MATERIALS MANAGEMENT

MATERIALS MANAGEMENTA Supply Chain Perspective

(Text and Cases)

Third Edition

A.K. CHITALEAcademic Advisor

Govindram Seksaria Institute of Management and ResearchIndore

R.C. GUPTAProfessor and Head

Department of Industrial and Production EngineeringShri Govindram Seksaria Institute of Technology and Science

Indore

Delhi-1100922014

MATERIALS MANAGEMENT: A Supply Chain Perspective (Text and Cases), Third EditionA.K. Chitale and R.C. Gupta

© 2014 by PHI Learning Private Limited, Delhi. All rights reserved. No part of this book may be reproduced in any form, by mimeograph or any other means, without permission in writing from the publisher.

ISBN-978-81-203-4841-7

The export rights of this book are vested solely with the publisher.

Sixth Printing (Third Edition) … … … August, 2014

Published by Asoke K. Ghosh, PHI Learning Private Limited, Rimjhim House, 111, Patparganj Industrial Estate, Delhi-110092 and Printed by Mohan Makhijani at Rekha Printers Private Limited, New Delhi-110020.

CONTENTS

Preface .................................................................................................................................. xvii

Preface to the Second Edition ............................................................................................... xix

Preface to the First Edition .................................................................................................. xxi

Chapter 1: MATERIALS MANAGEMENT ............................................................... 1–13

1.1 Introduction ............................................................................................................. 1 1.2 Management in Relation to Materials Function ..................................................... 1 1.3 Functions of Management as Applied to Materials ............................................... 2 1.4 Management of Material Resources ....................................................................... 4 1.5 Objectives of Material Management ....................................................................... 5 1.5.1 Primary Objectives ................................................................................... 6 1.5.2 Secondary Objectives ............................................................................... 8 1.6 Achieving Objectives ............................................................................................ 10 1.7 Effects of Business Changes ................................................................................. 11 1.8 Balancing of Objectives ........................................................................................ 12 1.9 Limitations to Meeting Objectives ....................................................................... 12 Review Questions ............................................................................................................. 13

Chapter 2: INTEGRATED MATERIALS MANAGEMENT .................................. 14–27

2.1 Introduction ........................................................................................................... 14 2.2 Activities of Materials Management ................................................................... 15 2.3 Importance of Materials Department .................................................................... 17 2.4 Costs Involved in the Management of Materials ................................................. 19 2.5 Need for Integrated Concept ................................................................................. 20 2.6 Areas of Materials Management ........................................................................... 20 2.7 Materials Management and Production Control ................................................... 21

v

vi Contents

2.8 Inspection of Purchased Items .............................................................................. 21 2.9 Relative Status of the Materials Manager ............................................................ 22 2.10 Desirable Qualities of Purchasing and Materials Manager.................................. 22 2.11 Interdepartmental Relationship .............................................................................. 23 2.12 Advantages of Integrated Materials Management ................................................ 24 2.13 Summary ................................................................................................................ 26 Review Questions ............................................................................................................. 27

Chapter 3: CLASSIFICATION AND CODIFICATION OF MATERIALS ......... 28–48

3.1 Need for Classification and Identification of Materials ...................................... 28 3.2 Classification of Materials—General Classification ............................................. 28 3.3 Classification According to Condition of Materials ........................................... 30 3.4 Nature of Codification .......................................................................................... 30 3.5 Process of Codification ......................................................................................... 31 3.6 Merits of Codification ........................................................................................... 31 3.7 Demerits of Codification ....................................................................................... 34 3.8 Codification Systems ............................................................................................. 35 3.8.1 Alphabetical System ............................................................................... 35 3.8.2 Numerical System .................................................................................. 36 3.8.3 Decimal System ...................................................................................... 37 3.8.4 Combined Alphabetical and Numerical System .................................. 39 3.8.5 Brisch System ....................................................................................... 40 3.8.6 Kodak System ........................................................................................ 41 3.9 Stores Vocabulary ................................................................................................. 44 3.10 Marking of Stores ................................................................................................. 44 3.10.1 Colour Marking ...................................................................................... 45 3.10.2 Secret Marking ....................................................................................... 46 3.11 Summary .............................................................................................................. 46 Review Questions ............................................................................................................. 48

