1. OUTLINE
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Chapter 3 Supply chain drivers and metrics (Chopra)

2. Transportation
Role: move material
Role in competitive strategy: match required responsiveness
Components of decisions:
Mode (rail, truck, air, ship, pipeline, electronic)
Route and network selection
Sourcing
Who provides transportation services?

3. Information
Role: connects the members of the chain and supports daily operations
Role in strategy: most important underpinning
Components of decisions:
Push/pull
What to share
Forecasting and planning
Pricing
Enabling technologies: Software (EDI, ERP, SCM)

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

5. Benefits of collaboration
Establishing contacts
Gaining Insight
Joint projects

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

7. International Chains – what is different?

8. 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

9. 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

10. Measuring Performance
What should measuring performance accomplish?

11. 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

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

13. 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