FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 1
OUTLINE• Questions? Comments?
• Stories or experiences with supply chains?
• Take roll
• Chapter 1 and 2 (Chopra)
• Quiz next Tuesday
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 2
Strategic Framework for Analyzing Supply Chains
• Chapter 1 – Understanding
• Chapter 2 – Performance
• (Chapter 3 – Drivers and Obstacles)
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 3
Understanding
• What is a supply chain?
– What did you learn about supply chains that you did not
think about before?
• Decision Phases
– Which phase is of the most interest to you?
• Processes
– Why was this included in the chapter?
• Importance
– Examples – what did you think of the authors’ choice of
examples?
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 4
What is a supply chain?
• All the activities required to fill a customer’s order
• Objective – Satisfy the customer’s requirements
– Do customers know what they want? How do they express their requirements?
• Maximize the overall value that is generated
- How should the value be distributed?
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 5
Phases
• Design
– Decide on structure
• Planning
– Define operating policies for short term operations
– Annual forecast
• Operation
– Implement operating policies
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 6
Process View
• Cycles
– Customer
– Retailer
– Distributor
– Manufacturer
– Supplier
• Push/pull
– Push : initiated by anticipation of orders
– Pull : initiated by a customer order
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 7
Importance
• Can make or break a company
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 8
Examples
• Gateway- A direct sales manufacturer
• 7-Eleven – A convenience store
• W.W. Granger and McMaster-Carr – Distributors of MRO
(Maintenance, Repair and Operational) products
• Toyota - A Global Auto Manufacturer
• Amazon.com – An e-business
– What examples would you have used?
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 9
Performance - Uncertainty
• Demand uncertainty – customers’ demand for a product
– What else is uncertain?
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 10
Performance - Responsiveness
• Wide ranges of quantities
• Short lead times
• Large variety
• Innovation
• Service level – what do you think this means?
• Supply uncertainty
• Responsiveness comes at a cost
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 11
Performance – Strategic fit
• Match the supply chain’s responsiveness to
the implied uncertainty of supply and demand
• Balance between responsiveness and
effectiveness (cost)
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 12
Performance – Product Life Cycle
• Demand – uncertain to relatively certain
• Margins from high to low
• Availability essential early to capture the market
• Price – unimportant to important
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 13
Performance – Inter-company Scope
• A strategic fit between companies in a supply chain is
important because competition is shifting:
– From company vs. company
– To supply chain vs. supply chain
FACILITIES PLANNING ISE310LSESSION 4
Chapters 1_2, September 3, 2015
Geza P. Bottlik Page 14
“Mr. Osborne, may I be excused? My brain is full”