Chapter 4: SPECIFICATIONS IN MATERIALS MANAGEMENT ..................... 49–58

4.1 Objective of Specifications ................................................................................... 49 4.2 Collaborative Development ................................................................................... 50 4.3 Categories of Specifications .................................................................................. 50 4.3.1 Simple Specifications ............................................................................. 50 4.3.2 Complex Specifications .......................................................................... 53 4.4 Development of Specifications ............................................................................. 54 4.41 Organizational Approaches .................................................................... 55 4.5 Purchase Management Research ........................................................................... 56 4.6 Writing Specifications ........................................................................................... 56 4.7 Common Problems in Specifications .................................................................. 57 4.8 Summary ................................................................................................................ 57 Review Questions ............................................................................................................. 58

Contents  vii

Chapter 5: STANDARDIZATION AND VARIETY REDUCTION ....................... 59–75

5.1 Definition of Standard ........................................................................................... 59 5.2 Historical Review .................................................................................................. 59 5.3 Three Dimensions of Standards ............................................................................ 59 5.4 Different Levels of Standards ............................................................................. 60 5.5 Various Foreign Standards in Use in India ........................................................ 61 5.6 Procedure for Evolving Indian Standard .............................................................. 62 5.7 Benefits of Standardization ................................................................................... 63 5.8 Standardization and Variety Reduction in Products ............................................ 63 5.8.1 Advantages of Variety Reduction .......................................................... 63 5.9 Scope of Variety Reduction and Standardization ................................................ 67 5.10 Techniques of Variety Reduction ......................................................................... 67 5.10.1 Sales Contribution Analysis ................................................................... 67 5.10.2 Consumption Analysis............................................................................ 67 5.10.3 Renard Series (Preferred Numbers) ....................................................... 69 5.11 The Three S’s—Standardization, Simplification and Specialization ................... 71 5.11.1 Standardization ....................................................................................... 72 5.11.2 Simplification ......................................................................................... 73 Review Questions ............................................................................................................. 75

Chapter 6: MATERIALS PLANNING ...................................................................... 76–87

6.1 Importance of Materials Planning ........................................................................ 76 6.2 Definition of Materials Planning .......................................................................... 77 6.3 Flowchart for Materials Planning ......................................................................... 80 6.4 Techniques of Materials Planning ....................................................................... 80 6.4.1 Past Consumption Analysis ................................................................... 81 6.4.2 Material Requirements Planning ............................................................ 82 6.5 Summary ................................................................................................................ 87 Review Questions ............................................................................................................. 87

Chapter 7: BUDGETING AND MATERIAL PLANNING ..................................... 88–95

7.1 Introduction ........................................................................................................... 88 7.2 Master Budget ....................................................................................................... 89 7.2.1 Sales Budget ........................................................................................... 90 7.2.2 Production Budget .................................................................................. 90 7.2.3 Materials Budget .................................................................................... 90 7.2.4 Labour Budget ........................................................................................ 91 7.2.5 Maintenance Budget ............................................................................... 91 7.2.6 Overheads Budget .................................................................................. 92 7.2.7 Administrative Budget............................................................................ 92 7.2.8 Capital Expenditure Budget ................................................................... 92

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7.2.9 Research and Development Budget ....................................................... 92 7.2.10 Cash Budget ........................................................................................... 93 7.3 Flexible Budgeting ................................................................................................ 93 7.4 Summary ................................................................................................................ 94 Review Questions ............................................................................................................. 95

Chapter 8: STORES AND STORE KEEPING ...................................................... 96–110

