16 LOGISTICS MANUFACTURING LEAN LOGISTICS
SCM 460 GLOBAL SUPPLY CHAIN STRATEGY
Dr. Alex Rodrigues
Logistics / Manufacturing Interface
& Lean Logistics
Class Topics
•
Topic 1:
–
•
Describe the steps of Design For Logistics (DFL)
Topic 2:
–
Understand the philosophy of Lean
Manufacturing/Logistics
Procurement Perspectives
• Continuous Supply: Stockouts of raw materials or components can stop production and result in extreme cost.
• Minimize Inventory Investment: One goal of modern procurement is to maintain continuous supply with minimum inventory investment possible.
• Quality Improvement: The quality of finished goods and services is dependent upon the quality of materials and parts used in production.
• Supplier Development: Successful procurement depends on locating or developing suppliers, analyzing their capabilities, and selecting and working with them to achieve continuous improvement.
Procurement Perspectives
• Lowest Total Cost of Ownership: Modern procurement recognizes that although the purchase price of a material or item remains very important, it is only one part of the total cost equation. Service costs and life cycle costs must also be considered.
• Purchase Price and Discounts: Inventory holding costs must also be considered. Economic Order
Quantity (EOQ) can help analyzing trade-offs.
• Service Pricing and Debundling: Purchase price must be debundled from the price of valueadded services (delivery) under consideration
(menu pricing).
• Life Cycle Costs: The total cost of materials or items extends beyond the purchase price.
Manufacturing Perspectives
• Brand Power: The measure of a customer’s preference based on a manufacturer’s reputation, product quality, and supply chain capabilities. The higher the brand power, the higher the manufacturer influence.
• Volume: The traditional perspective is to treat volume in terms of economy of scale. In volumesensitive industries, high capital investment coupled with high changeover costs tends to encourage extremely long production
Dr. Alex Rodrigues
Logistics / Manufacturing Interface
& Lean Logistics
Class Topics
•
Topic 1:
–
•
Describe the steps of Design For Logistics (DFL)
Topic 2:
–
Understand the philosophy of Lean
Manufacturing/Logistics
Procurement Perspectives
• Continuous Supply: Stockouts of raw materials or components can stop production and result in extreme cost.
• Minimize Inventory Investment: One goal of modern procurement is to maintain continuous supply with minimum inventory investment possible.
• Quality Improvement: The quality of finished goods and services is dependent upon the quality of materials and parts used in production.
• Supplier Development: Successful procurement depends on locating or developing suppliers, analyzing their capabilities, and selecting and working with them to achieve continuous improvement.
Procurement Perspectives
• Lowest Total Cost of Ownership: Modern procurement recognizes that although the purchase price of a material or item remains very important, it is only one part of the total cost equation. Service costs and life cycle costs must also be considered.
• Purchase Price and Discounts: Inventory holding costs must also be considered. Economic Order
Quantity (EOQ) can help analyzing trade-offs.
• Service Pricing and Debundling: Purchase price must be debundled from the price of valueadded services (delivery) under consideration
(menu pricing).
• Life Cycle Costs: The total cost of materials or items extends beyond the purchase price.
Manufacturing Perspectives
• Brand Power: The measure of a customer’s preference based on a manufacturer’s reputation, product quality, and supply chain capabilities. The higher the brand power, the higher the manufacturer influence.
• Volume: The traditional perspective is to treat volume in terms of economy of scale. In volumesensitive industries, high capital investment coupled with high changeover costs tends to encourage extremely long production