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[Audiobook] Administrative Skills | Supply Chain Management Basics
Have you ever wondered how the most successful companies keep their supply chains running smoothly even under immense pressure? From the foundational principles to real-world examples, we go beyond the basics to show you how strategic planning and proactive management can give your business a competitive edge.
Meet Karen and Bob, whose customized cell phone case company exemplifies the challenges and triumphs of effective inventory control and order fulfillment. We'll dissect the three levels of supply chain management—strategic, tactical, and operational—and reveal how to align these levels with your business goals. You’ll get insights into how historical shifts from operational to strategic approaches have revolutionized supply chains, making businesses more agile and customer-focused.
But that's not all. Tune in to hear about the extraordinary turnaround of Blue Pool Corporation led by consultant Craig, who used innovative inventory alert systems to steer the company from the brink of bankruptcy to industry leadership. With case studies from various industries and practical tools like inventory calculators and RFID technology, this episode is packed with actionable strategies to streamline your operations. Don't miss out on learning how Just-in-Time inventory management can revolutionize your approach to stock and customer satisfaction.
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Have you ever wondered how the most successful companies keep their supply chains running smoothly even under immense pressure? From the foundational principles to real-world examples, we go beyond the basics to show you how strategic planning and proactive management can give your business a competitive edge.
Meet Karen and Bob, whose customized cell phone case company exemplifies the challenges and triumphs of effective inventory control and order fulfillment. We'll dissect the three levels of supply chain management—strategic, tactical, and operational—and reveal how to align these levels with your business goals. You’ll get insights into how historical shifts from operational to strategic approaches have revolutionized supply chains, making businesses more agile and customer-focused.
But that's not all. Tune in to hear about the extraordinary turnaround of Blue Pool Corporation led by consultant Craig, who used innovative inventory alert systems to steer the company from the brink of bankruptcy to industry leadership. With case studies from various industries and practical tools like inventory calculators and RFID technology, this episode is packed with actionable strategies to streamline your operations. Don't miss out on learning how Just-in-Time inventory management can revolutionize your approach to stock and customer satisfaction.
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Sign up for our self-paced courses or instructor-led workshops at www.ht-a.solutions
Supply Chain Management Module 1. Getting Started. Supply chain management improves the coordination and relationship between suppliers, producers and customers. It must be kept at a high level of organization to be successful. In today's global economy, goods and services are now pieced together from all over the world and this process can be hectic and complicated. If not managed correctly, with supply chain management, your company and employees will be on target to lower costs, improving efficiency and increase customer satisfaction. This course will provide your employees with the understanding of how supply chain management can improve and help almost any type of business.
Speaker 1:Module 2. Why supply chain management? Module 2. Why supply chain management? Imagine this an entrepreneur has an idea for providing affordable organic linens to a national discount chain, but how will she get her product from a factory in South America to customers in the Midwest? Who will shop at one of the chain stores? What processes are involved? Who will perform? What functions? What about financing and shipping? What will she need to do to ensure satisfied customers? These are the questions answered through supply chain management. So then, what exactly is supply chain management? It is the management of interconnected businesses involved in providing goods or services to consumers.
Speaker 1:Supply chain management involves the finances, logistics and delivery of products or services and requires integrated behavior and cooperation among the chain's firms to be successful. Customer satisfaction is a consequence of supply chain management that reflects the value created by the supply chain firms. It comes through delivering value of what is perceived by the customer as important, not the firm members. Value of what is perceived by the customer is important, not the firm members. Customer satisfaction influences purchasing behavior, customer loyalty, and also serves as an indicator of the supply chain's collaborative success at creating a differential advantage. The differential advantage is what sets the chain apart from its competitors. In this topic, let's look further at how we can create value and promote high levels of customer satisfaction. How we can create value and promote high levels of customer satisfaction.
