SCM 300 ? Module 06 Study Packet Module 06: SCM Integration (Push/Pull, JIT, Postponement, Bullwhip effect, Integration risks) With the basic supply chain ingredients in hand (procurement, logistics, manufacturing) this module looks to demonstrate the difficulties encountered when managers try integrating all of the supply chain pieces. Push and Pull ideologies will be discussed as will the philosophy of JIT. In addition, a list of risks will be explored and potential strategic options will be considered. Finally, during lecture a series of examples about some of these options will be discussed. Reading Assignments: Earth 98-106, 111, 115 Concepts Examples What is the value of each? Lean Systems 98-106 Toyota (4 Principles) 98-99 Close Supplier Ties 102-3 Push/Pull Methods 104 Rocks/Water 100-1 Small Lot Sizes 103 JIT Philosophy 100-1 Kawasaki 101 Quality at the Source/Jidoka 104-5 Terms and Lists Panasonic 102 Uniform Workstation Loads 105-6 Set-up/changeover 103 Toyota (RFID) 105 Standardized Components 106 Poka-yoke 105 New Balance 111 Flexible Workforce 106-7 Univ. of Pitt Med Ctr. 115 Automation 107 Puzzle 130-54 Concepts Terms and Lists Process Integration 131 CRM 133-4 Forward Buying 149 8 SC Business Processes 133-7 EDLP 150 Obstacles to Integration 144-50 Rationing 150 Examples Bullwhip Effect 148-50 Shortage Gaming 150 ViewSonic 130 Activities Causing Bullwhip Effect 148-50 Managing Risk in SC 151-4 Solectron 141 Demand Forecast Updating 148 Wal-Mart 143 Order Batching 149 SCM Basics ? Slides 02-03 What are the basic responsibilities of a supply chain? Define: front-end, back-end, upstream, downstream Push vs. Pull ? Slides 04-09 What is a Push System? What is a Pull System? Are items made before or after they are ordered? What are some of the trade-offs involved in utilizing either a Push or Pull system? Strengths and weaknesses of Push and Pull systems. Just In time ? Slides 10-15 What are the differences between ?Old School American? business philosophy and Lean Manufacturing philosophies? What are the primary goals of JIT systems? Why is JIT more of a business philosophy than just a business checklist? Why are Japanese versions of JIT different versus American versions? Why is ?traditional? JIT such a good fit for Japan? What are the essential elements of JIT? Why are they essential for a successful JIT practice? How does each element provide either a push or pull element that is important to fulfilling the JIT ideals? Supply Chain Strategy Trade-offs ? Slides 16-23 How are the drawings used in lecture helpful in understanding the trade-offs of each strategy depicted Understand how Time, Flexibility, Quality, and Cost are traded in any supply chain strategy. Understand how you can positively impact either Time, Flexibility, Quality, or Cost in designing/managing a supply chain. What is postponement? Why can it be valuable? What are risks associated with postponement? What is the relationship to push and pull systems? What are the costs associated with implementing a postponement system? Creating a Simple Study Guide Understand 3 items below in great detail. Use lists. A. Push Systems - Automated, Speed, Make-to-Stock B. Pull Systems - Skilled Labor, High Performance, Make-to-Order C. Lean/JIT Systems - Mix of the two above (Mostly Pull), Possible Postponement Understand Push/Pul/JIT drawings in Slides (These three lists can easily fit on one page. Try to see logical connections between lists) Supply Chain Challenges and Solutions ? Slides 23-30 How can shrinkage and other operational shortcomings cause inefficiencies? Be able to calculate the number of items required to account for losses throughout the supply chain. (Slides 24-25) What are the PROs and CONs of centralizing your warehouses? Understand the square-root rule calculation. Be able to do problems using the square root formula. (Slides 26-27) What is the bullwhip effect? What are some of its causes? How can the bullwhip effect be minimized? Hopefully the examples discussed during lecture helped you understand how the bullwhip effect happens. Be sure you understand the complexities involved in real-world supply chains. Examples were provided in lecture which hopefully brought to light the issues associated with complex supply chains. Understanding Module 06 These questions are intended to help you see if you understand how this module?s topics all tie together. Try to think of items that would utilize a push system, a pull system, a JIT system. What value does each system offer for the production of that item or service? What are some items in your home that could be made, at least partially, in a system that utilizes postponement? Which portions of those items would you postpone? Think about how different restaurants utilize different strategies. Try to see if you can think of a restaurant that utilizes push, a restaurant that utilizes pull, and one that uses JIT. How about postponement? PAGE PAGE 2
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