Supply chain management: strategy, planning, and operation / Sunil Chopra Sunil Chopra is the IBM Distinguished Professor of Operations Management and. Discover more publications, questions and projects in Supply Chain Management. Supply Chain Management: Strategy, Planning and Operation (3rd edition)Sunil Chopra and Peter M Book Review: How to Organize and Operate a Small BusinessBaumbackC., LawyerK., riastanufulthep.ga to. Supply Chain Management - Chopra/Meindl - Download as Word Doc .doc /. docx), PDF Download as DOCX, PDF, TXT or read online from Scribd Sunil. Chapter 1. WHAT IS A SUPPLY CHAIN Consists of all parties involved, directly or .
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Full file at riastanufulthep.ga -Test-Bank Supply Chain Management, 5e (Chopra/Meindl) Chapter 2 Supply. Sunil Chopra and Peter Meindl have recently updated their Supply Chain Management book (2. edition published by Prentice Hall). The new edition is more. Sunil Chopra and Peter Meindl. Prentice Hall, Inc., , pages, ISBN: With the growth of new products and markets, the supply chain.
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Hit a particularly tricky question? Bookmark it to easily review again before an exam. The best part? What are the core competencies of your company? How does your company make money? The answers to these questions tell you what roles in a supply chain will be the best fit for your company.
Be aware that your company can serve multiple markets and participate in multiple supply chains. A company like W. Grainger serves several different markets.
These two different markets have different requirements as measured by the above customer attributes. When you are serving multiple market segments, your company will need to look for ways to leverage its core competencies. Parts of these supply chains may be unique to the market segment they serve while other parts can be combined to achieve economies of scale.
For example, if manufacturing is a core competency for a company, it can build a range of different products in common production facilities. Then different inventory and transportation options can be used to deliver the products to customers in different market segments. Develop Needed Supply Chain Capabilities Once you know what kind of markets your company serves and the role your company does or will play in the supply chains of these markets, then you can take this last step, which is to develop the supply chain capabilities needed to support the roles your company plays.
This development is guided by the decisions made about the five supply chain drivers. Each of these drivers can be developed and managed to emphasize responsiveness or efficiency depending on the business requirements. Production—This driver can be made very responsive by building factories that have a lot of excess capacity and that use flexible manufacturing techniques to produce a wide range of items.
To be even more responsive, a company could do their production in many smaller plants that are close to major groups of customers so that delivery times would be shorter. If efficiency is desirable, then a company can build factories with very little excess capacity and have the factories optimized for producing a limited range of items. Further efficiency could be gained by centralizing production in large central plants to get better economies of scale.
Inventory—Responsiveness here can be had by stocking high levels of inventory for a wide range of products. Additional responsiveness can be gained by stocking products at many locations so as to have the inventory close to customers and available to them immediately.
Efficiency in inventory management would call for reducing inventory levels of all items and especially of items that do not sell as frequently. Also, economies of scale and cost savings could be gotten by stocking inventory in only a few central locations.
Location—A location approach that emphasizes responsiveness would be one where a company opens up many locations to be physically close to its customer base. Efficiency can be achieved by operating from only a few locations and centralizing activities in common locations. An example of this is the way Dell serves large geographical markets from only a few central locations that perform a wide range of activities.
Transportation—Responsiveness can be achieved by a transporta- tion mode that is fast and flexible. Many companies that sell products through catalogs or over the Internet are able to provide high levels of responsiveness by using transportation to deliver their products, often within 24 hours.
FedEx and UPS are two companies who can provide very responsive transportation services. Efficiency can be emphasized by transporting products in larger batches and doing it less often. The use of transportation modes such as ship, rail, and pipelines can be very efficient. Transportation can be made more efficient if it is originated out of a central hub facility instead of from many branch locations.
Information—The power of this driver grows stronger each year as the technology for collecting and sharing information becomes more widespread, easier to use, and less expensive. Information, much like money, is a very useful commodity because it can be applied directly to enhance the performance of the other four supply chain drivers. High levels of responsiveness can be achieved when companies collect and share accurate and timely data generated by the operations of the other four drivers.
The supply chains that serve the electronics markets are some of the most responsive in the world. Companies in these supply chains from manufacturers, to distributors, to the big retail stores collect and share data about customer demand, production schedules, and inventory levels. Where efficiency is more the focus, less information about fewer activities can be collected.
Companies may also elect to share less information among themselves so as not to risk having that information used against them.
Please note, however, that these information efficiencies are only efficiencies in the short term and they become less efficient over time because the cost of information continues to drop and the cost of the other four drivers usually continues to rise.
Over the longer term, those companies and supply chains that learn how to maximize the use of information to get optimal performance from the other drivers will gain the most market share and be the most profitable.