Speaker 1:Some decades ago, leadership and management experts Peter F Drucker and Stephen R Covey contributed significantly to the field of performance management. Their ideas created new ways in which organizations, both for and non-profit, functioned, and they also set new standards for measuring both personal and professional success. Performance management is the system of activities involved in measuring and ensuring goals are met for individuals, departments and organizations. Performance improvement is the concept of measuring processes or procedures and the changes made to improve the effectiveness of those processes or procedures. Performance improvement is a management approach. Because of the globalization of business and the rapid changes in today's marketplace, an important aspect of the supply management puzzle is how to continually improve performance.
Speaker 1:After assessing their environment, a supply chain manager might realize that they need to develop a low-cost strategy. In this case, the primary focus of this chain would be cost control. The output, or end product, is a major consideration in lowering cost. The gross margin price of goods minus their costs has to sufficiently cover overhead to turn a profit. Additionally, for cost-lowering strategies to be effective, the supply chain must lower its costs without compromising the value or quality of the end product. Cost control might entail making some tasks routine producing standard products, practicing economies of scale, trimming or reducing budgets, implementing process engineering. Supply chain management is a set of management processes in which every step of the process should be on meeting the customer's requirements.
Speaker 1:Product development is the process of supply chain bringing a new product to market. The product can be tangible, for example, stainless steel countertops, or intangible, such as counseling services. The process of product development can be quite lengthy. It may involve steps such as idea generation, business analysis and market research, idea prototypes, beta testing, marketing testing, technical and legal requirements, product pricing, marketing and retailing. Tim's publishing company specialized in home repair do-it-yourself manuals and initially experiences steady growth and success. It has several very popular authors who have a loyal following. Tim decides to enter into the e-book business and initially experiences steady growth and success. It has several very popular authors who have a loyal following. Tim decides to enter into the e-book business but does not sufficiently market this new product. Twelve months after the changes the company is not making a profit. Tim calls in his board of directors for an emergency meeting. They brainstorm and look at what made their company successful and what initially worked. They also analyzed what they are currently doing with the e-books. Tim realizes he did very little market research before releasing the new product.
Speaker 1:Module 3. Key Terms, part 1. Sometimes, purchasing, procurement, materials management, logistics, materials management and supply chain management are used interchangeably. These essential activities are how organizations obtain and deliver materials. They relate not only to a company's cost reduction strategies but also to its return on capital investment. For an organization to operate at optimum efficiency, supply management and procurement need to be clearly defined activities. This module will cover key terms related to supply chains. Procurement and purchasing are similar terms. Purchasing is the process of locating a supplier, buying, negotiating and ensuring delivery. Procurement, on the other hand, is a much broader term that includes purchasing. It also includes storing, transporting, receiving, inspecting incoming materials, supplies and salvaging items. Proactive procurement is a process reflected in five outputs Quality, cost, time, technology, continuity of the supply.
Speaker 1:The upstream and downstream flow of goods, services and finances is what links companies in a supply chain together. The terms upstream and downstream essentially represent the dynamics of a supply chain. Information can also be included in the upstream and downstream flow of a supply chain. Upstream relationships are those involving a company's suppliers. Downstream relationships are those involving clients or customers. An ultimate supply chain is the sum of all the companies involved in the upstream and downstream flow from the initial suppliers to the end customer.
Speaker 1:Raw materials are the basic goods or resources used to manufacture products. For example, crude oil is used to make plastics. Iron is used to make steel. Sometimes you might see the term commodities used instead of raw materials. Commodities are basic goods that can be sold or exchanged for other commodities. Commodities are often sold on large markets like the New York Stock Exchange. Examples of commodities include resources such as crude oil, sugar and gold.
