GMS 401 Chapter Notes - Chapter 8: Cross-Docking, Carrying Cost, Reverse Logistics
28 Jun 2018
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GMS – Chapter 8 – Supply Chain Management
Supply chain – sequence of organizations – their facilities and activities – that are involved in
producing and delivering a product
Begins with suppliers of raw materials and extends all the way to the final customer
Supply chain management – collaboration of supply chain companies and coordination of their
activities so that market demand is met as efficiently and effectively as possible
Supply chains should be effective and efficient
Factors to manage supply chain
Increasing competition
Increasing outsourcing
Increasing globalizations
Increasing e-commerce
The need to manage orders and inventories across the supply chain
Bullwhip effect – demand/order variability gets progressively larger the further up in a supply
chain the company is
The bullwhip effect causes inefficiencies at the wholesaler/distributor and manufacturer
Major cause of bullwhip effect is slow and erratic reaction to a change in demand due to lack of
end-of-line demand visibility, long lead times, inexperience and lack of understanding of the
impact of ones action on supplier
Supply chain management activities
Strategic (Design) Activities
oGoals and competitive characteristics
oDesign/redesign supply chain with characteristics in mind
oDetermine best supply chain network
Tactical (planning) / operational activities
oProduction, planning and control: forecasting, purchasing, ordering,
transportation of material, inventory control, scheduling production and
distribution and customer service
Inventory in a supply chain
oWhere in a supply chain should inventory be held?
oValue of inventory increases as materials move down the supply chain towards
consumers, response team decreases
oNature of inventory becomes more specific as it moves down chain
Reduces risk pooling – holding (safety) stocks in one central location
rather than in multiple locations
oDelayed differentiation/postponement – waiting until late in the process to add
differentiation features to standard products
Warehousing/transportation in a supply chain
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Gms chapter 8 supply chain management. Supply chain sequence of organizations their facilities and activities that are involved in producing and delivering a product. Begins with suppliers of raw materials and extends all the way to the final customer. Supply chain management collaboration of supply chain companies and coordination of their activities so that market demand is met as efficiently and effectively as possible. The need to manage orders and inventories across the supply chain. Bullwhip effect demand/order variability gets progressively larger the further up in a supply chain the company is. The bullwhip effect causes inefficiencies at the wholesaler/distributor and manufacturer. Major cause of bullwhip effect is slow and erratic reaction to a change in demand due to lack of end-of-line demand visibility, long lead times, inexperience and lack of understanding of the impact of ones action on supplier. Strategic (design) activities: goals and competitive characteristics, design/redesign supply chain with characteristics in mind, determine best supply chain network.