8.1 Objectives of Store Keeping ................................................................................. 96 8.2 Functions of Storekeeper ...................................................................................... 97 8.3 Features of Successful Store Keeping ................................................................ 99 8.4 Relationship of Store Department with Other Departments .............................. 100 8.5 Benefits of Store Keeping ................................................................................. 101 8.6 Stores Organization ............................................................................................ 103 8.7 Location of Stores ............................................................................................. 104 8.8 Layout of Stores .................................................................................................. 105 8.9 Receipt Section .................................................................................................... 106 8.10 Types of Stores ................................................................................................... 106 8.11 Preservation of Stores ......................................................................................... 107 8.12 Stock Taking ....................................................................................................... 108 8.12.1 Methods of Physical Stock Verification .............................................. 108 8.13 Summary .............................................................................................................. 109 Review Questions ........................................................................................................... 109

Chapter 9: STORAGE EQUIPMENT ................................................................... 111–120

9.1 Types of Equipment ............................................................................................ 111 9.2 Selection of Equipment ....................................................................................... 115 Review Questions ........................................................................................................... 120

Chapter 10: PRINCIPLES OF MATERIALS HANDLING ............................... 121–132

10.1 Introduction ......................................................................................................... 121 10.1.1 Planning Principles ............................................................................... 121 10.1.2 Operating Principles ............................................................................. 123 10.1.3 Principles Related with Equipment ..................................................... 123 10.1.4 Principles of Cost Reduction ............................................................... 124 10.1.5 General Principles ................................................................................ 125 10.2 Classification of Material Handling Equipment ............................................... 125 10.3 Material Handling Equipment ............................................................................. 126 10.4 Summary ............................................................................................................ 132 Review Questions ........................................................................................................... 132

Chapter 11: INVENTORY CONTROL ................................................................. 133–181

11.1 Introduction ......................................................................................................... 133 11.2 Importance and Scope ......................................................................................... 134

Contents  ix

11.3 Cost Concepts ...................................................................................................... 135 11.4 Inventory Models ................................................................................................ 137 11.4.1 Economic Order Quantity (EOQ) Model ............................................ 137 11.4.2 Economic Production Order (EPQ) Model ......................................... 142 11.4.3 Inventory Model Allowing for Shortages............................................ 147 11.4.4 General Model ...................................................................................... 153 11.4.5 Multi-Item Deterministic Model .......................................................... 158 11.4.6 Inventory Model with Price Breaks .................................................... 167 11.4.7 Probabilistic Inventory Models ............................................................ 175 11.5 Summary .............................................................................................................. 177 Problems ......................................................................................................................... 178 Review Questions ........................................................................................................... 181

Chapter 12: INVENTORY MANAGEMENT MODELS ..................................... 182–194

12.1 Introduction ......................................................................................................... 182 12.2 Deterministic Models of Inventory Management ............................................... 183 12.2.1 The Q System (Deterministic Case) .................................................... 183 12.2.2 The P System (Deterministic Case) .................................................... 184 12.3 Probabilistic Models of Inventory Management ................................................ 186 12.3.1 Q System (Probabilistic Case) ............................................................. 186 12.3.2 P System (Probabilistic Case) .............................................................. 190 12.4 Using P and Q Systems in Practice ................................................................... 192 12.5 Independent Versus Dependent Demand ............................................................ 193 Review Questions ........................................................................................................... 194

Chapter 13: SELECTIVE INVENTORY CONTROL ......................................... 195–210

13.1 Introduction ......................................................................................................... 195 13.2 Selective Treatment ............................................................................................. 195 13.3 ABC Categorization ............................................................................................ 196 13.3.1 Conducting ABC Analysis ................................................................... 197 13.3.2 Benefits of ABC Classification ........................................................... 202 13.4 High-Medium and Low Price (HML) Analysis ................................................. 203 13.5 VED Analysis ...................................................................................................... 204 13.6 SDE Analysis ...................................................................................................... 206 13.7 GOLF Analysis.................................................................................................... 206 13.8 SOS Analysis....................................................................................................... 206 13.9 FSN Analysis....................................................................................................... 207 13.10 XYZ Analysis ...................................................................................................... 207 13.11 Three-dimensional Approach for Selective Control of Inventory .................... 207 13.12 Summary .............................................................................................................. 209 Review Questions ........................................................................................................... 210