Speaker 1:Forecasting is the use of historical data to predict future trends. Firms use forecasting of customer demand to drive the manufacture of goods as well as the acquisition of raw materials. If a supply chain makes in-depth forecasting regarding raw materials, they can plan options to ensure those raw materials are acquired at a reasonable cost. Forecasting improves the sharing of information and resources downstream and makes scheduling and inventory management more efficient. Forecasting can be quantitative or qualitative. Carrying cost refers to total cost of holding or possessing an item. Inventory Carrying costs includes the following Hand charges, storage and facility fees, cost of equipment used to inventory, labor, operating costs, insurance, shrinkage or breakage taxes, obsolescence, investment costs. The cost to carry is something a supply chain firm can calculate annually. The calculations for annual carrying cost are carrying cost per year equals average inventory value multiplied by inventory carrying cost as a percent of inventory value. Average inventory value equals average inventory in units multiplied by material unit cost.
Speaker 1:James worked as a manager in his company's inventory department. He had to record the materials the company had, order new materials as needed and establish a continuing supply chain. When James's company expanded he had to hire a new employee, kerry. James explained to Kerry that the five things that about the proactive procurement process that should be kept in mind are quality, cost, time, technology and continuity. James told Kerry that he had secured a new supply stream for raw materials from Jim's Plastics and explained how the upstream-downstream dynamic worked between their company and the other company. Soon Carey was caught up to speed with how the department functioned.
Speaker 1:Module 4. Key Terms, part 2. Module 4. Key Terms Part 2.
Speaker 1:In this module we will look more closely at the concept of inventory control and more key terms in supply chain management. What does inventory entail? What are some important aspects of meeting the customer's demands for products and services? Lastly, how can supply chain firms effectively handle returns, despite the number of organizations that may be involved? Supply chain firms effectively handle returns, despite the number of organizations that may be involved? The supply chain inventories are the commercial items being held for sale. Inventories also include the items used in the manufacturing of other products. The inventories in a particular supply chain can be as diverse as the firms in the chain. Inventory control involves the management of these items and should include determining carrying costs, inventory drives, purchasing decisions and high inventories sometimes relate to inflation. The topic of supply chain inventory can be broken into four categories Inventory costs, inventory types, inventory function. Management of supply chain inventories.
Speaker 1:Order generation is essentially the process of obtaining customer business for specific products or services. Order generation may require a number of departments within a supply firm sales, marketing, product development, technical support, project management, research and development, merchandising and customer service. A supply firm can request customers' business through various means direct sales, unsolicited and solicited proposals and quotes. Once the customer recognizes a need and takes action to acquire the product or service, the order is generated. Customer orders can be taken a variety of ways once the need has been established and pricing negotiated. Some common ways of taking orders include direct purchase order or sales orders via face-to-face sales, phone orders, blank purchase orders, purchase order cards, internet sales and online orders. In some cases, a contract may be drawn. When a contract is not drawn, the buyer may detail specifics regarding the need and make a request or invitation for bid RFB, ifb, request for proposal, rfp or request for quotation, rfq.
Speaker 1:Basic order-taking information should include at least eight items 1. Date. 2. Number Identification. 3. Originator. 4. Accounts to be charged. 5. Item description. 6. Date, service item needed or will be shipped. 7. Special shipping or delivery instructions. 8. Signature or sales authorization.
Speaker 1:Order fulfillment, broadly speaking, is the process from the point of sale to when the order is finally delivered to the customer. In particular, however, order fulfillment in the supply chain is a process involving at least four physical activities 1. Acquiring the item from inventory, purchase or production. 2. Preparing the item for shipping. 3. Scheduling the shipment of the item. 4. Preparing shipping documentation. Effective and thorough order fulfillment allows a firm or customer to easily track the order once an order is shipped. One way a supply firm can provide its customers good service is by providing order status reports on the orders it fills, by tracking orders and communicating the information to the customer on a timely basis.
Speaker 1:Supply chain order processing should have plans for managing returns of faulty products or failed services. Returns management or cancellation policies protect both the supplier and customer. Cancellation and return terms should be established before the order is placed. Logistics of returns vary from industry to industry and according to the product. Some companies employ a returns management system which generates a number for identification and tracking purposes. In the case of a service, returns may be a little more difficult to manage. However, some policy should be established for cancellations, malpractice or failure to provide the contracted service.
