...Lean Supply Chain Management Principles and Practices Professor Deborah Nightingale October 3, 2005 Lean Supply Chain Management Learning Points • Lean supply chain management represents a new way of thinking about supplier networks • Lean principles require cooperative supplier relationships while balancing cooperation and competition • Cooperation involves a spectrum of collaborative relationships & coordination mechanisms • Supplier partnerships & strategic alliances represent a key feature of lean supply chain management ESD.61J / 16.852J: Integrating the Lean Enterprise Page 2 © Deborah Nightingale, 2005 Massachusetts Institute of Technology Theory: Lean Represents a “Hybrid” Approach to Organizing Interfirm Relationships • “Markets” (Armʼs Length): Lower production costs, higher coordination costs • • • Firm buys (all) inputs from outside specialized suppliers Inputs are highly standardized; no transaction-specific assets Prices serve as sole coordination mechanism • “Hierarchies” (Vertical Integration): Higher production costs, lower coordination costs • • Firm produces required inputs in-house (in the extreme, all inputs) Inputs are highly customized, involve high transaction costs or dedicated investments, and require close coordination • “Lean” (Hybrid): Lowest production and coordination costs; economically most efficient choice-- new model • • • Firm buys both customized...
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...Quantitative Methods in Logistics & Supply Chain Management | Project Report | Institute of business management | Supply chain issues at Martin Dow Limited | Contents [ No table of contents entries found. ] [ No table of figures entries found. ] 1. INTRODUCTION Managing the flow of goods and services is the art of Supply Chain Management (SCM), which includes the movement and storage of raw materials, work-in-process inventory, and finished goods from the originating point to the point of consumption. It is the oversight of movement of finances, information, and materials from supplier to manufacturer to wholesaler to retailer to consumer. SCM integrates and coordinates these flows both within a company, and among different companies. A component of SCM is Logistics management that plans, implements, and controls the effective movement and storage of goods, services and related information from origin to destination. Logistics department helps companies in reducing expenses and enhancing customer service. The company selected in order to analyze potential supply chain issues arising at an organization was Martin Dow Limited, a Pharmaceutical Company. Martin Dow started its operation in the year 2000. In 2010, Martin Dow acquired the manufacturing facility of Roche in Pakistan. Martin Dow has five strategic partners namely, Biocodex, Teijin, MEDA Pharmaceuticals, Roche, and Riemser. The company is expanding with more than 1000 employees countrywide. It...
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...reverse supply chain management practices in Turkey CIA - 1 Authors - Ismail Erol; Meltem Nurtanis Velioglu; Funda Sivrikaya Serifoglu; Büyüközkan, Gülçin; Aras, Necati; Çakar, Nigar Demircan; Aybek Korugan Title of the Paper - Exploring reverse supply chain management practices in Turkey Journal link -- http://search.proquest.com/docview/216861295?accountid=38885 Copyright: Copyright Emerald Group Publishing Limited 2010 Name – Dilip.K.Singh Register Number – 1421212 Section - K The Research article is an effort by the researchers in order to find out the reverse supply chain management initiatives in certain Turkish industries like automotive, white goods, electric/electronics, and furniture industries. This research paper begins with a small abstract then a brief introduction trying to explain what reverse supply chain management...
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...Wal-Mart’s supply chain management practices case study Question 1: Wal-Mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management characterized by: * Procuring goods directly from manufacturers bypassing all intermediaries. * Negotiating on prices and finalizing a purchase deal only when it was fully confident that the products being bought were not available elsewhere at a lower price. * Spending a significant amount of time meeting vendors and understanding their cost structure. Also, by preferring local and regional vendors and suppliers. * Having over 40 distributions centers located at different geographical locations in the US. So, Wal-Mart’s own warehouses directly supplied 85 % of the inventory, as compared to 50-65% for competitors. About 85% of the goods which were available at the stores passed through the distributions centers. * Having and using a fast and responsive transportation system. * Maintaining a strict vigil over its drivers by keeping a record of their activities through the “Private Fleet Driver Handbook”. * Using a Cross-docking approach. In this system, the finished goods were directly picked up from the manufacturing plant of a supplier, sorted out and then directly supplied to the customers. Question 2: Wal-Mart invested heavily in IT and communications systems to effectively track sales and merchandise inventories in stores across the country. So...
