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Lecture Principle of inventory and material management - Lecture 16

Lecture 16 - Purchasing and Supply Chain (continued). The contents of this chapter include all of the following: Supply chain strategies, suppliers, vertical integration, managing supply chain, issues in integrated supply chain, opportunities in integrated supply chain, keiretsu networks, E-Procurement, distribution, managing supply chain performance. | Lecture 16 Purchasing and Supply Chain (continued) Books Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGraw-Hill/Irwin. Operations Management, 11/E, Jay Heizer, Texas Lutheran University, Barry Render, Graduate School of Business, Rollins College, Prentice Hall Objectives Supply Chain Strategies Suppliers Vertical Integration Managing Supply chain Issues in integrated supply chain Opportunities in integrated supply chain Keiretsu Networks E-Procurement Distribution Managing supply chain performance Supply Chain Strategies Negotiating with many suppliers Long-term partnering with few suppliers Vertical integration Keiretsu Virtual companies that use suppliers on an as needed basis 3 Many Suppliers | Lecture 16 Purchasing and Supply Chain (continued) Books Introduction to Materials Management, Sixth Edition, J. R. Tony Arnold, P.E., CFPIM, CIRM, Fleming College, Emeritus, Stephen N. Chapman, Ph.D., CFPIM, North Carolina State University, Lloyd M. Clive, P.E., CFPIM, Fleming College Operations Management for Competitive Advantage, 11th Edition, by Chase, Jacobs, and Aquilano, 2005, N.Y.: McGraw-Hill/Irwin. Operations Management, 11/E, Jay Heizer, Texas Lutheran University, Barry Render, Graduate School of Business, Rollins College, Prentice Hall Objectives Supply Chain Strategies Suppliers Vertical Integration Managing Supply chain Issues in integrated supply chain Opportunities in integrated supply chain Keiretsu Networks E-Procurement Distribution Managing supply chain performance Supply Chain Strategies Negotiating with many suppliers Long-term partnering with few suppliers Vertical integration Keiretsu Virtual companies that use suppliers on an as needed basis 3 Many Suppliers Commonly used for commodity products Purchasing is typically based on price Suppliers compete with one another Supplier is responsible for technology, expertise, forecasting, cost, quality, and delivery 4 Few Suppliers Buyer forms longer term relationships with fewer suppliers Create value through economies of scale and learning curve improvements Suppliers more willing to participate in JIT programs and contribute design and technological expertise Cost of changing suppliers is huge 5 Vertical Integration Raw material (suppliers) Iron ore Silicon Farming Backward integration Steel Current transformation Automobiles Integrated circuits Flour milling Forward integration Distribution systems Circuit boards Finished goods (customers) Dealers Computers Watches Calculators Baked goods Vertical Integration Examples of Vertical Integration 6 Vertical Integration Developing the ability to produce goods or service previously purchased Integration may be forward, towards the customer, or .