Speaker 1:Karen and Bob are co-owners of a company that create customized cell phone cases that can be ordered online. Since the introduction of smartphones, their sales have quadrupled. They are not having difficulty in keeping up with the demand. Their ordering system used to involve representatives working directly with buyers at various department and specialty stores, who would fax orders or place the orders online. Karen has noticed some issues in their company. Online orders have to be verified before they are filled, which sometimes takes one to two days. Another issue is one of their suppliers is sometimes slow in getting the raw plastic to them for the cases.
Speaker 1:Module 5. Three levels of supply chain management Do the difficult things while they are easy and do the great things while they are small. A journey of a thousand miles must begin with a single step, lao Tzu. This quote applies just as much today in a global environment as it did thousands of years ago. Small things do indeed lead to great things. Consider small companies that are now international corporations, such as KFC, coca-cola. Moreover, management always begins with a single step that leads to successive steps or levels.
Speaker 1:In this module of the course, we will examine three levels of supply chain management Strategic level, tactical level, operation level. Strategic supply chain management involves what was once considered logistic issues. The new concept of supply chain management itself involves relating its practices to a company-wide strategy. The traditional approach with supply chains was to manage from an operational or planning level. However, to operate competitively in a global environment, supply chain management must be first of all, aligned with the strategic needs of the business. Sometimes, a big challenge for a supply chain is that large corporations may have goals that are both multidimensional and seemingly contradictory. To sufficiently address its needs, a supply chain firm corporation can start by taking three strategic actions 1. Make current activities as efficient as possible. 2. Manage the risks of current activities. 3. Develop an internal capacity for learning, adaptation and innovation.
Speaker 1:The tactical level of supply chain management is very similar to the strategic level. It relates to logistics and is about how to deploy activities. While the strategy is a mindset, the tactic is the go-to-market decision or determination of which tools a firm will use. It is how the suppliers meet their capabilities to a supply chain firm's needs. On the tactical level, the decisions also include factors such as will the supply chain do face-to-face negotiations or online orders? Will a firm issue a RFP or will goods be purchased through an auction? Will they outsource? These are only some tactical questions. There are many.
Speaker 1:For many years, supply chain management was approached from an operational level. Working with suppliers and sourcing were activities the purchasing and operations personnel in the business performed, not the sales, product development, marketing or customer service department. Operations can vary from firm to firm within a supply chain. In some instances, one firm in the supply chain will take a leadership role, regardless of who performs the operations. Some way of monitoring, controlling and documenting operations progress needs to exist.
Speaker 1:The bullwhip effect is a phenomenon that occurs when firms in supply chains fail to accurately estimate demand, to minimize trucking costs or simply to meet a phantom customer demand. Firms may place full truckload orders and overstock inventory. The effect creates a cascade on inaccurate information. The supplier may interpret the firm's large orders as a sign to either carry additional inventory or increase lead times. The overall effect is inventory levels in the supply chain increase and the supply chain becomes bloated with this excess inventory that's been created to meet a fictitious customer demand.
Speaker 1:Pe Engineering is an internationally recognized civil engineering firm supplying tools for water treatment facilities all over the world. It has had trouble in the past with getting supplies on time and has had shipments even lost by one supplier. Transportation costs have increased lately, which has seriously affected the company. Paul and Ernest, the two owners of PE Engineering meet for a discussion on how to turn their 40-year-old company around. They note that during the past three years the company has been experiencing several supplier setbacks and sales reductions. Pe Engineering currently sells $300 million worth of services annually, which is about $150 million less than it was six years ago.
Speaker 1:Module 6. Five Stages of Supply Chain Management. The supply chain has three levels of management. It also has five stages in which goods, services or products cycle through the pipeline. Supply chain managers need an understanding of these stages to effectively plan and to assist with determining critical paths in the operation of a chain's firm. The five stages are 1. Plan, 2. Source, 3. Make, 4. Deliver, 5. Return. 4. Deliver, 5. Return. The plan is the strategy used in supply chain management.
