Chapter 16 - Managing suppliers, customers and quality. This chapter presents the following content: Supply chain management (SCM), managing suppliers, managing inventory, economic order quantity (EOQ), timing of orders under EOQ, assumptions underlying EOQ,. | Chapter 16 Managing suppliers, customers and quality 16- Supply chain management (SCM) SCM is the management of key business processes that extend across the supply chain, from the original suppliers to final customers The supply chain Interlinked customers and suppliers that work together to convert, distribute and sell goods and services among themselves, leading to a specific end product SCM can involve managing costs, accelerating time-to-market of new products, creating close relationships with customers and suppliers continued 16- Supply chain management (SCM) E-commerce—use of electronic transmission media to engage in the buying and selling of goods and services Links suppliers and customers B2B—ecommerce activities between two businesses Electronic data interchange (EDI) links a firm’s computer system to suppliers/customers to allow electronic purchasing and buying Enterprise resource planning (ERP) systems support different functional areas of a business and enable SCM 16- Managing suppliers Improved supplier relationships can reduce supplier and inventory-related costs Analysing supplier costs Activity-based costing can be used to estimate supplier costs Costs of dealing with a supplier, other than the cost of purchased material Costs of purchasing—ordering, receiving and inspection Costs of holding inventory Costs of poor quality Costs of delivery failure continued 16- Managing suppliers Evaluating supplier performance Supplier performance index: the ratio of supplier costs to total purchase price Measures include ability to supply at the contract price, material quality, supplier delivery performance, quality of relationships between employees, union and management Measures may also focus on the purchasing firm’s performance within the relationship 16- 16- Managing inventory Why hold inventory? Cope with uncertainties in customer demand and in production processes Qualify for quantity discounts Avoid future price increases in | Chapter 16 Managing suppliers, customers and quality 16- Supply chain management (SCM) SCM is the management of key business processes that extend across the supply chain, from the original suppliers to final customers The supply chain Interlinked customers and suppliers that work together to convert, distribute and sell goods and services among themselves, leading to a specific end product SCM can involve managing costs, accelerating time-to-market of new products, creating close relationships with customers and suppliers continued 16- Supply chain management (SCM) E-commerce—use of electronic transmission media to engage in the buying and selling of goods and services Links suppliers and customers B2B—ecommerce activities between two businesses Electronic data interchange (EDI) links a firm’s computer system to suppliers/customers to allow electronic purchasing and buying Enterprise resource planning (ERP) systems support different functional areas of a business and .
