Basics of Supply Chain Managment (Lesson 1) - Free download as PDF File .pdf ) APICS. Certified production and inventory management (CPIM) Module 1. APICS CPIM certification 2. Key Resources BSCM Participant Guide CPIM Exam Content Manual APICS Dictionary 3. Basics of Supply Chain Management. APICS CPIM Part 1 -- Basics of Supply Chain Management. (BSCM) 10 Sessions , 40 Hours. This course is part 1 of a 2-part series intended for Operations and.

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This certified course delivers the foundations of supply chain management to a is the first module in the APICS CPIM programme but is equally valued as a. Basics of Supply Chain Management. Instructor Guide Version ii. © APICS. Session 2—Demand Management. Demand Management Processes. Management (CPIM) certification program is recognized Over , professionals have earned the APICS CPIM Basics of Supply Chain Management.

This course is designed for anyone working in production planning, distribution, the supply chain or downloading.

Providing up to date education in the areas of supply chain, downloading and distribution, production planning and ERP, your participation in these courses will help you better develop your understanding of production and inventory management.

CPIM is your Answer! More than 60, people have earned the Certified in Production and Inventory Management - CPIM designation since , and thousands continue to pursue certification each year. The new CPIM has 2 parts.

Part -1 consists of just 1 module, Basics of Supply Chain Management with it's own 3. Part-2 has another exam of 3. These online learning tools provide a personal path to success through interactive web-based study tools that test your understanding and retention of the topics learned in the reading materials. You have access to all the web-based study tools for one year. Create a SmartStudy plan using your Pretest results to identify your most challenging topics and estimate study time.

Instead, they rely on providing knowledge and skill. Services also generate wealth. For example, the services of an architect may be required in the transformation of the bricks into a useful building. How do we increase our wealth? We can do this by adding value to a product or service. The more value we add, the more our wealth increases.

The value of a pile of bricks can be increased by adding a wire rack or two along with instructions on how to build a barbecue. To add value, we need to design effective production processes and operate them efficiently. Unit 1 Competition, Quality, and Customer Expectation The way in which a business operates is affected by the environment it finds itself in. Most businesses compete with other companies that provide similar products or services.

In the end, the market decides on the winners, based on the quality of the product offering and the ability of the organization to meet the needs of its customers. The major external factors that affect companies are: Competition Quality Customer Expectations. Competition Most companies can identify competitors in their business. For example, when you download a new car, you have the choice of several dealerships in your area, and a choice of many more makes of car.

Where previously, it might only have been cost effective to download a car from a native car manufacturer, now, you can choose from Japanese, Italian, Russian, American, British and many other types of car. If the lawn mower you sell persistently chews up the grass while spewing stones and other small objects like lethal weapons to either side, you have lost their custom and potentially that of many others as they will tell their story to all and sundry.

Suppliers need to identify the elements that provide value to a customer. There are several elements of a product or service that are important to the customer, including: The characteristics that are important to the customer will differ from market to market and from customer to customer. Unit 1 Order Qualifiers These are the characteristics of your product that are the absolute minimum for you to compete in the market place.

A garden chair that will collapse under 20 kilos of weight will not attract any customers. To qualify for consideration, it must be capable of supporting an adult weight. Order Winners Order winners are characteristics of your product or service that caus e customers to choose your products and services over that of your competitors. Understanding the needs of your customers is vital.

Good communication is needed to achieve that understanding. You need to work with customers to solve design and production problems, ensuring a spirit of free and open sharing of knowledge and opinions. As customer expectations rise and product development continues to improve, characteristics that once won an order will be expected as order qualifiers.

It must also have comfortable seats, safety features, and a good audio system. Which of the following objectives is not needed to increase profit? Best quality department B. Maximum customer service. Review Q C. Accurate production forecast D. Lowest inventory investment. Strategy To meet customer expectations, companies must focus on the market and tune their operations to meet the changing needs of that market. All functions in the company must contribute to a winning market-based strategy.

Business Strategy To meet customer expectations, companies must focus on the market and tune their operations to meet the changing needs of that market. To meet customer expectations, lead times are very important, particularly delivery and cumulative lead time. Delivery lead time is the time from the receipt of the order to the delivery of the product.

