Chapter 16 Other Supply Responsibilities ©McGraw-Hill Education. All rights reserved.

Key Question Addressed in Chapter 16 Which other supply chain activities might the supply function be involved in or have direct responsibility for?

Other Supply Responsibilities Receiving Logistics and warehousing Inbound and outbound transportation Production planning Accounts payable Investment recovery ©McGraw-Hill Education. All rights reserved. 3

Receiving The first step in the internal supply chain A critical part of the acquisition process Closure of the contract with the supplier Buying firm accepts responsibility for the goods Involves inspection, physical handling of goods, and information processing Receiving inspection ensures goods arrive in the quantity and condition in the purchase order

Logistics and Warehousing Warehousing and inventory storage – internal function, or – outsourced to a third-party logistics firm (3PL) Supply involvement – direct accountability for warehouse personnel or – for 3PL supplier selection and oversight – Trend: outsource logistics activities

Inbound and Outbound Transportation Ensure proper, cost-effective delivery May be one of largest cost components Suppliers may have responsibility (FOB destination) Inbound: company-owned fleet or dedicated carriers Supply frequently has input or direct control over inbound transportation, especially for JIT deliveries Cost reduction and improved utilization rates if inbound and outbound transportation-related resources are coordinated

Production Planning Involves short-, medium- and long-term schedules for controlling inventory and production schedules Relies on: – sales forecasts – delivery and storage of key raw materials with suppliers – operations implementation Supply plays key role on team or manages

Accounts Payable Payment terms included in purchase contract Problems if: – Changes to the original order (engineering changes) – Mismatched paperwork (bill of lading, PO) – Buying organization delays payment to finance short- term working capital Accounts payable reporting to Supply – familiarity with the supplier and the order – opportunities to reduce transaction costs/headcount – ensure payments made on time

Investment Recovery Effective, efficient, and profitable recovery and disposal of scrap, surplus, obsolete, and waste Focused on – stringent environmental regulations – rising disposal costs – end-to-end supply chain and return loops to recapture initial materials investment through remanufacturing, repair, reconfiguration, and recycling – new methods to avoid solid waste generation – better means of disposing of wastes