Speaker 1:Planning helps managers to determine where to allocate funds and efforts for the firm's facilities, materials and services. In particular, future construction or production requires competent planning to acquire raw materials or components that may be in demand or limited supply. The actual planning process should begin from information obtained from forecasts, sales, production and economic. The supply manager should use these forecasts to estimate material needs and then break the estimates down into monthly, quarterly or industry-specific time periods. The estimates should be related directly to trends and materials and adjusted accordingly. Another way to plan is to base materials on the analysis of a buyer or special project. Source relates to how the firm chooses a supplier.
Speaker 1:Sourcing is another term for purchasing. Successful sourcing in a supply chain should be driven by a strategic policy instead of tactical approach. A strategic approach allows the supply chain manager to develop a roadmap with the supplier in providing the necessary materials and products. Strategic sourcing has five stages 1. Discovery, finding potential suppliers. 2. Evaluation, determining who to do business with. 3. Selection choosing the right suppliers through competitive bidding, negotiation or both. 4. Development two-way effort to refine relationships and cultivate optimal supply chain service. 5. Management ongoing analysis and supervision of the supplier's ability to meet negotiated responsibilities.
Speaker 1:Make is the manufacturing step. In this stage, the decision of whether to make or buy is always a critical step in any organization. This strategic decision can influence the entire operations of business. On a tactical level, whether to make depends usually on two factors the total cost of ownership and the ability to produce the item. This stage involves the most metrics. In the past, large companies traditionally would opt for making products in-house, which they branded. Now, outsourcing has become the trend for many large corporations, the key question is how much value will making a product add as a percentage of final product or service cost?
Speaker 1:Deliver is the stage in which the supplier provides the agreed-upon goods or services. Some people also call this step the logistics step, because it is where decisions are made about how to coordinate receipt of items by the customer, how to warehouse products, how to select transporters for shipments and invoice customers for payment. At this point, customer satisfaction greatly depends on the efficiency and reliability of the delivery system. This stage is where the supplier's performance is heavily evaluated. Did they deliver? Delivery systems can vary from firm to firm, but in supply chains an integrated system works the best. In some cases, multiple departments within one firm may even be involved.
Speaker 1:Return is a complex part supply chain management because it deals with how to return defective items or goods. The problem is that companies have varied policies and integrating within a chain's network can be quite challenging. Suppliers have to create a responsive and flexible system for receiving defective or excess products back from their customers in the supply chain. Moreover, supply chain managers must be proactive and diligent when supporting customers who have problems with products. Chase's laundering company All Clean recently acquired a municipal contract too, for cleaning public employees' uniforms. Because of the huge number of public employees in the area, this contract will now account for about 20% of the laundering company's business. Besides cleaning uniforms, all Clean also sells and launders commercial linens and floor mats. These linens and floor mats are popular in the area and also account for a fair part of Chase's business. When Chase next meets with a representative of the municipality, he's told that in the next three years the municipality plans to increase its personnel by at least 10 percent and will require increase in Chase's services.
Speaker 1:Module 7. The Flows of Supply Chain Management. The flow of goods, products and services has a definite pattern in supply chain, usually toward the end customer. A supply chain can also be a pipeline with information and finances. The flow can be simple or complex. It can be multi-tiered or reversed. In this module we will look at three flows of supply chain management Product flow, information Flow, finance Flow.
Speaker 1:The product flow in supply chain management involves the conveyance of goods, products and services from the supplier to the customer. This process also includes all back-end processes as well as returns. Sometimes returns are also grouped as an activity under reverse supply chains. The product flow can be one of the following Basic Supply Chain, extended Supply Chain, ultimate Supply Chain, reverse supply chains. The product flow can be one of the following Basic supply chain, extended supply chain, ultimate supply chain. Basic supply and extended supply are quite simple and linear. They essentially include a supplier, a focal firm and customers. However, ultimate supply chains are more complex and are more like networks rather than pipelines. In addition to the same groups that basic chains have, they also include third-party firms and all other entities from the initial supplier to the end customer.