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Chapter 14: THE PURCHASING CYCLE ........................................................... 211–219

14.1 Introduction ........................................................................................................ 211 14.2 Purchasing Process .............................................................................................. 211 14.3 Purchasing Terms and Conditions ...................................................................... 215 14.3.1 The Tender System .............................................................................. 216 14.4 Payment Terms .................................................................................................... 218 14.5 Summary .............................................................................................................. 218 Review Questions ........................................................................................................... 219

Chapter 15: PRINCIPLES OF PURCHASING ............................................. 220–233

15.1 Introduction ......................................................................................................... 220 15.2 Definition of Purchasing .................................................................................... 220 15.3 Objectives of Purchasing .................................................................................... 221 15.4 Duties and Responsibilities of Purchase Department ........................................ 222 15.5 Principles of Purchasing ..................................................................................... 224 15.6 Special Methods of Purchasing .......................................................................... 226 15.7 Centralized and Decentralized Purchasing ......................................................... 229 15.8 Organizing for Purchase...................................................................................... 230 Review Questions ........................................................................................................... 232

Chapter 16: THE NATURE OF PURCHASING PROCESS AND VENDOR RATING .................................................................. 234–248

16.1 Introduction ......................................................................................................... 234 16.2 Activities in Organizational Buying ................................................................... 234 16.3 The Buygrid Analytic Framework ...................................................................... 235 16.4 Phases in the Purchasing Decision Process ....................................................... 236 16.5 Buying Centres and Multiple Buying Influencers ............................................. 239 16.6 Primary Roles ...................................................................................................... 240 16.7 Secondary Roles .................................................................................................. 241 16.8 Supplier Rating .................................................................................................... 241 16.9 Evaluating Supplier Performance........................................................................ 242 16.10 Summary .............................................................................................................. 247 Review Questions ........................................................................................................... 247

Chapter 17: VALUE ANALYSIS ........................................................................... 249–284

17.1 Introduction ......................................................................................................... 249 17.2 What is Value? .................................................................................................... 250 17.3 Maximum Value .................................................................................................. 251 17.4 Normal Degree of Value ..................................................................................... 251 17.5 Importance of Value ........................................................................................... 251 17.6 Value Analysis Applied to Purchase .................................................................. 251 17.7 Organizing for Value Analysis ........................................................................... 252

Contents  xi

17.8 Value Analysis Techniques ................................................................................. 254 17.9 Selling Value Analysis ........................................................................................ 257 17.10 Cost Analysis and Value Analysis Aid Purchase Research .............................. 258 17.11 The Value Analysis Job Plan ............................................................................. 259 17.12 Case Study on Value Analysis Job Plan ............................................................ 261 17.13 Function Analysis System Technique (FAST) ................................................... 269 17.14 Material and Process Selection in Value Engineering ....................................... 273 17.14.1 Design, Material, Process and Supplier Decisions ............................ 273 17.15 Product Parameters .............................................................................................. 275 17.16 Process Selection ................................................................................................. 275 17.17 Material Selection .............................................................................................. 276 17.17.1 Material Selection Parameters.............................................................. 276 17.18 Creativity ............................................................................................................ 277 17.19 Creative Techniques ............................................................................................ 279 Review Questions ........................................................................................................... 283

