Supply Chain Management Overview - 8391 Words

Chapter -3 SUPPLY CHAIN DRIVERS AND METRICS DRIVERS OF SUPPLY CHAIN PERFORMANCE : Logistical drivers: Facilities, Inventory, and Transportation Cross-functional drivers: Information, Sourcing, and Pricing These drivers interact with each other to determine the supply chain s performance in terms of responsiveness and efficiency. As a result, the structure of these drivers determines if and how strategic fit is achieved across the supply chain. Drivers: Meaning and Impacts : Facilities are the actual physical locations in the supply chain network where product is stored, assembled, or fabricated. The two major types of facilities are: production sites and storage sites. Decisions regarding the role,†¦show more content†¦Although this framework is generally viewed from the top down, in many instances, a study of the six drivers may indicate the need to change the supply chain and potentially even the competitive strategy. [pic] FACILITIES: ROLE IN THE SUPPLYCHAIN : If we think of inventory as what is being passed along the supply chain and transportation as how it is passed along, then facilities are the where of the supply chain. They are the locations to or from which the inventory is transported. Within a facility, inventory is either transformed into another state (manufacturing) or it is stored (warehousing). Components of Facilities Decisions : Role; Location; Capacity; Facility-Related Metrics: Capacity; Utilization; Theoretical flow/cycle time of production; Actual average flow/cycle time; Flow time efficiency; Product variety; Volume contribution of top 20 percent SKUs and customers ; Processing/Setup/Down/Idle time; Average production batch size ; Production service level OVERALL TRADE-OFF: Facilities The fundamental trade-off that managers face when making facilities decisions is between the cost of the number, location, and type of facilities (efficiency and the level of responsiveness that these facilities provide the company s customers. 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