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..."Customer-Facing Supply Chain Practices -- The Impact of Demand and Distribution Management on Supply Chain Success." Journal of Operations Management 30.4 (2012): 269-81. Print. Research Classification: The authors of this research performed an empirical based study and outlined three objectives to their study: 1. …to provide empirical evidence of whether or not demand management (DeM) does indeed have such a substantial positive impact on supply chain performance; 2. …the simultaneous evaluation of the impact of customer-facing SCM practices related to both DeM and distribution management (DiM); 3. …the analysis of a potentially existing relationship between DeM and DiM, (p270 et al. 1-3). To meet the objectives of their study, the authors “identif[ied] relevant practices to DeM and DiM” through literature reviews and expert interviews, and from here, the authors created a conceptual model and utilized the partial least squares to test their hypothesis, (p269 -70). Statement of Problem: This journal article aims to examine the “relative impact of relative practices associated with demand and distribution management,” (p 269). Defined by the authors as “…the ability of a company to understand customer demand and requirements and balance them against the capabilities of the supply chain,” demand management (DeM) is becoming more and more popular in the operations management field; however, DeM has not been comprehensively analyzed in terms of supply chain performance....
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...TOWARDS A BETTER UNDERSTANDING OF SUPPLY CHAIN QUALITY MANAGEMENT PRACTICES Article: International Journal of Production Research • This paper reports the result of a comparative study of quality tools and methods adaptation by operations and supply chain managers. • SCQM is defined as a system based approach to performance improvement that leverages opportunities created by upstream and downstream linkages with suppliers and customers. • Operation management is traditional been explained by some version of an ‘inputs-transformation process- outputs’ view of the productive capability of the firms. From Quality perspective, operation managers have focused on internal activities such as process control process improvement, product design improvement and design of experiment. As a result, more and more six-sigma improvement project evolved. • In addition experts like Deming have long emphasized importance of customers and supplier. • In this paper, it explored the difference between quality management practice of operation managers and each type of managers emphasizes supply chain managers, including what quality tools. Tool can here mean the method such as benchmarking, an approach to improving quality such as process improvement team (PIT) and leadership. Literature review and hypothesis development • Supply chain management has developed as a field from the integration of operations and marketing management. As a result, a linkage with upstream firms – which...
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...WHITE PAPER The Synchronized Distribution Supply Chain: Best Practices in Warehouse Management About Motorola’s Mobile Supply Chain Solutions Every day, companies all over the world count on Motorola mobility solutions to keep their supply chain operations at peak productivity and profitability. When it comes to supply chain optimization, Motorola’s end-to-end supply chain mobility solutions offer the expertise gained through successful proven deployments in many of the world’s largest enterprises, a comprehensive and proven enterprises class product portfolio — including wireless infrastructure for seamless ‘inside outside’ mobility, integrated voice and data devices and bestin-class applications through a world-class partner network — and a complete portfolio of services designed to help you get and keep your mobility solution up and running to ensure peak performance and maximum value. For more information on how Motorola mobility solutions can streamline your supply chain, please visit motorola.com/supplychainmobility or access our global contact directory at motorola.com/enterprise/contactus Executive summary The warehouse is at the center of your business, a key area through which nearly everything in your business must pass — from packages in a parcel post environment to raw materials and finished goods in a manufacturing plant to a wealth of products in a distribution center. When mobility is extended throughout your warehouse, a new level of efficiency, accuracy...
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...This literature review we will cover all the aspects of the retail industry and how supply chain management affects the industry. We will also be looking into the common industry practices that are used in the developed nations. Apart from this we shall also be looking at the current situation of supply chain practices that are used in retail companies in India. Witte, C, Grunhagen, M, & Clarke, R 2003, 'THE INTEGRATION OF EDI AND THE INTERNET', Information Systems Management, 20, 4, pp. 58-65, Business Source Premier, EBSCOhost, viewed 30 August 2013: Summary The paper talked about the use of EDI in retail supply chains. So it covered the advantages and disadvantages of using EDI in retail space. It dealt upon searching reasons why small businesses are not able to use the EDI in their systems and went ahead suggesting alternatives that cold tackle the inefficiency of EDI. Key Learning * The major advantage of using EDI is that it is cost saving also it uses the recognized format across industry so standardized format. * The disadvantage of using EDI is that it can be costly specially the hardware and maintenance part of it. * SME’s do not find it cost effective to use EDI * Alternative to EDI is XML that is web based so no special hardware or software needs to be installed. Boyer, K, & Hult, G 2005, 'Welcome Home: Innovating the Forward Supply Chain', Business Strategy Review, 1p. 31-37, Business Source Premier, EBSCOhost, viewed 30...
