Mgt 333 - Exam 1 (Chapter 3)

Front 1

Supply management relationships

Back 1

-Supply management is the hub of a large part of a company's business activity. Relationships with all the other departments as well as the firm's suppliers. Supply management operations cut across all dept. lines

Front 2

Manufacturing/operations

Back 2

-Supply management and manufacturing/operations relationship begins during new product development and identifies when manufacturing transmits its schedule or materials requisitions to materials control. Those documents are used in the procurement schedule.

-Costly special production runs, premium transportation costs, and quality problems are 3 common results of inadequate purchasing lead time.

-Don't want shut down or not full production capacity because you don't have materials

Front 3

Pay more and save more

Back 3

-Saving in manufacturing and assembling costs often can exceed the increased purchase costs
(Ex: using bronze instead of steel has saved the govt thousands of dollars in aircraft elevators. Bronze costs more than steel but savings in machining time offset the increased material cost)

Front 4

Marketing

Back 4

-has a major impact on the firm's sales.
-its' success attributes to the firm's ability to introduce new products in a timely manner (New Product Ideas)
-New products that are based on technology obtained from the firm's supply base, and pricing flexibility resulting from reductions in the cost of goods sold (Supply provides Costs and Information for Potential Inputs)
-Sales Forecasts is the basis for production and purchase schedules and influences capital equipment, advertising, and sales activities budgets

Front 5

Engineering

Back 5

-Product Design & Specs (what materials are needed and if available and can get on time)
-Influences Product Costs (Materials, Manufacturing, Quality, etc.) linked to design specs.
-Influences Supplier Availability and if what is needed can be obtained easily and costly to meet functional need of the customer
-Early Supply/Supplier Involvement(ESI) so Suppliers and Supply mgmt can contribute to the development of new products and services
-Review and Question Specs.
-Standardization
-Make a profitable product

Front 6

Effect on specifications on price

Back 6

-Specs are associated to product costs because of quality, materials, fabrication, and production needs.
-Specs affect the amount of suppliers that can provide the specified materials as well as the ability to find a low-cost supplier
-Specs of quality of materials need to satisfy operations and consumer

Front 7

Early Supply/Supplier involvement (ESI)

Back 7

-Suppliers and Supply mgmt can contribute input to the development of new products and services
-Review and Questions Specs
-Standardiation
-This can cause incompatible designs to be sent to manufacturers and suppliers

Front 8

Quality

Back 8

-is involved in qualifying the potential suppliers.
-Quality professionals should be involved in the Supply mgmt from the development of new products to involvement in sourcing and on through supplier development minimizing quality problems

Front 9

Finance

Back 9

-2 problems
--obtaining funds and overseeing their use.

-Supply chain mgmt is responsible for as much as 80% of financial resources.
-Finance willingness to reimburse suppliers in a timely manner affect supply managements ability to obtain low prices and maintain collaborative relationships

Front 10

Conflicting interest with accounts payable

Back 10

-Accts. payable reports to the CFO and are always trying to gain interest on their investments, and waiting as long as possible to pay suppliers. This conflicts with supply mgmt because then suppliers increase their selling price and then conflicts with supply mgmts efforts to become a preferred customer or to develop collaborative relationships

Front 11

Supply mgmt in nonmanufacturing organizations

Back 11

-the requirements development process is lead by supply mgmt because of the absence of engineering or qualified professionals. They lead this in order to lead cross-functional teams that identifies or describes the needs that need to be satisfied through procurement

-The quality, time to market, pricing elasticity, technology, and continuity of supply combine to have a major impact on the organization's sales and success

Front 12

Changes in the Supply environment

Back 12

-Supply mgmt are responsible for protecting their firms from unexpected threats or shocks from their supply world in the form of price increases and supply disruption.
-Threats can lead to material and labor shortages that can affect price and availability of materials supplies, and services
-Supply mgmt needs to monitor changes in legislation that affect workplace.
-Wars and Conflicts may disrupt the availability of materials and service the firm or suppliers require.
-A consolidation among suppliers like forming of a monopoly.
-Wages, protected wages, and possible labor relations issues