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1、,Supply Chain Strategy,Operations Management,For Competitive Advantage,CHASE AQUILANO JACOBS,ninth edition,Chapter 8,Chapter 8Supply-Chain Strategy,Supply-Chain Management Defined? Measuring Supply-Chain Performance Bullwhip Effect Outsourcing Defined Value Density Defined Mass Customization Defined
2、,What is Supply-Chain Management?Defined,Supply-chain is a term that describes how organizations (suppliers, manufacturers, distributors, and customers) are linked together. Supply-chain management is a total system approach to managing the entire flow of information, materials, and services from ra
3、w-material suppliers through factories and warehouses to the end customer.,Formulas for Measuring Supply-Chain Performance,Inventory Turnover = Cost of goods sold . Average aggregate inventory value Weeks of Supply = Average aggregate inventory value Cost of goods sold,(52Weeks),Example of Measuring
4、 Supply-Chain Performance,Suppose a companys new annual report claims their costs of goods sold for the year is $160 million and their total average inventory (production materials + work-in-process) is worth $35 million. This company is used to having any inventory turn ratio of 10. What is this ye
5、ars Inventory Turnover ratio? What does it mean?,Example of Measuring Supply-Chain Performance (Continued),Inventory Turnover = Cost of goods sold/Average aggregate inventory value = $160/$35 = 4.57 Since the company is used to an inventory turnover of 10, a drop to 4.57 means that the inventory is
6、not turning over as quickly as it had in the past. Without knowing the industry average of turns for this company it is not possible to comment on how they are competitively doing in the industry.,Bullwhip Effect,Order Quantity,Time,Retailers Orders,Order Quantity,Time,Wholesalers Orders,Order Quant
7、ity,Time,Manufacturers Orders,The magnification of variability in orders in the supply-chain.,A lot of retailers each with little variability in their orders.,can lead to greater variability for a fewer number of wholesalers, and,can lead to even greater variability for a single manufacturer.,Matchi
8、ng Supply-Chains with Products,Efficient Supply-Chain,Responsive Supply-Chain,Functional Products,Innovative Products,Match,Match,Mismatch,Mismatch,What is Outsourcing?Defined,Outsourcing is defined as the act of moving a firms internal activities and decision responsibility to outside providers.,Re
9、asons to Outsource,Organizationally-driven Improvement-driven Financially-driven Revenue-driven Cost-driven Employee-driven,Value DensityDefined,Value density is defined as the value of an item per pound of weight. It is used as an important measure when deciding where items should be stocked geogra
10、phically and how they should be shipped.,Mass CustomizationDefined,Mass customization is a term used to describe the ability of a company to deliver highly customized products and services to different customers. The key to mass customization is effectively postponing the tasks of differentiating a product for a specific customer until the latest possible point in the supply-chain network.,
