. 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

What drives supply chains?
Money Materials Information

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

Supply chain design should consider:
The products travelling the supply chain The services travelling through the supply chain The information travelling through the supply chain The structure of the supply chain How each segment of the supply chain be managed and optimized
Summers: Quality Management, 2nd. ed. 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

What are the benefits of effective supply chains?
Effective supply chains optimize the value creation process by improving processes, implementing lean principles, optimizing asset allocation, and monitoring quality assurance.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

The critical elements of supply chain management are:
Inventory management Information sharing E-commerce Logistics, Purchasing

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

Why is information sharing critical when creating an effective supply chain?
organizations need to know what is needed, how much, and when.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

How does e-commerce support supply chain management?
Faster purchasing cycle times Reduced inventory Fewer order processing people Faster product or service search and ordering Greater information availability Automated validation and pre-approved spending Less printed material like order forms or invoices Increased flexibility On-line communication
2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Summers: Quality Management, 2nd. ed.

Managing the Supply Chain

What is logistics?
Logistics is the process of determining the best methods of procuring, maintaining, packaging, transporting, and storing materials and personnel in order to satisfy customer demand.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

What role does purchasing play in supply chain management?
Purchases are driven by several factors, including quality of the goods or services, timing of the deliveries of the goods or services, and the costs associated with purchasing the goods or services.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Managing the Supply Chain

What challenges face the development of an effective supply chain?
Synchronization Fluctuations in demand Long supply chains Great distances between supply chain members Lack of communication Lack of information sharing
Summers: Quality Management, 2nd. ed. 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved