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Dr.T.T.Narendran
MODULE 3
Historical Background
Inventory lot-sizing models Time-series forecasting Production Planning & Control Purchasing Sales & Distribution
Management Science II
Dr.T.T.Narendran
Evolution
Management Science II
Dr.T.T.Narendran
Or., Is It This ?
Suppliers
Plants
Distribution Centers
Warehouses
Customers
Management Science II
Dr.T.T.Narendran
Customers
Distributor s
Supplier
Factories/ Plants
Management Science II
Dr.T.T.Narendran
MANUFACTURERS
CUSTOMERS
DISTRIBUTORS/ WAREHOUSES
Management Science II
Dr.T.T.Narendran
Decisions
Temporal
Functional
Objectives Of Purchasing
Provide uninterrupted flow of materials Buy competitively and wisely Minimize inventory holding costs
Management Science II
Dr.T.T.Narendran
Source development To develop good vendor relationships Achieve maximum integration with other departments Train purchase personnel To develop policies and procedures to achieve objectives (1-7)
Right time
Management Science II
Dr.T.T.Narendran
Right Quality
Involves many factors: Price, installation cost, maintenance cost, life expectancy, market availability, workability and attitude of users Must balance three major considerations How to determine ? How to define ? How to control ?
Right Source
Influences the other 4 Rights Supplier goodwill Supplier identification (yellow pages), evaluation / rating and selection Buyer Seller relationships and ethics Factors to be considered include Quality, cost, delivery, credit terms distance etc In periods of stability, prosperity, recession
Management Science II
Dr.T.T.Narendran
Right Price
Perfect competition Imperfect competition Monopoly Analyze price lists Competitive bidding Negotiation Fixed price Cost type
Right Quantity
Inventory Control traditional approach Material Requirement Planning (MRP) Just In Time (JIT) and Zero Inventory
Right Time
Timing Policies: Purchase according to current requirements (1 to 3 Months) Purchase according to market conditions
Management Science II
Dr.T.T.Narendran
Hand-to-mouth buying Forward buying (3 to 12 months) Speculative buying Depends on lead times Decides When to order JIT concepts
Management Science II
Dr.T.T.Narendran
Production Decisions
QUALITY
MANPOWER MANAGEMENT
Process Selection Service Operations Design Choice of Technology Process Flow Analysis Layout of Facilities
INVENTORY MANAGEMENT
Management Science II
Dr.T.T.Narendran
Management Science II
Dr.T.T.Narendran
Centres,
Water and
times and
Management Science II
Dr.T.T.Narendran
P R O D U C E R
DISTRIBUTION
C O N S U M E R
ONSUMER
Management Science II
Dr.T.T.Narendran
Physical distribution
Facilitating
Breaking Bulk
Storage
Physical Distribution: Vehicle Routing Decisions
Role Of Information Technology In Scm IOIS Inter-organizational Information System EDI: Electronic Data Interchange ERP: Enterprise Resource Planning
Management Science II
Dr.T.T.Narendran
Barcode System Identifying products, services, assets and locations throughout the world Data Mining and Warehouse (Database) Intranet ( within companies) Extranet (between partners) Internet (WWW World Wide Web) Decision Support System
Management Science II
Dr.T.T.Narendran
Tactical
Operational
Inventory control Production / distribution coordination Order/freight consolidation Vehicle routing/scheduling Workforce scheduling
Management Science II
Dr.T.T.Narendran
Deterministic
Stochastic
Hybrid
Heuristic
IT Driven
Simulation
Network Design
Optim al Contro l
Dynamic Programmi ng
WMS
ERP
GIS
WMS Warehouse Management System ERP Enterprise Resource Planning GIS Geographic Information System
Management Science II
Dr.T.T.Narendran
Deterministic Models
Assumption: Model parameters are known with certainty.
Stochastic Programming
Some of the variables are not deterministic. Such models are appropriate
When data evolve over time and decisions need to be made prior to observing the entire data stream.
Management Science II
Dr.T.T.Narendran
Heuristic Models
Intelligent approach that attempts to find good solutions. Empirical approached problem solving Thumb Rule Quick and Effective No guarantee of optimum Adequate for real life
Simulation Models
Both strategic & operational elements. Evaluate alternative policies or decisions. Dynamic nature of supply chains.
Hybrid Models
Both deterministic & stochastic models. Inventory-theoretic & simulation models. Deal with both certainty and uncertainty.
Management Science II
Dr.T.T.Narendran
Hybrid Models
Both deterministic & stochastic models. Inventory-theoretic & simulation models. Deal with both certainty and uncertainty.
It Driven Models
Warehouse management system (WMS) Transportation management systems (TMS) Integrated transportation tracking, Collaborative planning and forecasting replenishment (CPFR), Material requirement planning (MRP), Distribution resource planning (DRP), Enterprise resource planning (ERP), and Geographic information systems (GIS).
Management Science II
Dr.T.T.Narendran
Neural Network
Ant Colony
Particle Swarm
Lagrangean Relaxation
Dynamic Programming
Branch & Bound
Tabu Search
Simulated Annealing
Genetic Algorithms
Savings Procedure
Mathematical Programming
Preference Based Approach
Intuitive Based Approach
Simulation Based Approach
Improvement (2-opt, 3-opt)
Insertion Procedure
Cluster-First Route-Second
Route-First, Cluster-Second
Graphics Capability
Management Science II
Dr.T.T.Narendran
Accurate Timely access Defining the right amount of information for each level
Management Science II
Dr.T.T.Narendran
Management Science II
Dr.T.T.Narendran
Implementation
Co-operation, not Competition : Focus on jointly solving problems, not looking for someone to blame.
Management Science II
Dr.T.T.Narendran
It Difficulty
Management Science II
Dr.T.T.Narendran
Management Science II
Dr.T.T.Narendran
Problem
Solution
Benefits
Possible Drawbacks
Large inventories
Quick response
Modular
Less variety
Quality cost
Outsourcing
Loss of control
Less variety
Management Science II
Dr.T.T.Narendran
Management Science II
Dr.T.T.Narendran
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