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Supply chain management (Week 8) (Integrated supply chain opportunities…
Supply chain management
(Week 8)
Primary selection criteria of supplier
Engineering / research / innovation skills
Production process capability
Distribution / delivery capability
Quality systems & performance
Facilities / location
Financial & managerial strength
Information systems capability
Integrity
Supply chain strategies
Many suppliers
Commonly used for raw materials
Purchasing typically based on price
Suppliers compete with each other
Few Suppliers
Buyer form long term relationship with supplier
Suppliers more willing to participate in JIT programs
High cost of changing suppliers
Vertical integration
Developing ability to produce goods / service previously purchased
Forward - Towards customer
Backward - Towards supplier
Risky with rapid technological change
Can improve cost, quality & inventory
Joint ventures
Formal collaboration
Enhance skills
Secure supply
Reduce costs
Cooperation without diluting brand or concede competitive advantage
Keiretsu
Middle ground between few supplier & vertical integration
Supplier becomes part of company coalition
Expects long relationships, provide technical expertise & stable deliveries
Virtual Companies
Rely on variety of supplier relationships to provide services on demand
Fluid organisation boundaries, allow creation of unique enterprises to meet changing demands
Lean performance, low capital investment, flexibility & speed
Vendor negotiation strategy
Cost-based price model
Supplier open book to purchaser
Market-based price model
Price based on published, auction, indexed price
Competitive bidding
For infrequent purchases, but difficult to establish long term relationships.
Integrated supply chain opportunities
Accurate pull data
Lot size reduction
Single stage control of replenishment
Vendor managed inventory (VMI)
Collaborative planning, forecasting & replenishment
Blanket orders
Standardization
Postponement
Drop shipping
Pass-through facility
Channel assembly