Communicating Customer-Supplier Information and Controlling Resources

Building commitment with Suppliers

·         Concerns

·         Wants

·         Capabilities


Sharing information

·         External Relationships

o   Treat suppliers as partners

o   Just-in-Time (JIT):  long-term, close, fewer suppliers

o   Direct contact between shop and suppliers

o   Treat outside services like in-plant work centers

·         Interplant Relationships

o   Centralized planning/scheduling provides coordination

o   Communication more difficult with long distances

o   Divisions within company are often worst suppliers


Integrating Suppliers

·         Benefits

o   Lower internal direct costs

o   Reduced developmental costs

o   Access to proprietary technologies

o   Spreading overhead costs

o   Focus on areas of expertise


Data Communication

·         Supplier Schedule and Control


o   Be responsive and timely

o   Don’t cry wolf


Electronic Data Interchange (EDI)

·         Between computer terminals and both supplier and customer locations… they are using the same system.


Inter-Enterprise System (IES)

·         Similar to EDI except that it incorporates more business data.


Controlling Storage and Movement of Materials

·         Identifying inventory items

o   Unique

o   Only one number for all uses

o   Assignment of responsibility

o   No resuse

o   Concise

o   Uniformity in length and composition

o   No confusing characteristics

o   Expansion

·         Meaningful Part Numbers

o   Communicate information to people

o   Easier to understand

o   Can detect errors more easily

·         Nonmeaningful Part Numbers

o   Shorter

o   Can be numeric

o   Can use check digits

o   Allow for growth


Storage and Location

·         Warehouse

·         Point of use

·         Point of manufacture


Inventory Location Methods

·         Preassigned Locations

o   Advantages

§  Items always in same place, people know where they are

§  More frequently use items can be located in an easy to get to location

§  “a place for everything, everything in its place.”

o   Disadvantages

§  Inadequate capacity…overflow plan must be devised

§  Potential storage space in storeroom/warehouse wasted

·         Random Locations

o   Advantages

§  Smaller bins and less wasted space

§  Lot/batch identity easier to maintain

§  Picking orders can be scheduled FIFO

§  Change to stock variety can be readily accommodated

·         Zoned

o   Compromise between Random and Preassigned


Stockeeping Principles

·         Security

·         Transaction recording

·         Authorization control

·         Automation when cost effective

·         Perishable stock

·         Lot traceability


Transportation Methods

·         Repetitive schedules

·         Mixed loads

·         Milk runs:  regular pickup of loads from several suppliers

·         Freight Consolidation

·         Local Warehouses:  temporary solution while supplier-customer systems are synchronized (e.g. a storage trailer)

·         Local final assembly operation

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