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...Practice Examination Questions QUESTIONS ON SUPPLY CHAIN MANAGEMENT SCM 1: In a manufacturing plant, suppose fixed cost is $ 10,000/month. Variable Cost of production is $ 0.80 per unit and the selling price is $ 1.00 per unit. What is the breakeven point? Answer: 50,000 units per month Break Even Point = Fixed Cost / (Selling Price – Variable Cost) = 10000/((1.0 ‐0.8) = 50,000 SCM 2: In a manufacturing plant, suppose fixed cost is $ 5,000/month. Variable Cost of production is $ 0.60 per unit and the selling price is $ .95 per unit. The plant produces 20,000 units per month. What is the profit per month as a percentage of the total cost of production? The total cost includes fixed and variable costs. Answer: 11.76% Total Cost of production = 5,000 + 20,000 * 0.6 = 17,000 Total Revenue = 20,000 * 0.95 = 19,000 Profit as a % of cost = (19,000 – 17,000)/17,000 = 11.76% Note: A similar analysis will be required to find the selling price if the desired % of profit is given. SCM 3: A manufacturing company is considering two suppliers (A and B) to supply a component RQ‐237 for next one year. They have received the following quotes from the two suppliers. Supplier A: Fixed cost/year = $ 10,000; Variable cost per unit = $ 0.8 Supplier B: Fixed cost/year = $ 8,000; Variable cost per unit = $ 0.9 Which supplier should be used? Answer: The indifference point = 20,000 Use Supplier B if the demand is less than 20...
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...decade. In the last 10 years, Wal-Mart has achieved strong and constant growth in sales and net income. It has maintained the leading position in the U.S. discount retail industry and has become the largest retailer in the world. With the maturity of the industry, coupled with the intense competition from rivalry companies, maintaining the current level of high performance becomes very challenging. The Porter’s Five Forces analysis reveals that the competition among rivals is the driving force of the industry, in which price is the most critical factor. The value chain analysis and resource based view analysis show that Wal-Mart has been very successful in implementing the strategy as the low-cost leader by inculcating cost efficiency in its corporate culture, management style, and operations. It has been the pioneer in adopting cutting edge technology to streamline its supply chain, and to understand and respond timely to customer demand. Wal-Mart has developed many strengths that help guard its leading position and open door to many opportunities for expanding the business. However, it also faces threats from growing too big and in many areas, which makes it vulnerable to losing control, weakened cooperation among stores and regions, and competition in multiple fronts. Wal-Mart should be caution in its growth strategy, especially in the expansion of its international presence. Although its financial strength, management skills, and operation efficiency...
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...responsibility gradually rise in the past decades for corporate. Organizations use corporate social responsibility (CSR) to set up activities in order to achieve and respond these expectations. Jamali and Mirshak (2007) state that CSR approach helps to attract global attention and acquire a new resonance in the worldwide economy. However, Frankental (2001) claims “Do CSR is a public relations (PR) invention?” and company focus on promoting itself, getting an edge on its revivals rather than being ethic to protect the environment or maintain human welfare. Therefore, in this essay, author is going to discuss about the different between CSR as well as PR. Moreover, it will apply an example of IKEA to examine the effectiveness of its CSR in supply chain and analyze CSR as a business strategy to maintain the sustainability of business, financial control and risk management. Afterwards, author will highlight the limitations of CSR policy and finally provide some recommendations to improve the CSR strategy for corporates in order to maintain the sustainable resources and increase the brand value as well as profit. Definition of PR According to Clark (2000) points out that public relation (PR) as a communication field from public information to reputation management to relationship management, it is emphasized on the promoting corporate image or two-way communication to gather audience feedback....
