Operation Management Chapter 10

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CHAPTER 10

SUPPLY CHAIN MANAGEMENT

Teaching Notes

This chapter introduces the concept of supply chain, its management, performance measures and improvement approaches. As an extension of the systems point of view, the system dynamics inherent in the supply chain are illustrated and the coordination in the supply chain is emphasized. Five areas where measurement of supply chain performance should be made are discussed. The five areas are on-time delivery, quality, time (business cycle) total delivered cost and flexibility. Supply chain strategies including functional or innovative strategies are described with examples. The basic ways to improve supply chains by changing structure or infrastructure are illustrated. The chapter ends with a discussion of e-business, e-procurement, and virtual supply chains.

In teaching the chapter, it is helpful to illustrate the systems interactions in a supply chain and show how supply chain performance can be measured and improved through the use of concrete examples. The references by Lee (1995, 2004), Schonberger (1996), Fisher (1997), Badoc (2001), and Baliga (2001) will be useful in preparing lectures.

Answers to Questions

1. Supply chain management is planning, design and control of the flow of information and materials along the supply chain in order to meet customer requirements in an efficient manner, now and in the future. Demand management is managing the demand for goods or services along the supply chain. Therefore, demand management is complementary to supply chain management and controls the levels of demand on the system.

2. a. BIG MAC suppliers of beef, vegetables, bread, etc. ( factories and distribution centers ( the franchises that sell Big Mac ( the customers

b. GASOLINE oil drilling ( oil wells…...

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