Basics of Supply Chain Management (St. Lucie Press Apics Series on Resource Management)

259 Pages·2000·6.97 MB·English

by  Lawrence D. Fredendall

B A S I C S O F
Supply Chain
Management
The St. Lucie Press/APICS Series on Resource Management
Titles in the Series
Applying Manufacturing Inventory Classification
Execution Systems Innovation: Paving the Way
by Michael McClellan for Electronic Commerce and
Vendor Managed Inventory
Back to Basics: by Russell G. Broeckelmann
Your Guide to
Manufacturing Excellence Lean Manufacturing:
By Steven A. Melnyk Tools, Techniques,
and R.T. “Chris” Christensen and How To Use Them
by William M. Feld
Enterprise Resources Planning
and Beyond: Macrologistics Management:
Integrating Your Entire A Catalyst for
Organization Organizational Change
by Gary A. Langenwalter by Martin Stein
and Frank Voehl
ERP: Tools, Techniques,
and Applications for Restructuring the
Integrating the Supply Chain Manufacturing Process:
by Carol A. Ptak Applying the Matrix Method
with Eli Schragenheim by Gideon Halevi
Integrated Learning Basics of Supply Chain
for ERP Success: Management
A Learning Requirements by Lawrence D. Fredendall
Approach and Ed Hill
by Karl M. Kapp,
William F. Latham, Supply Chain Management:
and Hester Ford-Latham The Basics and Beyond
by William C. Copacino
Integral Logistics Management:
Planning and Control of Handbook of
Comprehensive Business Processes Supply Chain Management
by Paul Schönsleben by Jim Ayers
B A S I C S O F
Supply Chain
Management
by
Lawrence D. Fredendall
Ed Hill
The St. Lucie Press/APICS Series on Resource Management
St. Lucie Press
Boca Raton • London
New York • Washington, D.C. Alexandria, Virginia
disclaimer Page 1 Monday, November 27, 2000 1:35 PM
Library of Congress Cataloging-in-Publication Data
Fredendall, Lawrence D.
Basics of supply chain management / by Lawrence D. Fredendall and Ed
Hill.
p. cm. — (St. Lucie Press/APICS series on resource management)
Includes bibliographical references and index.
ISBN 1-57444-120-5
1. Business logistics. 2. Materials managment. I. Hill, Ed, 1947– .
II. Title. III. Series.
HD38.5.F738 2000
658.7—dc21 00-011246
CIP
This book contains information obtained from authentic and highly regarded sources. Reprinted material
is quoted with permission, and sources are indicated. A wide variety of references are listed. Reasonable
efforts have been made to publish reliable data and information, but the author and the publisher cannot
assume responsibility for the validity of all materials or for the consequences of their use.
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used only for identification and explanation, without intent to infringe.
© 2001 by CRC Press LLC
St. Lucie Press is an imprint of CRC Press LLC
No claim to original U.S. Government works
International Standard Book Number 1-57444-120-5
Library of Congress Card Number 00-011246
Printed in the United States of America 1 2 3 4 5 6 7 8 9 0
Printed on acid-free paper
920045_CRC14_SL1205_FM 11/15/00 10:11 AM Page v
Dedication
I wish to dedicate this book to my wife,Elaine Malinowski Fredendall
Lawrence Fredendall
To my wife,Patricia,and our daughter,Kelly,I dedicate this book
Ed Hill
v
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Contents
SECTION I: HISTORY AND INTRODUCTION
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Supply Chain Management Evolution
Power ofSupply Chain Management
What Is New about Supply Chain Management?
Collaborative Planning
How to Implement Supply Chain Management
Examining the Basics ofSupply Chain Management
SECTION II: FUNDAMENTAL CONCEPTS
2 Management Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The Manager’s Role
Strategy
Competitive Advantage
Volume and Process Choice
Order-Winning Characteristic
Order-Qualifying Characteristic
Order-Losing Characteristic
Four Competitive Priorities
Design for Manufacturability
3 Performance Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Net Profit
Break-Even Point
Cash Flow
Return on Investment (ROI)
Internal Measurements
Supply Chain Performance Measures
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viii (cid:2) Basics of Supply Chain Management
4 Variance and Dependent Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
What Is Variance?
Dependent Events
Interaction ofVariance and Dependent Events
Importance ofVariance in the Supply Chain
5 Basics ofQuality Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Definition ofQuality
Juran’s Quality Trilogy
Total Quality Management
The 7 Quality Control Tools
Summary
6 Operating Environments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Customer Order Lead Time
Process Choice and Layout
Capacity Decisions
Bottlenecks
Summary
7 Basics ofConstraints Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Protective Capacity
Types ofConstraints
Drum–Buffer–Rope
The Five Focusing Steps
Summary
SECTION III: CUSTOMER ORDER CYCLE
8 The Customer Linkage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Forecasting
Common Forecasting Methods
Demand Management
9 Design and Management ofthe Transformation . . . . . . . . . . . . . . . . . . . 109
Review ofVolume and Layout Decisions
Manufacturing Planning and Control Systems
Influence ofSupply Chain on Demand Management
Detailed Material Planning
Detailed Capacity Planning
Just-in-Time (JIT)
SECTION IV: MANAGING FOR IMPROVEMENT
IN THE SUPPLY CHAIN
10 Planning,Controlling,and Improving the Supply Chain. . . . . . . . . . . . 137
Total Productive Maintenance
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Contents (cid:2) ix
Continuous Improvement
Focused Factory—JIT tool
Simplification
Standardization
11 The Synchronized Supply Chain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Playing “The Beer Game”
There Is a Solution
The Same Solution Will Apply to Any Supply Chain
12 Partnering with Suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
Supplier Relationships
Supplier Involvement
13 Quality Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
Quality Function Deployment (QFD)
ISO 9000 Quality Management System
QS 9000
Malcolm Baldrige National Quality Award
Standard Problem-Solving Methods
14 Work Teams. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Cross-Functional Work Team
Self-Directed Work Team
Empowerment
Benefits ofTeams
15 Materials Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
Little’s Law
Inventory Management
Types ofInventory
Inventory Policy
Order Quantity Rules
Inventory Classification
Cycle Counting
Materials Requirements Planning
16 Purchasing and Distribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Purchasing Cycle
Supply Problems
Logistics
Integrated Logistics
17 Information Technology and Supply Chain Management. . . . . . . . . . . 215
Internal Data Integration
Advanced Planning Systems
ERP and the Internet