OPERATION ISSUES IN SUPPLY

CHAIN MANAGEMENT
What is it?

Benefits

Aim
&Results
 Forecasting Techniques
• Qualitative forecasting
(based on opinion and intuition)
• Quantitative forecasting
uses mathematical models and historical data to
make forecasts
• Time series models
are the most frequently used among all the
forecasting models
• Qualitative
Forecasting Quantitative
Methods Methods
-Time series forecasting-
-Jury of executive opinion -Associative forecasting-.
-Delphi method
-Sales force composite
-Consumer survey

Naïve Forecast
Estimate the next period is
equal to the
current/actual demand.
Time Series
Forecasting Models
-Trend variations:
-Cyclical variations
-Seasonal variations
-Random variations:
What is Inventory Management

 Ordering

 Storing

 Using a company inventory’s

 Managing the inventory of the

company
 Effect of Inventory Management
 A system to keep track of inventory
 A reliable forecast of demand
 Reasonable estimates of:
 Holding costs
 Ordering costs
 Shortage costs
 A classification system
Function of inventory management

 To meet anticipated demand

 To smooth production requirements

 To decouple operations

 To protect against stock-outs

 Process Management – Lean
Production and Six Sigma Quality

LEAN PRODUCTION SIX SIGMA QUALITY

TARGET Meet the values that can bring customer A business method that enables a company to
satisfaction improve performance by designing and
monitoring daily business activities to achieve
customer satisfaction

FOCUS Efficiency of process flow to eliminate To prevent the occurrence of production

waste production defects, save manufacturing time, and
minimize costs.
METHOD Value stream mapping, process mapping, DMAIC and DMADV
kaizen (changing for better), etc.
 Process Management – Lean
Production and Six Sigma Quality
(cont.)
example
TPS (Toyota production system) – use just-in-time method:
– They did not store car seats in the factory…. Instead they phoned
the order through & got deliveries 5 hours later…. Just when the
car was ready for the seats to be put in.
– This keeps the factory floor free from extra parts and keeps things
running smoothly which reduce factory size and cost.