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ISQA 407 Introduction to Global Supply & Logistics Management Winter 2012 PowerPoint PPT Presentation


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ISQA 407 Introduction to Global Supply & Logistics Management Winter 2012. Portland State University. Agenda. Quick review of last class Production Inventory Systems MRP / ERP EOQ Presentation on Kropf Q&A. Production:. Product focus: Customer centric Flexible Integrated.

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ISQA 407 Introduction to Global Supply & Logistics Management Winter 2012

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Isqa 407 introduction to global supply logistics management winter 2012

ISQA 407

Introduction to Global Supply & Logistics Management

Winter 2012

Portland State University


Agenda

Agenda

  • Quick review of last class

  • Production

  • Inventory

  • Systems

  • MRP / ERP

  • EOQ

  • Presentation on Kropf

  • Q&A


Production

Production:

  • Product focus:

  • Customer centric

  • Flexible

  • Integrated

  • Functional focus:

  • Few operations

  • Efficiency oriented

  • Postponement

  • DFx


Definitions in production

Definitions in production

  • Routing:

    • The operations to be performed, their sequence, the work centers visited, & the time standards

  • Bottleneck:

    • A resource whose capacity is less than the demand placed on it

  • Due date:

    • When the job is supposed to be finished

  • Slack:

    • The time that a job can be delayed & still finish by its due date

  • Queue:

    • A waiting line


Definitions in production1

Definitions in production

  • Stock keeping Unit: a product given a part number and productized

  • Job Lot: All parts stored and pulled by product

  • Cross-docking: Distribution centers / spoke & wheel.


High volume low mix operations

High Volume / Low Mix Operations

  • High volume flow operations generally have fixed routings

  • Bottlenecks are easily identified

  • Commonly use line-balancing to design the process around the required tasks

    • Examples?


Low volume high mix operations

Low Volume / High Mix Operations

  • Low volume job shop operations are designed for flexibility.

  • Each product or service may have its own routing (scheduling is much more difficult)

  • Bottlenecks move around depending upon the products being produced at any given time

    • Examples?


Inventory

Inventory

  • Is it an asset or a liability?

  • Why?


Inventory1

Inventory:

  • Cycle inventory: Turns – How much is needed?

    • Carry costs

    • Obsolescence

    • flexibility

  • Safety Stock:

    • Buffer against risk

    • Costs?

  • Seasonal Inventory

    • Smoothing

    • Examples?


  • Location transport

    Location & Transport

    • Infrastructure, customers, costs

    • Water: Low cost, lengthy

    • Rail: Low cost, lengthy

    • Trucks: quick, flexible, costly with fuel

    • Air: High cost, quick

    • General Rule: Higher cost of product, emphasize flexibility over costs. Also consider life cycles.


    Information

    Information

    • Daily – MRP that coordinates production, inventory, & transport

    • Forecasting & Planning – ERP that includes forecast, capacity, customer orders, etc


    Material requirements planning

    Material Requirements Planning

    • Materials requirements planning (MRP) is the logic for determining the number of parts, components, and materials needed to produce a product.

    • MRP provides time scheduling information specifying when each of the materials, parts, and components should be ordered or produced.

    • Dependent demand drives MRP.

    • MRP is a software system.


    System wide erp

    System wide ERP

    ERP software applications used to manage product planning, parts purchasing, inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business


    Isqa 407 introduction to global supply logistics management winter 2012

    Four + One Categories of SCM Operations (p. 45)

    Plan

    P1 Plan Supply Chain

    P4 Plan Deliver

    P5 Plan Returns

    P3 Plan Make

    P2 Plan Source

    Source

    Make

    Deliver

    M1 Make-to-Stock or order

    S1 Source Stocked Products

    D1 Deliver Products

    Suppliers

    S2 Procurement

    M2 DFx

    D2 Order Management

    Customers

    M3 production schedule

    S3 Credit / LOI / LOC

    D3 Mode of transport

    Return do to Warranty

    Return do to sustainability

    Enable Closed Loop Supply Chain


    Plan demand forecasting methods

    Plan – Demand Forecasting Methods

    • Sales and Operating Plan process

    • Qualitative – Personal feelings

    • Casual – One effect has outcome on another

    • Time series – Historical data

    • Simulation – causal + time (elasticity)

    • Four major variables: supply, demand, Product type, competition


    Objectives aggregate planning

    Objectives – Aggregate Planning

    Minimize Costs/Maximize Profits

    Maximize Customer Service

    Minimize Inventory Investment

    Minimize Changes in Production Rates

    Minimize Changes in Work-force Levels

    Maximize Utilization of Plant and Equipment


    Methods of aggregate planning

    Methods of Aggregate Planning

    • Production capacity = demand; highly efficient 85% utilization

    • Various levels of capacity = demand; incremental approach

    • Inventory & Backlog = Demand; used when long lead-times or need for linear output

    • Postponement – part of DFx; cost structure and life cycles high and short.


    Isqa 407 introduction to global supply logistics management winter 2012

    Inventory - EOQCycle, safety, or seasonal?Strategy with Aggregate Plan?Order costs and inventory cost can be highLot size efficiency (LTL vs: FT, set-up times, JIT, etc…


    Basic eoq model

    Basic EOQ Model

    Important assumptions

    Demand is known, constant, and independent

    Lead time is known and constant

    Receipt of inventory is instantaneous and complete

    Quantity discounts are not possible

    Only variable costs are setup and holding

    Stockouts can be completely avoided


    An eoq example

    2DS

    H

    Q* =

    2(27)(100)

    1.00

    Q* =

    = 5,400 = 73.48 units

    An EOQ Example

    Determine optimal number of items to order

    D = 27 units per week

    S = $100 per order

    H = $1.00 per unit per week


    Procurement

    Procurement

    • Purchasing: two types

      • MRO – Maintenance, repair, and operations

      • Direct – strategic procurement of components

    • Sourcing: Selection of a supplier including:TQRDCE

    • Contracts: For long term relationships

    • AR/AP: credit policies (LOI, LOC, MOU, PO)


    Responsibilities of sourcing professionals

    Responsibilities of Sourcing Professionals

    • Beyond just continuity of supply..

      • Labor rights

        • Child labor

        • Working conditions

        • Benefits and hours

        • Employee safety considerations

      • Environmental considerations

        • Pollution/emissions/utilization of scare or protected resources

        • Recycling/Reclaim

        • Utilization of hazardous materials (IE: ozone depleting substances, lead, etc.)

        • Who is responsible? What is produced via mfg process? What is included in the finished product? Have we disclosed to end customer?

    • What is the impact to the company? (CSRs, tracking. Expensive)


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