Cumulative lead time see below is the longest planned length of time to accomplish the activity. Ideally, the lead time should be as short as possible, but the delivery lead time is affected by the time it takes to manufacture the goods.

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Unit 1 In Figure 1 below, the cumulative lead time begins when the planner records the need for the lowest level item, and ends when the finished product is available for shipment.

Place Dock Date Date Receipt. downloadd Planner downloader Vendor Recv. Manufacturing Strategy Manufacturing strategies should aim to reduce delivery lead times where possible. The process of manufacturing from beginning to end is very long. The time that would elapse between design, download, manufacture, assembly and shipping of an item would be unacceptably long for most products.

Therefore, three common manufacturing strategies may be used: Make-to-stock Make-to-order Assemble-to-order Manufacturers that make-to-stock keep a stock of finished goods. When a customer order arrives it is filled from this stock. Production orders are used to maintain appropriate levels of finished goods stock. Make -to-order manufacturing is the opposite extreme. Manufacture of the product does not begin until a customer order is received.

In some cases, not only must the product be manufactured after the order arrives, it also requires design engineering, and is referred to as engineer-to-order. Impact of Product Design on Lead Time When customer orders are filled from finished goods inventory make-to-stock , delivery lead time is short see the bar chart above. The greater the customer input into the final configuration, the longer the delivery lead time. Unit 1 Organizational Structure As the way each company functions is unique to itself, organizational structures differ from company to company.

However, there are common elements to be found. The following organization chart is an example of a typical manufacturing organization. Chief Executive Officer. Industrial Production Product Design Engineering. Manufacturing This section of the company makes the product. It usually comprises the following functions: A process or manufacturing engineering function is responsible for designing the manufacturing process, that is, the way in which the product is made. This function is responsible for process design, plant layout, and selecting equipment among other activities.

A materials management function manages the flow of materials through the manufacturing process and out to the customer. The production or manufacturing function is responsible for actually making the product The industrial engineering function is required to maintain the machinery, equipment, buildings and grounds of the manufacturing plant.

Quality This function is responsible for ensuring that the product meets the required specifications. Finance Mainly concerned with profitability and cash flow, this section ensures the economic health of the organization is maintained.

Engineering Product engineers are responsible for transforming ideas for new products into reality.

They undertake the product research, design and development and produce final specifications which can be used to manufacture the new product for the market. Unit 1 Information Technology Few companies today do not require some form of information technology or systems.

This section is usually responsible for computer systems, software, hardware, and communications systems.

Basics of Supply Chain Managment (Lesson 1)

Human Resources This section of an organization is responsible for hiring staff, agreeing contracts, managing holidays, pensions and other staff benefits. They maintain records on staff performance and are responsible for ensuring adequate staff training.

Sales and Marketing This section of the company is ge nerally the customer- facing section. The marketing function is responsible for devising the way in which the company responds to market demand.

The y are also responsible for estimating the types of products customers will want and the amount of product the company will be able to sell. All these sections within the company have discrete areas of activity. Traditionally, communication between the sections was minimal and took place only at managerial level.

In recent times, a strong trend towards cross- functional teams has emerged. Select the correct statement about delivery time for an engineer-to-order company. Delivery time is shorter than for an assemble-to-order company B. Delivery time is shorter than a make-to-order company Review Q C.

Delivery time would be longer than an assemble-to-order company D. Delivery time is the same as for a make-to-stock item. Difficulties with Traditional Systems The supply chain covers all activities needed to supply a product or service to the final customer. Any number of companies can be linked together in a supply chain.

When you download a shirt, for example, the supply chain starts right from the cotton plantation, through cloth weavers, clothing manufacturers, distributors and finally retail stores. The figure below shows a basic supply chain. Raw materials must be physically transported from suppliers to manufacturers to make the product. Finished goods are then sent to distributors who then ensure their delivery to the customers. The distribution system may be direct to the customer or may use wholesalers, warehouses or retail outlets to reach the end customer.

Unit 1 Supplier Manufacturer Distributor Customer.

