IDIS 343 Latest Version with Complete Solutions

IDIS 343 Latest Version with Complete Solutions supply chain Supply chain influences all activities that we perform from initial raw material / supplier to end customer What is Supply Chain Management (SCM)? The fortune quote defines it as -"Overseeing the movement of goods from the customers order through to production, storage, and distribution." A better definition might be -"A set of approaches utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores, so that merchandise is produced and distributed at the right quantities, to the right locations, and at the right time, in order to minimize system-wide costs while satisfying service level requirements" Upstream vs. Downstream Upstream = supplier - information Downstream = customer - payment There are some cases that it will be flowing in the opposite direction The logistics / Supply Chain (SC) Mission Getting the right goods or services to the right place, at the right time, and in the desired condition at the lowest cost and highest return on investment Why study logistics? - Customer service expectations are increasing -Customers expect product to always be in stock or quick shipping (1-day shipping - $800 MM) -Lower tolerance for errors in ordering -There is an increase of customization why study logistics? - high costs -Logistics cost are about 10% of sales without purchasing costs -Costs closer to 12% internationally -Anywhere from 4%-30% for individual firms -As high as 70%-80% if purchasing and production are included -Lower the price, you can attract more demand why study logistics? - Logistics adds significant customer value -Businesses create four types of value in products: 1) Form (manufacturing) 2) Time (logistics) 3) Place (logistics) 4) Possession (marketing, engineering, finance) -Logistics creates value by making products readily available at a desired location for customers why study logistics? - Length of supply and distribution lines are increasing -We operate in a global economy -Toyota has manufacturing plants in 27 countries -A plant in Kentucky received parts that are: ----Loaded into ocean containers in japan ----Shipped across the pacific ----Transferred in trains ----Used to produce up to 1,000s of Camrys per day -Long supply chains require more careful management that if production was local company strategy -Logistics affects a significant portion of costs -Logistics also dictate customer experience (Allows penetration of new markets, new sales, By focusing on operations/logistics, wal-mart became a world leader in retail)