Download Dia 1 - The Fresh Connection

Supplier
Management
Trade offs
• The Fresh Connection is full of trade offs
– Over multiple roles and within roles
– Sometimes conflicting with role incentives
TCO
Product characteristics
Capacity
mgt
Demand
mgt
Supplier
mgt
Inventory
mgt
Supplier selection
1.
2.
3.
How to select the best supplier?
What criteria did you use?
How to prioritize them?
What is Total Cost of
Ownership?
•
In supply chain management, the total cost of ownership of
the supply delivery system is the sum of all the costs
associated with every activity of the supply stream. The
main insight that TCO offers to the supply chain manager is
the understanding that the acquisition cost is often a very
small portion of the total cost of ownership
(APICS Dictionary, 12th edition)
•
In other words: quantifying all procurement related costs of
a supplier or a component
What is Total Cost of
Ownership? (cont)
•
What related costs can you mention for the Fresh
Connection?
• Product costs
• Transportation costs
• Quality costs
• Interest
• Inventory & payment terms
• Handling costs
• Administration costs
• Warehouse costs
Explore
TFC
Calculate this costs for one of the components in %
How to influence this costs
What does this mean for your supplier policy
Product characteristics
• Product characteristics are important. The focus of
total costs of ownership will change.
Explore
TFC
What is the value per pallet for the components?
What is the volume and value per week per component?
How will the difference in characteristisc influence the
policy?
Product characteristics are
important for designing a supply
chain configuration
Type
Value per
pallet
Purchase
value
Need per
week in
pallets
Pack
518
109K
7
PET
32
292 K
188
Orange
400
406 K
35
Mango
900
72 K
3
Vitamin C
150
1K
0,1
How does this influence inventory policy and supplier
selection?
Product characteristics and
policy
Volume/week
100
Trasnportation
handling and
warehousing
Price and
availability
10
1
Transportation
and
availability
100
500
1000
Value/pallet