Speaker 1:The information flow involves the conveyance of information throughout the supply chain. This process includes the flow of information on orders and the status of deliveries. It includes information such as forecasting and metrics. It may also include information used for improving the knowledge base in a firm or for learning purposes in other systems. The information flow is an important process in the supply chain because information, whether qualitative or quantitative, drives every decision made. The financial flow consists of any factors related to money flowing through a supply chain. This process flow includes credit terms, payment schedules and consignment and title ownership arrangements. It includes invoicing and quotes. It may also include how returns and customer credits are issued.
Speaker 1:Data warehouses contain a collection of data which organizations use to support management decisions. Data warehouses are important because they can provide businesses a coherent picture at a single point in time. They also provide a place to pinpoint information. Data warehouses may include processes to extract data from operating systems, as well as databases that managers can use. Databases may be stored on a server or desktop. The term data warehousing usually refers to the combination of many different databases across an enterprise. In a supply chain, data warehousing is more complicated because of the various relationships and flows that exist.
Speaker 1:Kim is the CEO of a massive international big box retail chain, kim's Place. This retailer sells almost everything a customer could want, as was the nature of big-box retail stores, kim had been notified that stores on the East Coast were having trouble keeping up with demand. For a product that was only made on the West Coast, orders for the product were made automatically. When the product inventory was low, kim decided to establish a constant product flow that would bring the item to the store once every two weeks, rather than an automated order system. The store didn't have any more problems with keeping the item in stock after that.
Speaker 1:Module 8. Inventory Management. Inventory management is the critical stage in supply chain management because it helps to establish inventory and sales patterns, increase working capital and turn inventory in cash. Inventory management involves various metrics and forecasting. It also involves how firms move their inventory and maintain accurate records. Data warehousing plays a large part in successfully managing inventories in a supply chain. Inventory carrying costs are major expenditures in any business. Inventories vary according to the form and function and include raw materials, finished product, dead stock, perishables and work-in-progress goods. Supply chain managers will need to coordinate between various departments, but especially production and customer service, to determine appropriate levels of inventory. Supply chain managers will also want to examine all relevant forecasts when setting final inventory levels.
Speaker 1:Just-in-time JIT inventory is a commonly used method used to manage inventory levels and production. In this scenario, items are produced right before they are needed for the next step in a process. Items are not produced ahead of time and kept in inventory for a long period of time. Jit production greatly reduces costs and in-process inventory. To keep inventory at appropriate levels and ensure customer satisfaction, supply chains must maintain accurate records. In most cases, 95% accuracy or better is recommended. In most cases, 95% accuracy or better is recommended. Accurate record-keeping helps firms plan, control and organize inventory so the right products are ordered to meet customer demand. Accurate record-keeping also help firms achieve economies of scale and reduce inventory costs, supply chain should have a dedicated software and database system for maintaining accurate records.
Speaker 1:An inventory calculator measures the inventory turnover rate. Inventory calculations provide supply chain managers important data for setting inventory levels. Inventory calculators help determine the rate inventory items are sold and replaced in a specific period of time, such as a year. Inventory calculations can also help supply chain managers determine the quality of goods and set benchmarks. The calculation for inventory turnover is turnover equals cost of goods divided by average. Inventory. Managers can use this calculation to determine the average days in inventory using the following calculation Average days in inventory equals 365 multiplied by turnover.
