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Preface
Acknowledgments
Introduction
In Chapter 2, we will define the supply chain and the companies involved and show several examples. In the postscript (Chapter 15), the transfer of supply chain management to the consumer level is discussed with some personal examples.
The Way Things Were (Are)
Most of the purchasing personnel had never even visited a plant, so they had no idea what factors were important to the plant and its operation. Incentives were paid to the managers based on output, while many of the workers saw no benefit from their efforts.
CONCLUSION
Part of this misconception is not just that the government should take care of American companies, but that companies should protect jobs over profit. Companies need to make the paradigm shift instead of continuing to rely on the government to bail them out.
Understanding Your Supply Chain
PROCESS MAPPING
By using the quality tool of process mapping, a picture of the supply chain can be developed. The next step in the process is to start developing the map of the supply chain for your organization.
ACQUISITION COSTS
When this is done, the inefficiencies of the existing process are transferred to the new operation. Staff should be trained in the requirements of the organization and limits should be set on what they can change.
POSSESSION COSTS
This is a non-operating cost and is a function of the state and municipality in which the facilities are located. I've seen some companies say to the supplier, "The stock is yours and you have to figure out what you're going to do with it." This does not make for healthy suppliers or good relationships.
APPLICATION COSTS
When inventory gets out of control, senior management must be involved to make the decision on how to handle the inventory. Sales personnel must be trained in the application of the products and how and where they can be used.
INSPECTION COSTS
Downtime can cause problems for customers because it creates a potential capacity problem in your operations, which can potentially be covered with overtime, but will increase costs. One customer used a coordinate measuring machine (CMM) to validate all measurements on the finished products.
INTERNAL/EXTERNAL FAILURE COSTS
In today's market, flexibility is one of the critical parts in the supply chain. Many of the contracts were moved to different suppliers, so there was a lot of shifting of business in the supply chain.
THINGS THAT ARE BEYOND OUR CONTROL IN THE SUPPLY CHAIN
Supply chains can be affected by events that are beyond the absolute control of the supply chain members. A full risk analysis must be completed to understand the impact some external events may have on the supply chain and the customer.
Developing a Supply Chain Management Strategy
WHERE DOES SUPPLY CHAIN MANAGEMENT FIT INTO THE MISSION
AND VISION OF AN ORGANIZATION?
SUPPLY CHAIN MANAGEMENT MATURITY MODEL
This is where a supply chain from the original raw material to the consumer is integrated and works together for the benefit of the entire supply chain. The supply chain management strategy should be covered under the broad umbrella of the vision statement for the organization.
HOW ARE NEEDS FORECASTED?
These methods attempt to eliminate randomness in a time series and smooth the curve of the data. Each of the above models was developed to handle a specific form of variation in the data.
HOW MUCH AND WHAT TYPES OF RISKS CAN BE ACCEPTED?
HOW WILL COMPETITIVE ADVANTAGE BE DEVELOPED?
With a new supply chain map completed and understood, the new requirements must be communicated to the organization for this strategy to be successful. This strategy should be planned to protect the relationships developed in the supply chain.
WHAT KIND OF A CUSTOMER ARE YOU?
For years, the Michigan Quality Council had a program called the "Quality Hero." This was a way of recognizing those who provided excellent customer service. The customer's mood can change and this can lead to difficult situations when trying to meet their needs.
INTEGRATING PROCESSES USING AGGREGATE PLANNING
The mission and vision statements are the overarching umbrella for the management of the company and should encompass the supply chain. Discuss some of the risks to consider when managing the supply chain.
Make or Buy: The First Step in Supply Chain
Management
CAPACITY DECISIONS
A good understanding of your manufacturing capabilities and those of your supplier is required when making capacity decisions.
MAKE DECISION DRIVERS
If the supply of the product is controlled, the price can be kept where it is needed to make a profit and meet the needs of the market. Many new products and processes are not patented to maintain the confidentiality of the product or process.
BUY DECISION DRIVERS
If you buy material, you have the flexibility to stop buying it at any time and the consequences can be much less than if special plant or equipment had been bought to do so. You must be aware of the way contracts are written and how and which changes can be made.