Chapter 18: QUALITY CONTROL IN MATERIALS MANAGEMENT ......... 285–327

18.1 Introduction ......................................................................................................... 285 18.2 Evolution of Quality Concepts and Applications ............................................... 285 18.3 Quality and Design Spiral .................................................................................. 286 18.4 Theory of Sampling Inspection .......................................................................... 288 18.4.1 Single Sampling Plans ......................................................................... 288 18.4.2 The Operating Characteristic Curve ................................................... 288 18.4.3 The AQL (Acceptable Quality Level) and LTPD

(Lot Tolerance Proportion Defective) .................................................. 289 18.4.4 The AOQ Curve and the AOQL ......................................................... 290 18.4.5 Average Total Inspection (ATI) .......................................................... 292 18.4.6 Double Sampling Plan ......................................................................... 292 18.4.7 Multiple Sample Plans ......................................................................... 295 18.4.8 Sequential Sampling Plans ................................................................... 297 18.4.9 Practical Method of Selecting a Sampling Plan ................................. 299 18.4.10 Sampling Plan for Variables ................................................................ 301 18.5 Control Charts and In-Process Monitoring of Quality ...................................... 303 18.5.1 Introduction .......................................................................................... 303 18.5.2 Control Charts ...................................................................................... 304 18.5.3 Discussion on Variability in a Constant Cause System ..................... 306 18.5.4 Procedure in Quality Control ............................................................... 307 18.5.5 Theory of Control Charts ..................................................................... 307 18.5.6 Significance of X and R Charts ......................................................... 311 18.5.7 Control Chart for Defective: np Chart: Comparison with

X and R Charts ................................................................................... 311 18.5.8 Control Chart for Number of Defectives c Per Unit:

Areas of Application ............................................................................ 313 18.5.9 Control Chart for p (a special case of np chart when n varies) ........ 313

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18.6 Six Sigma Quality Concepts ............................................................................... 315 18.6.1 Statistical Background .......................................................................... 315 18.6.2 Six Sigma Relationships ...................................................................... 316 18.6.3 Procedure to Work Out Operating Sigma Level of a Process ........... 317 18.6.4 Rolled throughput Yield ...................................................................... 319 18.6.5 Advantage of Yield and Allied Calculations ...................................... 319 18.6.6 Normalized Yield and Z-Value for Benchmarking ............................. 319 18.6.7 Design for Six Sigma (DFSS) ............................................................. 320 18.6.8 Cost Benefits and Leveraging through Better Design ........................ 320 18.6.9 Relationship between CP and CPK Values ........................................... 321 18.6.10 Implementation of Six Sigma .............................................................. 322 18.6.11 The Twelve MAIC Objectives ............................................................. 323 18.6.12 Future Avenues .................................................................................... 323 Review Questions ........................................................................................................... 327

Chapter 19: MAKE OR BUY DECISIONS .......................................................... 328–338

19.1 Key Strategic Decisions .................................................................................... 328 19.2 Strategic Issues .................................................................................................. 328 19.3 New Product Development and Outsourcing ..................................................... 329 19.4 Lean Manufacturing ............................................................................................ 330 19.5 Decisions at Tactical Level................................................................................. 330 19.6 Factors of Make or Buy Decision ...................................................................... 332 19.7 Dangers of Outsourcing ...................................................................................... 336 19.8 Summary ............................................................................................................ 338 Review Questions ........................................................................................................... 338

Chapter 20: BUYER–SELLER RELATIONSHIP................................................ 339–345

20.1 Introduction ......................................................................................................... 339 20.2 Evolution in Buyer–Seller Relations .................................................................. 339 20.3 Advantages and Limitation of Various Types of Buyer–Seller Relations ........ 340 20.4 Choice of Type of Relationship ......................................................................... 343 20.5 Suppliers Point of View ...................................................................................... 344 Review Questions ........................................................................................................... 345

Chapter 21: NEGOTIATION .................................................................................. 346–352

21.1 Introduction ......................................................................................................... 346 21.2 Purchasing Negotiation for Consumer Products and Industrial Products ......... 346 21.3 Factors Which May Weaken Negotiation .......................................................... 347 21.4 Pre-Planning for Negotiations ............................................................................. 347 21.5 Planning of Negotiations ..................................................................................... 348 21.6 Tactics in Purchasing Negotiations .................................................................... 350

