Supply Chain Management Chapter 16 Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • Companies don’t compete against other companies; they compete against each others’ supply chains Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What is a supply chain? – A supply chain is the network of organizations involved in the movement of materials, information, and money as raw materials flow from their source through production until they are delivered as a finished product or service to the final customer Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • Who are the participants in supply chains? – Multiple suppliers – Wholesalers – Manufacturers – warehouses – Distribution centers – Retailers – Customers Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What drives supply chains? – Money – Materials – Information Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What should supply chain design consider? – The products travelling the supply chain – The services travelling through the supply chain – The information travelling through the supply chain – The structure of the supply chain – How each segment of the supply chain be managed and optimized Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What are the benefits of effective supply chains? – Effective supply chains optimize the value creation process by improving processes, implementing lean principles, optimizing asset allocation, and monitoring quality assurance Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What are the critical elements of supply chain management? – Inventory management – Information sharing – E-commerce – Logistics, – Purchasing Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • Why is information sharing critical when creating an effective supply chain? – organizations need to know what is needed, how much, and when Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • How does e-commerce support supply chain management? – – – – – – – – – Faster purchasing cycle times Reduced inventory Fewer order processing people Faster product or service search and ordering Greater information availability Automated validation and pre-approved spending Less printed material like order forms or invoices Increased flexibility On-line communication Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What is logistics? – Logistics is the process of determining the best methods of procuring, maintaining, packaging, transporting, and storing materials and personnel in order to satisfy customer demand Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What role does purchasing play in supply chain management? – Purchases are driven by several factors, including quality of the goods or services, timing of the deliveries of the goods or services, and the costs associated with purchasing the goods or services Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved Supply Chain Management • What challenges face the development of an effective supply chain? – Synchronization – Fluctuations in demand – Long supply chains – Great distances between supply chain members – Lack of communication – Lack of information sharing Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River, NJ 07458 • All Rights Reserved  ... creation process by improving processes, implementing lean principles, optimizing asset allocation, and monitoring quality assurance Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers. .. chain – How each segment of the supply chain be managed and optimized Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River,... chain? – organizations need to know what is needed, how much, and when Lean Six Sigma: Process Improvement Tools and Techniques Donna C Summers © 2011 Pearson Higher Education, Upper Saddle River,