Lecture Purchasing and supply chain management (3rd/e): Chapter 4 - W. C. Benton
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Chapter 4:
Materials Management
Purchasing and Supply Chain Management
3rd edition
Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Purchasting and Supply Chain Management, 3rd edition, Copyright 2013 W.
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Materials Management
•
The purpose of materials management
•
To support the transformation of raw materials and component
parts into shipped or finished goods
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
The Five Functions of Inventory
1. Pipeline inventories
2. Cycle inventories
3. Buffer stock
4. Seasonal
5. Decoupling
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Order Cycle as a Link
•
A link or pipeline that facilitates the flow of
information and materials
•
Characteristics
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Length
•
•
The distance between supplier and customer
Modes
•
Method by which information is sent and material
moved
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Order Cycle as a Set of Activities
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Activities
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Order preparation by Customer
•
Order transmission by Customer
•
Order processing by Supplier
•
Order transportation by Supplier
Tasks:
• Order receipt by Customer
1. Physical receipt
2. Unloading
3. Inspection
4. Storage location decision
5. Move to storage
6. Documentation
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Customer Satisfaction
•
•
Objectives of Material Managers
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Customer satisfaction
•
Minimum total materials costs
Customer Satisfaction Dimensions
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Customer service
•
Material availability
•
Quality
•
And others
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Product design and Quality
•
•
•
Design is setting the specifications for a material or
product.
A product designer’s job is to capture, in the product’s
design, the expectations of the customer.
A Materials manager’s job is to ensure that products are
made in the least costly way so that the item qualifies as
a best buy.
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
Objective Quality
•
Approaches to quality
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Subjective quality
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Objective quality
•
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The degree to which material conforms to specifications
High quality products must both:
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Conform closely to specifications
•
•
Objective Quality
Satisfy consumer expectations
•
Subjective Quality
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
MRO Materials and Specification
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•
Maintenance Materials
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Periodical replacement in a piece of equipment
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Resupply by original equipment manufacturer
•
Specified by manufactured part number and the model number of
the unit
Repair Materials
•
Unexpected replacement
•
Usually not carried as inventory
•
Specified by various ways such as drawings and photographs
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
MRO Materials and Specification (cont.)
•
Operating Supplies
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Essential parts of the end item
•
Unit value or size is too small to plan or control usage unit by unit
•
Standard items
•
Specified by manufacturer or industry codes
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Purchasing and Supply Chain Management, 3rd edition, Copyright © 2013, W. C. Benton Jr., All rights reserved.