Basics of Supply Chain Managment (Lesson 1)

Two-way communication is required throughout the chain to ensure accurate information of demand and design and optimum flow of products and services.

A difficulty at any point in the chain may adversely affect the rest of the chain. Physical Distribution Physical distribution is the movement of goods from suppliers to the beginning of the production process and then from the end of the production process to consumers.

Physical distribution involves transportation, inventory management, warehousing of inventory, packaging, materials handling and order management.

Costs of Inventory Holding a lot of inventory increases costs. The inventory costs money to download, to store and to manage.

Therefore excess inventory adversely affects cash flow and decreases profit. Costs of Distribution The main of distribution are transportation, inventory and warehousing.

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Transportation costs can be reduced by ensuring that only full loads are shipped, but this can increase distribution inventory. Conflicts in Organizational Objectives Most organizations aim to provide the best customer service they can while minimizing costs such as production, inventory and distribution.

By providing the best customer service, they hope to increase their revenue by increasing sales. This means ensuring that the customer can have what they want when they want it.

However, this may lead to high inventory levels and a lot of short production runs which will increase costs. The overall profits will be reduced if costs are high so it is important to minimize all costs. If you reduce your cost of production by a dollar, you add a dollar to your profit. Unit 1 Manufacturing may reduce costs by planning long production runs and often through bulk downloading raw material inventory. Each function in the company has different perspectives and objectives see Figure 3 above.

For example, Marketing and Sales are concerned sole with increasing revenue. They want to ensure high customer service which usually involves interrupting production schedules to respond quickly to customer demands and maintaining high levels of finished goods inventory.

These factors increase costs. Production may be concerned with reducing manufacturing costs. They may try to ensure long production runs, few products and few setups, which will require high raw material and finished goods inventories to ensure that the production schedule is not interrupted. Finance is mainly concerned with increasing the profit margin.

They are equally interested in reducing costs and increasing revenue. Therefore, they will support high customer service, so long as production efficiency remains high and inventory levels remain low. Managing Materials Materials management co-ordinates demand with available resources.

It must balance the conflicting objectives of the marketing, production and finance functions by managing the flow of materials at an optimum level to ensure: The desired level of customer service The best use of company resources Materials management is concerned with two main areas: Remember, customer service means providing the right quality and quantity of product at the right time, in the right place and at the right price.

Materials management makes sure these elements are provided and therefore adds value. Unit 1 3. These activities form part of the physical distribution system, except: Materials Handling B.

Manufacturing Processes Manufacturing Planning and Control Planning and controlling the flow of material through the manufacturing operation is a key function of manufacturing. Throughout this course, the elements of manufacturing planning and control will be covered.

These include: Production planning forecasting, master planning, material requirements planning and capacity planning Implementation and control Inventory management.

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Plant Layout and Process Flow Manufacturing processes usually involve either product layout, process layout or project layout. Sometimes these processes can be combined. ABC Beverages have continuous production of orange juice and grapefruit juice.

They also have intermittent production of breakfast juice. Money is a means of exchanging or measuring wealth. Wealth itself comes from: Manufacturing Services For example, a piece of land is a natural resource and has a va lue for most people.

If you mine precious metal from the land you have increased the wealth you can gain from the land. Both of these are natural resources. Many natural resources are of limited use but can be made more useful through transforming of the raw materials into a more useful form.

One example might be the transformation of stone and quarry dust into bricks. Services are not reliant on transforming a raw material into a more useful product. Instead, they rely on providing knowledge and skill.

Services also generate wealth. For example, the services of an architect may be required in the transformation of the bricks into a useful building. How do we increase our wealth? We can do this by adding value to a product or service.

The more value we add, the more our wealth increases. The value of a pile of bricks can be increased by adding a wire rack or two along with instructions on how to build a barbecue.Outlines the sales plan for the coming year Review Q C.

Learning Objectives cont. Is there a chance to repeat the course and re-take the exam? Delivery lead time is the time from the receipt of the order to the delivery of the product.

It can be called the patchwork of the Supply Chain fundamentals. Hudson George Thomas. The major external factors that affect companies are: In some cases, not only must the product be manufactured after the order arrives, it also requires design engineering, and is referred to as engineer-to-order.

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