BUS 371 Lecture Notes - Lecture 2: Supply Chain, Safety Stock, Manufacturing Resource Planning

• School: Stony Brook University
• Department: Business Management
• Course: BUS 371
• Professor: Jeffrey Coffin

Document Summary

Lecture 2 chapter 1: introduction to supply chain management. Supply chain consists of flow of products and services from: raw materials manufacturers, component and intermediate manufacturers, final product manufacturers, wholesalers and distributors, retailers. Many large firms moving away from in-house vertically integrated struct to scm. Old paradigm firm gain synergy as vertically integrated firm encompassing ownership and coordination of sev supply chain activities: organizational cultures emph short term, company focused perf. Firms must work together by sharing info on things like: demand forecasts, production plans, production changes, new mkting strats, new techs, purchasing plans, delivery dates. Firms using scm: start w/ key suppliers, move on to other suppliers, customers, and logistics services, integrate second tier suppliers and customers (2nd tier refers to customer"s customers and supplier"s suppliers) Cost savings and better coordination of resources are reasons to employ scm: reduced bullwhip effect. Erratic demand forecasts causing excess safety stocks, which cause production planning problems.