He is also co-author of Supply Chain Management: Strategy, Planning, and Operation, a definitive and widely recognized source book in the field. Wal-Mart and Dell Computers are two companies that have risen to prominence using a business strategy that offers low prices as a key selling point to their customers.
This strategy requires that their supply chains be highly efficient in order to generate the cost savings needed to make a profit at the low prices they offer. Professor Chopra has followed these two companies and offers an analysis of how they have aligned their supply chains to support their business strategies.
Wal-Mart took a supply chain approach and would not even open a store in an area unless they determined that the area could support a distribution center DC and a sufficient number of stores to gain scale economies at the DC.
Then they targeted specific business operations from which to get efficiencies.
They began to replenish stores two times a week where their competition was replenishing two times a month. They also said that they would own and control their own trucks and their computer systems because these were the two assets that they used to make their supply chain so efficient.
They invested heavily in information technology and trucks—they bought a fleet of trucks. They made these into core competencies of the company. Their roots were as a direct sales company but then in the early 90s they tried to sell through retail stores and almost went broke. That drove them back to the direct model and they have not strayed since.
Customers know what they want and they also want a good price. They can support this strategy because they enjoy economies of scale and postpone assembly.
They use a few large facilities to assemble PCs, they assemble to order and not to stock so inventory is kept very low. In a high change technology market they do not get stuck with obsolete inventory. Their shipping costs are high but there is enough profit margin to cover that. But what if the PC market is on the verge of standardization?
The higher up we get in PC performance levels, the less the value of the next incremental improvement in performance. Build to stock and position inventory close to the customers via retail stores becomes a better model. Markets change and as they do, businesses need to reevaluate their business model and their strategy. Supply chain management is the coordination of production, inventory, location, and transportation among the participants in a supply chain to achieve the best mix of responsiveness and efficiency for the market being served.
The goal of supply chain management is to increase sales of goods and services to the final, end use customer while at the same time reducing both inventory and operating expenses. Each company now focuses on its core competencies and partners with other companies that have complementary capabilities for the design and delivery of products to market.
Supply chain performance is now a distinct competitive advantage for companies who excel in this area.
One of the largest companies in North America is a testament to the power of effective supply chain management. Wal-Mart has grown steadily over the last 20 years and much, if not most, of its success is directly related to its evolving capabilities to continually improve its supply chain. The purpose of this chapter is to provide some useful models of the business operations that make up the supply chain.
These drivers can be thought of as the design parameters or policy decisions that define the shape and capabilities of any supply chain. As a way to get a high level understanding of these operations and how they relate to each other, we can use the supply chain operations research or SCOR model developed by the Supply-Chain Council Supply Chain Council Inc.
This model identifies four categories of operations. We will investigate three operations in this category in some detail: demand forecasting; product pricing; and inventory management.
Source Operations in this category include the activities necessary to acquire the inputs to create products or services. We will look at two operations here. The first, procurement, is the acquisition of materials and services.
The second operation, credit and collections, is not traditionally seen as a sourcing activity but it can be thought of as, literally, the acquisition of cash. Both these operations have a big impact on the efficiency of a supply chain. Make This category includes the operations required to develop and build the products and services that a supply chain provides. Operations that we will discuss in this category are: product design; production management; and facility and management.
The SCOR model does not specifically include the product design and development process but it is included here because it is integral to the production process. These two operations constitute the core connections between companies in a supply chain. The rest of this chapter presents further detail in the categories of Plan and Source. There is an executive level overview of three main operations that constitute the Planning process and two operations that comprise the Sourcing process.
Chapter 3 presents an executive overview of the key operations in Making and Delivering. Paper Enterprises www.
They are based in the Bronx and serve the entire New York metropolitan area. Herb Sedler founded the company in His son Jordan has been working in the business for over 23 years. Success in a market like New York City calls for a company to be adept at maintaining high levels of customer service while also operating as efficiently as possible.
You learn to bring him a doughnut and coffee. Paper Enterprises straddles both worlds. We became a re-distributor who could buy in bulk from manufacturers and resell to all the smaller operators.
But it is the relentless dedication to satisfying the customer that ultimately pays off. And the equipment you use has to fit the terrain. Imagine trying to back an 18 wheeler into a loading dock across four lanes of traffic with pedestrians crossing back and forth. In New York it is often just not available and when it is available it costs way too much.
Also in this city there is an interesting situation that you have when it comes to people. We hire people from many different ethnic and cultural backgrounds and there is a cliquish tendency in the employees from each of these cultures.
It is a real trick to keep these cliques from distracting people and undermining the company environment. How can we use technology to lower costs in inventory control, warehouse management, and order fulfillment?