Speaker 1:Kate, along with several employees, manufactures custom-made novelty bags for retailers in her small home business. Her sales are seasonal with the holiday seasons and special promotions are the bulk of their sales. Kate also makes bags specifically for customers and some with themes from cartoon characters or recent events. Inventory management is a key piece in successful operations and unfortunately it's something Kate doesn't have a good handle on. The holidays are coming and they are anticipating sales to increase 10% from last year. They sold about 1,400 bags to 12 different retailers last year, as well as 300 to individual people. Their inventory is usually 1,500 pieces at an average cost of 25 cents per unit.
Speaker 1:Module 9. Supply Chain Groups. Supply chains are complex relationships among groups that interact to move goods, products and services from suppliers to customers. In most instances, supply chains operate like networks rather than linear chains. Additionally, the relationships are more like partnerships, in which members share risks and rewards. The types of groups involved in supply chain management include suppliers, producers, customers and customers' customers. In this module we look at the role of each group. The supplier in a supply chain is actually where the chain begins. The supplier provides raw materials and unfinished products that are converted into finished products and goods. The supplier can also be the beginning point of a stream of information. The supplier may also have suppliers or partners who provide raw materials.
Speaker 1:The producers are the members in a supply chain who design and manufacture the goods, services and products. The producers work directly with suppliers and customers, as well as other third-party firms such as financiers, market research, technical consultants, delivery services and distributors. The producers also must maintain adequate inventory levels and efficiencies in production to meet customer demand. They must ensure they produce quality products at a reasonable cost. The producers have a great responsibility within the supply chain, since customers may deal directly with customers.
Speaker 1:Customers are the parties in the supply chain who purchase the products, goods or services. A supply chain can have many customers. For instance, a producer is a customer of the supplier. Intermediate partners are customers for each other In the supply chain. The customer's demand drives production and inventory levels. Forecasting is based on the customer sales. Customer and consumer are interchangeable terms. The consumer and supply chains choose the type and quality of purchases, as well as select the appropriate suppliers. The customer's customers in a supply chain are sometimes referred to as final customers. They are the parties who purchase the final products. The consumers For instance, the customer's customer for a producer may be a wholesaler or retailer. The customer of the retailer is the general consumer or ultimate customer. A big job of product developers and marketing is to influence the behavior of these customers.
Speaker 1:Perry runs a leading telecommunications equipment firm. His company's product portfolio manufactures relatively expensive, highly engineered products that lack some features of their competitors. Perry is at a pivotal point in his business in terms of how it will move forward. In a recent podcast and press conference, perry indicated the firm is at the brink of stormy weather as the company tries to keep abreast through industry changes and respond to customer demand, it struggles with high supplier costs and excessive inventory levels. Moreover, many of its processes are currently spread across a large enterprise, which excessive inventory levels. Moreover, many of its processes are currently spread across a large enterprise, which affects lead times.
Speaker 1:Module 10. Tracking and Monitoring. Tracking and monitoring inventory production and sales is important for supply chains, as with any enterprise. However, with supply chains, these activities can be more complex and require a great deal coordination. In this module, we will look at ways to track and monitor supply chain activities. Some key agents for tracking and monitoring include Dashboard, rfids, alert Generation, stock Keeping Unit. Sku.
Speaker 1:Dashboards help supply chain managers monitor, analyze and manage supply chain performance. Dashboards are important management tools and provide visual, real-time information. Dashboards should include details on the inventory and alerts for when inventories reach certain levels. Supply chain managers can use a dashboard to gauge the status of the supply chain and make critical decisions. The Federal Trade Commission estimates US businesses lose almost $300 million in goods and inventory that's been lost or undelivered.
Speaker 1:One way to track goods through a supply chain is to use radio frequency identification RFID technology. The technology uses handheld computers, barcodes, scanners and RFID tags to track inventory. Shipments are barcoded and scanned as they proceed through the chain. If a shipment becomes missing, managers can refer to information that's been uploaded to a server to trace its location. That's been uploaded to a server to trace its location. Alert generation helps prevent surprises in supply chains and improve the overall efficiency of operations by providing automatic messages or alarms. This technology may be coupled with a dashboard or some other monitoring equipment. Alert generation not only refers to the actual alert, but methods for dealing with alerts. The method should identify levels response alert, but methods for dealing with alerts. The method should identify levels response.
