Introduction to material management – chapter one
The wealth of a country is measured by its gross national product – the output of goods and services
produced by the nation in a given time
Physical objects = something you can touch/feel/see
Services = the performance of some useful function
Wealth is measured by the amount of goods and services produced
Manufacturing companies are in the business of converting raw materials to a form that is od far
more value and use to the customer than the original raw materials
Operation environment
Government (environment, safety, product liability and taxation)
Economy: influence the demand for a product or service and the availability of inputs
Competition:
- Competition all over the world
- transportation is more efficiently and cost less
- worldwide communications are fast, effective and cheap
1. Customers
consumers and industrial customers are more demanding they have improved the range
of characteristics they offer:
- fair price
- higher quality
- delivery lead time
- better pre-and after sale service
- product and volume flexibility
2. Quality: provide quality that exceeds expectations
Order qualifiers = Customer requirements based on price, quality, delivery and so forth.
Order winners = Competitive characteristics that persuade a company’s customer to choose its
products and services.
, Manufacturing strategy
1. Engineer-to-order: customer is highly
involved inventory is purchased
when needed by manufacturing
delivery lead time is long
2. Make-to-order: process begins when
order is received
3. Configure-to-order: each customer and
order may be entirely unique no
design time
4. Assemble-to-order: inventory held
ready for assembly customer input
is limited to selecting assembly options
5. Make-to-stock: they sell from a
finished goods inventory
Postponement (application of assemble-to-order): shifts product differentiation closer to the
consumer by postponing identity change to the last possible supply chain location.
The supply chain concept
Important factors in supply chains:
Supply chain: includes all activities and
processes to supply a product or service to
a customer.
Any numbers of companies can be linked
in a supply chain
A customer can be a supplier to another
customer, so he total chain can have a
number of supplier-customer relationships
Can contain a number of intermediaries
(distributors), such as warehouses,
retailers.
Product or services usually flow from supplier to customer; design, demand information, and
cash usually flow from customer to supplier
The wealth of a country is measured by its gross national product – the output of goods and services
produced by the nation in a given time
Physical objects = something you can touch/feel/see
Services = the performance of some useful function
Wealth is measured by the amount of goods and services produced
Manufacturing companies are in the business of converting raw materials to a form that is od far
more value and use to the customer than the original raw materials
Operation environment
Government (environment, safety, product liability and taxation)
Economy: influence the demand for a product or service and the availability of inputs
Competition:
- Competition all over the world
- transportation is more efficiently and cost less
- worldwide communications are fast, effective and cheap
1. Customers
consumers and industrial customers are more demanding they have improved the range
of characteristics they offer:
- fair price
- higher quality
- delivery lead time
- better pre-and after sale service
- product and volume flexibility
2. Quality: provide quality that exceeds expectations
Order qualifiers = Customer requirements based on price, quality, delivery and so forth.
Order winners = Competitive characteristics that persuade a company’s customer to choose its
products and services.
, Manufacturing strategy
1. Engineer-to-order: customer is highly
involved inventory is purchased
when needed by manufacturing
delivery lead time is long
2. Make-to-order: process begins when
order is received
3. Configure-to-order: each customer and
order may be entirely unique no
design time
4. Assemble-to-order: inventory held
ready for assembly customer input
is limited to selecting assembly options
5. Make-to-stock: they sell from a
finished goods inventory
Postponement (application of assemble-to-order): shifts product differentiation closer to the
consumer by postponing identity change to the last possible supply chain location.
The supply chain concept
Important factors in supply chains:
Supply chain: includes all activities and
processes to supply a product or service to
a customer.
Any numbers of companies can be linked
in a supply chain
A customer can be a supplier to another
customer, so he total chain can have a
number of supplier-customer relationships
Can contain a number of intermediaries
(distributors), such as warehouses,
retailers.
Product or services usually flow from supplier to customer; design, demand information, and
cash usually flow from customer to supplier
