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Lecture 6

Lecture 6. Identifying Dimensions of SC Performance Evaluating Operating Initiatives pp. 176-178 & Discussion of your group project!. Agenda. 1. Identifying Dimensions of SC performance 2. Evaluating Operating Initiatives. (to p3). (to p7).

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Lecture 6

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  1. Lecture 6 • Identifying Dimensions of SC Performance • Evaluating Operating Initiatives pp. 176-178 & Discussion of your group project!

  2. Agenda • 1. Identifying Dimensions of SC performance • 2. Evaluating Operating Initiatives (to p3) (to p7)

  3. 1. Strategic Dimensions: Identifying Dimensions of SC Performance Strategic dimensions are a firm’s strategic focuses in the long run. The ultimate aim is to achieve supply chain excellence. Planning, execution, business results, and social impact are adopted in the proposed supply chain overall performance model (see next slide). (to p4)

  4. Dimensions of SC Performance Social Impact Planning Execution SC Overall Performance Business Results (to p5) Further note

  5. Execution The literature review further identifies personal contact quality, product availability, information quality, ordering processing quality, and order discrepancy handling as supply chain management strategic dimensions in the area of execution (see next slide). See Appendix A for more information on Performance Measures in a supply chain environment (to p6) (to p11) (to p2)

  6. Dimensions of SC Performance - Execution Customer-related Measures Job-related Measures Social Impact Personnel Contact Quality Planning Product Availability Process Q Measures Information Quality Execution SC Overall Performance Ordering Processing Quality Product Q Measures Order Discrepancy Handling Business Results (to p5)

  7. 2. Strategic Deployment: Evaluating Operating Initiatives Intelligent enterprise will proactively lay out a business strategy based on strategic focuses (or customer needs), and firm’s ability and operating initiatives. How do we evaluating their level of significance? (to p8)

  8. Strategic Deployment: Evaluating Operating Initiatives A deployment strategy can be set up with the Quality Function Deployment (QFD) technique to ensure that strategic dimensions (or “What to do”) are linked effectively with the potential operating initiatives (or “How to do it”) (see next slide). See Appendix B for more information on QFD (to p9) (to p15)

  9. QFD Relationships: Strong = 9 Medium = 3 Weak = 1 ‘HOW’ Design Requirements Importance to customer Redesigning Fulfillment Process Making Use of OR Models EstablishingStrategic Alliance Adopting TQM Programs ‘WHAT’ Customer Requirements Adopting the ERP System Sharing knowledge    Personal Contact Quality 4  Product Availability 5 Information Quality 4 Order Processing Quality 5 Order Discrepancy Handling  3 Total 127 105 159 97 31 189 Rate of Importance: 5=most Important; 1=least Important (to p10) How to read them?

  10. Strategic Deployment: Evaluating Operating Initiatives Cross –functional teams are normally used for this exercise. Based on the QFD exercise, it is observed that the single most important initiative or program in achieving supply chain excellence is the adoption of the ERP system. (to p2)

  11. Appendix A: SC Performance Measures • Planning (A.1) • Execution (A.2) • Business Results (A.3) (to p12) (to p13) (to p14) (to p5)

  12. A.1 Dimensions of SC Performance - Planning Social Impact Return on Investment Long Term Policy Development Planning Effectiveness of the Game Plan Medium Term Policy Deployment Outcomes against Industry Norm Short Term Degree of Endorsement by SC Members SC Overall Performance Strategic Level Execution Tactical level SC Climate Business Results Degree of Resistance to Change Operational Level (to p11)

  13. A.2 Dimensions of SC Performance - Execution Job-related Measures Social Impact Social Cost Policy Development Planning Policy Deployment Process Q Measures Design for Six sigma Design SC Overall Performance Execution Product Q Measures Sigma Level Conformance Business Results Customer-related Measures Customer Satisfaction Productivity Growth/Learning (to p11)

  14. A.3 Dimensions of SC Performance – Business Results Social Impact Planning Total Replenishment Time Forecasting Accuracy Supplier Performance Replenishment SC Overall Performance Execution Total Production Time Inventory Level Capability Index Production Business Results Total Fulfillment Time Customer Responsiveness Reliability of Delivery Fulfillment (to p11)

  15. Appendix B: QFD Quality Function Deployment (QFD) is a system for translating consumer requirements into appropriate company requirements at each stage from research and development to engineering and manufacturing to marketing/sales and distribution. (to p16) Madu, C. N., House of Quality in a Minute, Chi Publishers, 2000, Fairfield, CT.

  16. Steps in QFD Development • Step 1: Identify customer requirements • Step 2: Identify design requirements • Step 3: Position these requirements in a matrix with importance weights as well as target values • Step 4: Develop a correlation matrix for tradeoffs • Introduce competitive and technical evaluations. (to p8)

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