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Chapter 10
Operations As a Competitive
Weapon
Operations Strategy
Project Management Process Strategy
Process Analysis
Process Performance and Quality
Constraint Management
Process Layout Supply Chain Strategy
Lean Systems Location
Inventory Management
Forecasting
Sales and Operations Planning
Resource Planning
Scheduling
Home Commercial
customers customers
Inventory level
Scrap flow
© 2007 Pearson Education
Supply Chain for
Manufacturing
Raw materials (RM): The inventories needed for
the production of services or goods.
Distribution Distribution
center center
Tier 1
Tier 2
Tier 3
Using Inventory
Estimator Solver
Weeks of supply =
$2 mil/($10 mil)(52 wks.) =
10.4 weeks
Inventory turns =
$10 mil./$2 mil. = 5
turns/yr
© 2007 Pearson Education
© 2007 Pearson Education
Application 10.1
Bullwhip Effect
Quantity ordered
Time
© 2007 Pearson Education
© 2007 Pearson Education
External
Value-Chain Linkages
External Consumers
External Suppliers
Volume changes.
Customers may change ordered quantity or
delivery date.
Service and product mix changes.
Customers may change the mix of ordered items.
Late deliveries.
Late deliveries can force a switch in production
schedules.
Underfilled shipments.
Partial shipments can cause a switch in
production schedule or quantity produced.
© 2007 Pearson Education
Internal Causes of
Supply Chain Disruption
at
Each morning Campbell uses Electronic Data
Interchange to link with retailers.
Retailers inform Campbell of demands for its
products and the current inventory levels in their
distribution centers.
Campbell determines which products need
replenishment based on upper and lower
inventory limits established with each retailer.
Campbell makes daily deliveries of needed
products.