Supply chain operations (Making and Delivering)

Supply Chain OperationsMAKING AND DELIVERING

SC Operations

Plan

Source

Make

Deleviry

Product Design (Make) Fewer parts, Simple Design, Modular Construction from generic sub-assemblies.

Supply chain Role: ◦ Flexible◦ Responsive◦ Efficient

Complicated Product Design

Simple Product Design

Product with high responsiveness and competitive cost

Manufacturing

Procurement

Design

Production Scheduling (Make) The Goal is to use available capacity (Equipment, labor, Facilities) in the most efficient and profitable manner.

High Utilization Rates

High levels of Customer Service

Low levels of inventory

Objectives of Production Scheduling

• Long production runs, • Centralized Manufacturing • Distribution Facilities

• Many short production runs• High inventory levels

• Short Production runs• JIT Delivery of raw materials

Scheduling a multi-product production facility

Determine the economic lot size for the

production runs of each product

Set the right sequence of production

runs for each product

Scheduling1

2

3 6

5

4 8

9

9

Run out time R= P/D

R= run out time P= number of units of product on hand D= product demand in units for a day or week

Facility Management (Make) All facility management decisions happen within the constraints set by decisions about facility locations.

Decisions in three areas :

1. The role each facility will play

2. How capacity is allocated in each facility

3. The allocation of suppliers and markets to each facility

Order Management (Deliver) Process of passing order information from customers back through the supply chain from retailers to distributors to service providers and producers

CustomerRetailers

Distributer

Service Provider

Producers

Four Rules of Efficient Order Management1. Enter the order Once and Only Once

◦ once—Capture the data electronically as close to its original source as possible and do not manually reenter the data as it moves through the supply chain.

2. Automate Order Routing◦ Manual intervention should be minimized for the routing and filling of routine orders.

3. Make order status Visible◦ Let customers track their orders through all the stages from entry of the order to

delivery of the products.

4. Use integrated Order management systems

Delivery Scheduling (Deliver) The delivery scheduling process works within the constraints set by transportation decisions.

Types of Delivery Scheduling 1. Direct Deliveries2. Milk Run Deliveries

1. The savings matrix technique2. The generalized assignment technique

Direct Deliveries

Location

Location

Milk Run Deliveries

Originated Location Location

Location

Location

Location

Location

Location

Location

OR

Delivery Sources1. Single product locations2. Distribution centers

Single product locations

Location

Location

Location

Customer

Distribution centers

Location

Location

Location

Center Customer

Crossdocking

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