Supplier Identification and Evaluation
- UPPER MANAGEMENT SUPPORTSUPPORT
- PRODUCT GROUP SELECTION
- TEAM MEMBER SELECTION
- CURRENT AND POSSIBLE SUPPLIERS LISTSUPPLIERS LIST
- FIRST CUT
- NECESSARY ATTRIBUTES LIST
- MAJOR QUESTION PREPARATIONPREPARATION
- SUPPLIER PACKAGE PREPARATIONPREPARATION
- INFORMATION PROVIDED TO SUPPLIERSTO SUPPLIERS
- RANK AND
The CEOs of the two companies met on the golf course and the supplier tried. Normally around 20 attributes will be defined so that a good picture of the supplier can be developed.
WEIGHT ATTRIBUTE QUESTIONS
- ATTRIBUTE GROUPING
- DO YOUR HOMEWORK
- INTERVIEWS
- EVALUATION OF INTERVIEWS
- PREFERRED SUPPLIER SELECTIONSELECTION
The collected data should be used as a resume for the evaluation of the supplier. If necessary, more detail can be developed than in Figure 5.8 An example overview of the supplier's overall performance.
Selection of a Preferred Supplier
If money is not spent on raw materials and the same number of products are produced, profit increases. The real problem is taking the potential savings and going through the implementation process to turn the potential savings into actual savings.
CONTRACTS
In simple accounting terms, top line revenue will remain the same and cost of goods sold will decrease; as a result, profits will increase.
MANAGEMENT OF PREFERRED SUPPLIER
It may take some disciplinary warnings or action to get people to switch to the preferred supplier.
TRANSFERRING WORK TO PREFERRED SUPPLIER
Thirdly, a discussion should be opened about the preferred supplier that makes the offset material for you. You need to secure as much business as possible to the preferred supplier as soon as possible so that you can begin to take advantage of the benefits of being a preferred supplier.
TOLLING ARRANGEMENTS AND COST EFFECTS
The preferred supplier commented that this could be a way for the eliminated supplier to liquidate inventory. Communicate to all departments the need to work with preferred suppliers and to develop ways to reduce costs for both companies.
BUILDING A POSITIVE RELATIONSHIP
Have you ever worked for a company that lacked credibility in the market and tried to convince suppliers that you are serious "this time?". The supplier's representatives told the customer that they did not want their business because of their past performance.
BUILDING AWARENESS OF THE RELATIONSHIP
This is a very difficult situation to be in and sometimes some dramatic moves or changes need to happen in order for you to really get the supplier's attention. I later learned that many commitments were made over the years and never kept, and the supplier decided that they would no longer deal with that type of organization.
THE PURCHASING DEPARTMENT
This can be a few dollars well spent to gain the support of many people in both organizations. This record can be used to show senior management the benefits they received from the preferred supplier.
DRIVING SUPPLIER PRODUCT IMPROVEMENT
This is important because top management talks in terms of money and the results must be put in terms that will capture their attention. The difficult part proved to be getting the people involved to put the situation behind them.
MANAGING THE SUPPLIER RELATIONSHIP
If difficulties are observed, this should be discussed with the supplier early in the process in order to eliminate surprises and resolve issues. Invoices will need to be verified by the purchasing department to ensure that the discounted and agreed prices have been applied.
International Considerations
LANGUAGE
FAMILY
CRITICISM AND SHAME
INTERPERSONAL RELATIONSHIPS
These techniques will work in the United States, but they will not work in other cultures. Relationships are very important in Asian culture and must be considered if a good supplier relationship is to be developed and maintained.
POVERTY
You should be seen as a friend and someone who cares about them as individuals. Individuals working in government offices abroad have a job to do, and it may not be to get things done to their liking.
APPEARANCE AND BUYING HABITS
To get things off on the right foot, you'll need to learn about their families and share information about yours and other personal areas before the business begins. Remember that you are their guest, you will be treated as a guest, and you should be gracious about what they are willing to do for you.
GOVERNMENT
If there is a question about a prohibited substance here, we must be prepared to deal with the situation. We must be able to work in foreign environments and work for the benefit of both countries.
SUPPLIER CONSIDERATIONS
One concept that must be understood is that the world does not revolve around the United States. China, New Zealand and the Philippines all require manufacturing to be done in their countries.
MONETARY OR OTHER CONSIDERATIONS
Another area to consider is the way age and education are viewed in Asian culture. This is pretty much the opposite of what I see in some cases with students in the United States.
Building Relationships
INTRODUCTION
BUILDING A RELATIONSHIP
The company needs to make better forecasts in combination with the supplier's production capacity. Developing the company's or a supplier's delivery system can be very cost effective for both companies.
