BUAD 831

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BUAD
831 Operations Management/Management Science
Supply Chain - Inventory Management
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8-1 A Typical Supply Chain- Manufacturing
Ma n u f a c t u r i n g
D i s t r i b u t o r
Supplier
R e t a i l e r
Cu s t om e r
S t o r a g e
S t o r a g e
Supplier
Supplier
Supplier
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8-2 A Typical Supply Chain- Service
Supplier
Cu s t om e r
S t o r a g e
S e r v i c e
Supplier
Supplier
Supplier
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8-3 Bullwhip Effect
Supplier Inventory Increase
Producer Inventory Increase
Distributor Inventory Increase
Demand Increase
Supplier
Producer
Distributor
Customer
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8-4 Needs for Supply Chain Management
?? Improvement of Operations Function
?? Lean Production
?? TQM
?? Increased levels of outsourcing
?? Increasing transportation costs
?? Competitive pressures
?? Faster product development cycles
?? Increased demands for customization
?? Increased globalization
?? Increased importance of E-commerce
?? The need to manage inventories
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8-5 Decision Levels for Supply Chain Management
Strategic Issues
?? Capacity Decisions
?? Make - Buy Decisions
?? Number and Location of Facilities
?? Strategic Alliances
Tactical Issues
?? Inventory Policy
?? Purchasing Policy
?? Production Policy
?? Shipping Policy
?? Quality Policy
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8-6 Supply Chain Performance Metrics
Reliability
?? On-time delivery
?? Order fulfillment lead time
?? Fill rate
Utilization
?? Total inventory days of supply
?? Inventory velocity
?? Cash to cash cycle time