11. Supply Chain Management.ppt

Most flexible, can deliver products at any time, don’t have schedules like trains and airplanes. If transporting heavy bulky products at a huge volume, then use railroads. With use of JIT, companies only need to transport small amounts of product at a time, and therefore more likely to use trucks or air, so railroad has become a less popular transportation method. * The longer the product is in transportation, the higher the carrying cost is. Trade off: minimizing one cost usually means having to pay more for the other. * * Since supply chain is becoming more and more global, new technologies have been developed to monitor and control the items as they move along the chain. This is to enhances the protection and security of the products. * * Gives you an idea of how well some of the best firms perform in the area of supply chain management. * High utilization means low cost per product Response: minimizing cost isn’t important, instead investing in equipment and human resources to increase capacity and flexibility, also need sufficient inventory on hand to ensure you have enough material for whatever production level comes up. Differentiation, always trying to satisfy customers by providing different and creative new products. Some old products become out of date and no longer provides a competitive advantage in differentiation. Do don’t want to have too much inventory on hand. * Lead time: the time from the moment the customer places an order to the moment it is received by the customer. Why shorten lead time? Benefits: additional months of sales, more revenue, especially when competing with other companies, first mover advantage; reduce stock (if lead time was 0, then don’t need inventory at all). Customization and service: customer satisfaction. Shorten lead time might mean better more expensive equipment or more labor, however low costs cannot increase costs When going global, going to be a lot more issues than when just operating in the local environment. Cha