MEASUREMENT OF SUCCESS
QUESTIONS FOR CONSIDERATION
The main reason is that new technology must be used to keep the company on the cutting edge. A small supplier may view ISO 9001 as too much cost for what they will receive.
OVERCOMING BARRIERS
The desire for the status quo in both companies must be removed so that problems can be solved at the root and everyone can move beyond just dealing with symptoms. History must be put on the table and processed so that a new page can be turned.
THE IDEAL SITUATION
Old problems should not be brought up again and again after they have been dealt with.
TWO REAL APPLICATIONS
Data should be useful to help improve the relationship for both parties. What method or methods can be used to identify new technology in the supply chain.
Supplier Quality System Surveys, Visits, and
SUPPLIER QUALITY SYSTEM SURVEYS
When research is being developed on the quality system, you should consider which parts of the system you are interested in. If you want to know everything about the system, you are going to make a long research and you may not get the information you need. need.
SUPPLIER VISITS
Depending on the customer's requirements, this can be a critical area for the supplier. At the end of the visit, a meeting with the supplier's people should be held in the conference room.
CONTINUOUS IMPROVEMENT METHODS
Meetings can be arranged to discuss the results and further actions based on the report, but there should be no surprises for the supplier as a result of the visit. What are some of the factors that should be considered and reviewed in the supplier visit.
Supplier Scorecards and Measures
Let's look at the right price: negotiated by the customer's purchasing department and the supplier's sales department. Let's look at the right shipper: how the customer wants the supplier to get the material to them.
Customer Satisfaction
As companies are required to register under ISO 9001:2000 or ISO/TS for automotive companies, measuring customer satisfaction has become an important issue. In today's global market, measuring customer satisfaction is very important to truly understand customer requirements and the business itself.
SURVEYS
At the other end of the scale you have those customers whose needs are met and who are satisfied with your business. They have implemented a program of containment and sorting if any bad products are received, which adds significantly to the cost of the supplier.
QUESTION DEVELOPMENT AND SURVEY IMPLEMENTATION
Open-ended questions can be a good method to get to the customer's real feelings. These can give a very good indication of the problems that may be present with the specific customer.
CUSTOMER NEEDS IDENTIFICATION
Armand Feigenbaum: “Quality is a customer determination based on the customer's actual experience with the product or service, measured against his or her requirements – stated or unspoken, conscious or merely felt, technically operational or wholly subjective – and always a moving target in a competitive market.”. With such a wide variety of issues to address, identifying customer needs is critical to the process of customer satisfaction.
How to Apply Basic
Quality Tools to Customers and Suppliers
SCATTER DIAGRAMS
The question became whether the time in the cooking oven (cooking cycle) is related to the amount of ash found in the coal tar. Data were collected on the ash content in the tar and the cooking cycle times.
HISTOGRAM
Scatter plots can be used to examine relationships between variables within an organization as well as between organizations. When these relationships are revealed and understood, processes can be improved and products can be improved.
TALLY SHEET
As a result of converting the data into a histogram, it is much easier to see what the data looks like and to see the range that the data covers. It becomes much easier to make decisions with data in this more usable format.
PARETO ANALYSIS
This is the type of data that will be observed with two machines fed into the same process.
CAUSE-AND-EFFECT DIAGRAM
CONTROL CHARTS
The P chart is one of the control charts for attributes that may have a variable sample size due to the ratio calculation from the data. The format used for this type of control chart is the same as for the p chart.
WHY–WHY DIAGRAMS
I have found that in most situations where I use control chart data to calculate waste rates, the client is not even aware that these calculations can be made from the control chart information. What you're doing with these calculations is gaining a better understanding of the supplier's business and starting to identify where there might be some opportunities for improvement.
BRAINSTORMING
PROCESS MAPS (FLOWCHARTS)
AFFINITY DIAGRAM
Can you identify an area in the supply chain that could use the scatter plot as an improvement tool?
Materials Management
INVENTORY ISSUES
Fifth, there are costs associated with storing material while it awaits use. There are many forecasting methods that can be used, but they must meet the requirements and flexibility of the supply chain.
LOGISTICS MANAGEMENT
This gives the customer the best possible logistics as the experience of the logistics organization is being used to the advantage of the supplier and the customer. Remember, one of the key issues in the entire supply chain management process is relationships.
Information Technology Applications
