PRODUCTION AND OPERATIONS MANAGEMENT Ch 12 Supply Chain

PRODUCTION AND OPERATIONS MANAGEMENT Ch. 12: Supply -Chain Management SUMMARY POM - J. Galván 1

BASIC POINTS HOW CAN WE MANAGE SUPPLIES AND END PRODUCTS? o Distribution o Meaning of supply chain o Inventory measures and SC management performance o Elements: o SC dynamics o Purchasing o Production control o Negotiation strategies o Distribution o cost-based price model o Purchasing function. Definition o market-based price model and strategies o competitive bidding o Make buy o Centralize o Materials management o Cooperate - Compete o Few suppliers - Many suppliers o Keiretsu network o Vertical integration o Virtual company

QUESTIONS (I) • Under what conditions might a firm decide to organize its procurement function as a materials management function? As a supply management function? As a source management function? • What can the procurement function do to implement just-in-time techniques with suppliers? • What information does purchasing receive from other functional areas of the firm? • How does a traditional adversarial relationship with suppliers change when a firm makes a decision to move to Just-in-time deliveries? • What reservations do suppliers have about JIT purchasing? • Discuss on the potential strategies of the purchasing function in relation with suppliers

QUESTIONS (II) • Discuss the objectives of purchasing management and its role in materials management. How does it help in reducing the inventory costs? • Getting products to customers, obtaining and managing raw materials, and packaging finished products are all activities of – procurement. – Logistics – production. – materials management.

What if • ASSIGNMENT: – You manage a factory in Madrid producing wooden tables – Supplied with wood by local producers – Distribution of final product throughout Europe – Distribution points: One warehouse per country, 10 in Spain – How would you organize the supply chain?

New Supplies!! POM - J. Galván 6

SUPPLY METHODS POM - J. Galván 7