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...professional services industry provides a base for its future growth, and also provides a competitive advantage. However, intense competition may lead to pricing pressures, thereby adversely affecting the operating margins and market share of the company. Best Practices for CSC for conducting market research The following are the five best practices in case of CSC in order to conduct market research- * Practice 1 CSC needs to conduct a primary research in order to understand the customer likings. The research process may be in the form of a questionnaire based survey which can be prepared by experts in the field and in consultation with the thought leaders in the event center industry. The main objectives of the primary research should be to know the demographics of its customer and their frequency in the availing the products/services. Moreover the company should also find out the ways (through this research) of attracting the non customers by knowing their needs (Paige Baltzan, 2009). * Practice 2 The company should hire a third part market research agency in order to know better about the Federal acquisition market. It can also do well to hire a PR agency in order to promote itself at the same time. * Practice 3 The company should also go about doing the secondary research by mining the internet and...
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...Crocs; it displays an overview of the company’s objectives in operations to include the supply chain. This examination reveals the success behind how the company thrives in times when others are unable. Part of Crocs leading objectives and primary function is to reinvent the supply chain to provide less shortages and increase awareness and customer satisfaction. This paper will outline a brief overview of company history, Crocs two primary core competencies and in which manner do they exploit them; continued evaluation will cover vertical integration, acquisition, or product extension growth. Further discussion consists of company production and inventory as well, as how margins affect their decisions. History and a Foundation for Core Competencies Lyndon Hanson, Scott Seamans, and George Boedecker created Crocs, INC. in 2002 out of Boulder Colorado. The idea came from a trip taken by the three, where one of them had purchase a pair made from a company out of Canada. The decision to start a business selling the shoes was realized after they leased a warehouse in Florida; when sales took off, they contacted Ronald Synder a college friend who which was employed for Flextronics (electronics manufacture) in an executive position. The addition of Snyder was positive as he helped invent their supply chain strategy (Schroeder, Goldstein & Rungtusanatham, 2011). In historical industry practice, it was commonplace to build orders for future dates, this creates issues for retailers...
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...Greening the Supply Chain at Danaher Companies across the globe are seeking energy-efficiency, new environmental programs, and related methods to protect the fragile business environment. Danaher is among one of the companies leading environmental initiatives and identifying opportunities to “Green” their supply chain. Greening a supply chain can be achieved by implementing a process of using environmentally friendly agents and transforming them into byproducts that can be improved or recycled within the existing environment. This process develops outputs that can be reclaimed and re-used at the end of their life-cycle thus, creating a sustainable supply chain where companies can reduce costs while helping the environment. At Danaher, many times these initiatives are the result of federal regulatory initiatives or are customer driven. In an interview with John Dion, Vice President of Global Services for Danaher, he gave an example of the latest request from some of their top customers relating to consumable waste streams. One area that the company is exploring is expanding their use of water based solvents and reducing the amount of solvent based chemicals in their supply chain. He stated that customers are seeking medical devices containing green alternative components as part of their own “green” strategy. Since Danaher is highly focused on meeting the needs of its customer, it has taken the steps needed to use the “environmentally friendly” solvent as much as possible...
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...the Earthquake and Tsunami in Japan in spring 2011 was to bring to the forefront the issues of supply chain venerability. Use the article from the Congressional Research Service for an article review. In your review, discuss how the specific situation could have implications in a broader sense. This article was a great detailed as well as a depressing topic covering the events of the earthquake and hurricane occurrence on March of 2011 at the northeast coast of Japan. This happening was the most powerful natural disaster in Japan’s modern history. Affecting the challenge for Japanese government, businesses, and societies was the resulting ruining of several nuclear reactors in the region which supplied electricity for homes and industry. Located in the disaster expanse are a number of manufacturing facilities which are vital to the global motor vehicle supply chain. These areas took a big hit which was seemed to be preventive in resolution based off the imagery and cost factors of how the end result of the hurricane and earthquake effected those critical locations. These facilities include warehouses that assemble automobiles and many suppliers which build parts and sub-components for vehicles. The effects of these disasters has been first and foremost accepted by Japanese automakers, which closed many of their assembly plants for several weeks as they evaluated their supply chain issues and impact on their essential sub-tier suppliers. Japanese motor vehicle plants in other...
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