Speaker 1:The stock keeping unit, sku, is yet another method to keep track of inventory. Skus are numbers assigned to identify specific products. Optimally, skus are created from real products. However, a challenge in supply chain management is the proliferation of SKUs. After cross-checking, sometimes managers find multiple SKUs for the same product. Aaron's Prosthetics Company leads the medical supply industry in producing high-quality orthopedic prosthetics. Aaron's firm has won many industry awards and is always looking for ways to improve their products and increase customer satisfaction. Aaron has recently assigned a task force to help improve its lean manufacturing techniques. The task force includes independent consultants, suppliers, product development engineers, production managers, an information technology expert, a world-renowned orthopedic surgeon and a supply chain manager. Together, they weigh the pros and cons of the various inventory monitoring systems and decide that RFID chips are the most efficient way to monitor individual prosthetic shipments. Manager. Together, they weigh the pros and cons of the various inventory monitoring systems and decide that RFID chips are the most efficient way to monitor individual prosthetic shipments.
Speaker 1:Module 11. Supply Chain Event Management. Supply chains are complex networks with special requirements for successful operation. At any point within the chain, events can occur to upset the flow further downstream. The primary role of a supply chain manager is to not only manage purchases, track and monitor assets, but to understand the different problems that can occur to impede flow and prevent these. In this module we will examine inventory alerts, supplier alerts, bottlenecking.
Speaker 1:Being proactive, inventory alerts allow the supply manager to know when inventory levels are low. As inventory reaches a minimum level, the supply manager can then decide whether to purchase additional stock or keep levels low. Inventory alerts should provide information on devices in the network as well as provide reports. The inventory reports give managers a quick snapshot of the chain. Supplier alerts are similar to inventory alerts because they provide status information. However, supplier alerts are from the supplier and tell managers when it is time to order new inventory or when shipments may be late. Supplier alerts may come by email or some other electronic means. They are usually preset automatically to a list commonly ordered from the supplier.
Speaker 1:A bottleneck occurs when the performance or capacity of an entire system is affected by a single event. Bottlenecking can occur anywhere in the supply chain. For instance, a limited number of components or resources can delay or even stop production. This further affects deliveries to customers. Supply managers have a great responsibility in keeping the free flow of products, information and finances through a chain. Any number of events can occur to impede that flow. The best method for managing supply chains is for managers to be proactive. Managers should use resources such as monitoring reports and KPI key performance indicator metrics to make informed predictions about what may happen in the chain and work to ensure that supply chain performance is optimized.
Speaker 1:Blue Pool Corporation is the world's leading home appliance manufacturer. They had begun to lose business to competitors because of their inability to keep up with customer needs and newer technology. At one point, their sales were down 92%. Things were looking pretty bad. They had massive layoffs and were at the brink of bankruptcy. At the last minute, the board brought in a consultant, craig, who made some turnaround suggestions. Craig begins implementing many changes, starting with an inventory alert system that will alert supply managers when the stock of Craig. Who made some turnaround suggestions? Craig begins implementing many changes, starting with an inventory alert system that will alert supply managers when the stock of a product is low. He also holds a seminar with the supply managers and encourages them to be proactive in their jobs rather than reactionary.
Speaker 1:Module 12. Wrapping Up. Although this workshop is coming to a close, we hope that your journey to improve your supply chain management skills is just beginning. We wish you the best of luck on the rest of your travels. Words from the wise Jack Welch An organization's ability to learn and translate that learning into action rapidly is the ultimate competitive advantage. Henry R Luce Business, more than any other occupation, is a continual dealing with the future. It is a continual calculation, an instinctive exercise in foresight. Peter Drucker Checking the results of a decision against its expectations shows executives what their strengths are, where they need to improve and where they lack knowledge or information.