1. OUTLINE
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Chapter 2, 3 and 4 (Chopra)

2. Questionnaire results

3. Using one of the search engines on the web (Google, Yahoo, MSN, Bing, etc.), find a reference to a company that supplies software for managing supply chains. (0.1 points)
Select one of the software packages offered by that company and write a page about what the software does. (0.15 points)
Read chapters two and three of Chopra. Summarize (about a page or two of your opinion– not an outline) what you got out of them. This can be both positive and negative – it is OK to be critical as long as it is well reasoned. Be prepared to discuss them in class (0.25 points)

4. Create an Excel spreadsheet that uses a VBA Macro to calculate a repetitive problem. Display the result as a histogram of generated values. Also, an example of the lookup function to return values from a table (The interest tables from ISE460 are a good example). The grader will test the macro. (0.35 points)

5. Given these data, what is the unit cost of a manufactured item with $45 of material and hours of labor? (0.15 points)
Total labor hours 350,000
Total Material Cost $500,000,000
Indirect overhead (Without material overhead) $35,000,000
Material overhead $5,500,000
Direct labor cost per hour (including benefits) $32.50

6. Next Homework

7. Obstacles
Increasing variety
Shorter life cycles
Demanding customers
Decreasing vertical integration
Globalization

8. Benefits of collaboration
Establishing contacts
Gaining Insight
Joint projects

9. Definition
Benchmarking
Identifying, understanding and adapting outstanding practices from other organizations to improve performance

10. International Chains – what is different?

11. International Chains – what is different?
Greater geographic and time distances
Diversity of demand and supply conditions
Wage rates
Taxes
Incentives
Political climates
Exchange rates
Special laws

12. Cycle time
Definition – the total elapsed time required to complete a process (e.g. 4 years to get an engineering degree, one month to build an airplane)
Little’s Law: Cycle time = Work in process/Throughput
Causes of long cycle times:
Waiting
Old processes that don’t add value
Serial vs. parallel, external vs. internal
Repeated activities
Batching
Excessive controls

13. Measuring Performance
What should measuring performance accomplish?

14. Measuring Performance
What should measuring performance accomplish?
Basis for understanding the system
Influence behavior in the system
Provide information about results
Provide information that will initiate actions to improve the system
Create accountability in individual operations
The concept of Supply Chain Management requires that overall performance be measured, but intermediate points must also be measured to insure accountability

15. Measuring Performance (continued)
Typical internal measures
% orders on time
Inventory turns
Cycle time
Costs/Goods sold
Aging of orders

16. Measuring Performance (continued)
Typical supply chain measurements
Cycle time
% orders on time (service level) or fill rate
Order aging
Comparisons to competitors (Bench marking)
Responsiveness to changes in demand
End items sold/Total costs
Market Share

17. Chapter 4 – Designing the distribution network in a Supply Chain
Move and store product between stages
The structure of the network influences:
Response time
Variety of products
Availability of products
Customers’ experience
Visibility of orders
Returnability

18. Some basic relationships in a supply network
Lower response times require more facilities
Inventory costs increase with the number of facilities
Transportation costs decrease with the number of facilities
Total logistics costs vary parabolically with the number of facilities – there is an optimum number of facilities

19. Major types of distribution networks
Definition: Inventory Turns = Annual Sales/ average inventory
Manufacturing Storage with direct shipping (drop)
Manufacturing Storage with direct shipping and in transit merge
Distributor Storage with carrier delivery
Distributor Storage with Last Mile delivery (not carrier)
Manufacturer/Distributor Storage with customer pickup
Retail Storage with customer pickup

20. Summary
Who owns what matters!
Choice of network has long term consequences
Exclusivity
Customer preference

21. “Mr. Osborne, may I be excused? My brain is full”