MNP3701_ Strategic Sourcing_ 2nd Semester Exam Preparation.

MNP3701_ Strategic Sourcing_ 2nd Semester Exam Preparation. Supply Chains and Value Chains  Supply chain orientation – a higher level recognition of the strategic value of managing operational activities and flows within and across a supply chain  Value chain – primary and secondary support activities that can lead to competitive advantage  Supply chain – a set of 3 or more organizations linked directly by 1 or more of the upstream or downstream flows of products, services, finances, and information from a source to a customer (subset of a value chain) The Extended Value Chain Supply Chain vs. Value Chain  Supply chain management – endorses a supply chain orientation and involves proactive management of the 2-way movement and coordination of goods , services, information, and funds from raw material through end user Cereal Value Chain Example “Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it is destined for mediocrity.” Donald Trump Page | 5 Critical SCM Processes  New product development  Customer-order fulfillment  Supplier evaluation and selection  Demand and supply planning The Supply Chain Umbrella  Purchasing  Inbound transportation  Quality control  Demand and supply planning  Receiving, materials handling, and storage  Material or inventory control  Order processing  Production planning, scheduling, and control  Warehousing/distribution  Shipping  Outbound transportation  Customer service “Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it is destined for mediocrity.” Donald Trump Page | 6 Capable Human Resources  Supplier relationship management  Total cost analysis  Purchasing strategies  Supplier analysis  Competitive market analysis Proper Organizational Design  Assessing and selecting the structure and formal system of communication  Division of labor  Coordination  Control  Authority  Responsibility Real-Time and Shared IT Capabilities  Supply chain planning  Forecast accuracy  Optimized production scheduling  Reduced working capital costs “Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it is destined for mediocrity.” Donald Trump Page | 7  Shortened life cycles  Reduced transportation costs  Improved customer service  Supply chain execution  Obtaining materials  Managing physical flows Emerging SCM Technologies  Global positioning systems  Internet-based systems  Bar codes  Radio frequency identification devices  Wireless devices Roadblocks to Measurement Systems  Too many metrics  Debate over the correct metrics  Constantly changing metrics  Old data Why Is Measurement Important?  Supports fact-based decision making  Communicates requirements through the supply chain  Improves future supplier performance  Recognizes outstanding performance  Links critical measures to desired outcomes  Determines if initiatives are working Evolution of Purchasing and SCM  The early years: 1850 – 1900  Growth of purchasing fundamentals: 1900 – 1939  The war years: 1940 – 1946  The quiet years: 1947 – mid-1960s  Materials management comes of age: mid-1960s – Late 1970s  The global era: Late 1970s – 1999  Integrated supply chain management: beyond 2000 “Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it is destined for mediocrity.” Donald Trump Page | 8 The Purchasing Process - Chapter 2 Chapter Overview  Purchasing objectives  Responsibilities of purchasing  E-procurement and the procure to pay process  Types of purchases  Improving the purchasing process Elements of the Purchasing Process  Identify user requirements  Evaluate need effectively and efficiently  Identify suppliers  Ensure payment occurs promptly  Ascertain that the need was effectively met  Drive continuous improvement “Watch, Listen and Learn. You cannot do it all yourself…..anyone who thinks they do it is destined for mediocrity.” Donald Trump Page | 9 Purchasing Objectives  Supply continuity  Manage the purchasing process efficiently and effectively  Develop supply base management  Develop strong relationships with other functional stakeholders  Support organizational goals and objectives  Develop integrated purchasing strategies that support organizational strategies Supply Continuity.