Contents  xiii

21.7 Stages in Purchasing Negotiation ....................................................................... 350 21.8 Code of Conduct ................................................................................................. 350 Review Questions ........................................................................................................... 352

Chapter 22: DISPOSAL OF SURPLUS, OBSOLETE AND SCRAP ................ 353–356

22.1 Introduction ......................................................................................................... 353 22.2 Reasons for Creation of Surplus ........................................................................ 353 22.3 Grouping of Items and Their Treatment ............................................................ 354 22.4 Obsolete Items ..................................................................................................... 354 22.5 Scrap .................................................................................................................... 355 22.6 Salvage................................................................................................................. 355 Review Questions ........................................................................................................... 356

Chapter 23: PERFORMANCE APPRAISAL OF MATERIALS DEPARTMENT .................................................................................. 357–368

23.1 Introduction ......................................................................................................... 357 23.2 Need for Performance Appraisal ........................................................................ 358 23.3 Features of Performance Appraisal..................................................................... 358 23.4 Performance Appraisal Evaluation and Ratios ................................................... 359 23.4.1 Performance Appraisal Receiving Stores ............................................ 359 23.4.2 Evaluation of Purchasing Department ................................................. 360 23.4.3 Evaluation of Inventory Control .......................................................... 361 23.4.4 Evaluation of Stores Department ......................................................... 362 23.5 Reporting of Evaluation Indices ......................................................................... 365 Review Questions ........................................................................................................... 368

Chapter 24: SOME LEGAL ASPECTS OF PURCHASING .............................. 369–376

24.1 Introduction ......................................................................................................... 369 Review Questions ........................................................................................................... 376

Chapter 25: PURCHASING OF CAPITAL EQUIPMENT ................................ 377–385

25.1 Introduction ..............................................................................................................377 25.2 Characteristic Differences between Capital Equipment and Consumable

Materials... ................................................................................................................377 25.3 Purchasing Procedure of Capital Equipment ............................................................378 25.4 Ten Commandments of Buying Capital Equipment .................................................379 25.5 Economic Analysis of Capital Equipment Investment .............................................380 25.5.1 Payback Period ..........................................................................................380 25.5.2 Average Rate of Return.............................................................................381 25.5.3 Net Present Value......................................................................................381 25.5.4 Internal Rate of Return ..............................................................................382

xiv Contents

25.6 Purchase of Old Equipment ......................................................................................383 25.6.1 Sources of Old Equipment ........................................................................383 25.6.2 Disadvantages of Buying Old Equipment .................................................384 25.7 Purchasing vs Leasing of Capital Equipment ...........................................................384 25.7.1 BenefitsofLeasing....................................................................................384 25.7.2 Disadvantages ...........................................................................................384 Review Questions ........................................................................................................... 385

Chapter 26: PUBLIC BUYING .............................................................................. 386–390

26.1 The Directorate General of Supplies and Disposals .................................................386 26.2 Domain of Working ..................................................................................................386 26.3 Organization Structure ..............................................................................................387 26.4 Registration of Suppliers with DGS&D ...................................................................388 26.5 Processing Indent ......................................................................................................389 26.6 Summary ...................................................................................................................389 Review Questions ........................................................................................................... 390

Chapter 27: INTERNATIONAL PURCHASING ................................................. 391–400

27.1 Introduction ..............................................................................................................391 27.2 Government and Other Enablers of Imports and Exports ........................................391 27.2.1 Director General of Foreign Trade (DGFT) .............................................391 27.3 Categories of Importers ............................................................................................392 27.4 Import Application ...................................................................................................392 27.5 Criteria for Licensing ................................................................................................393 27.6 Negative List of Imports ...........................................................................................393 27.7 Import Procedure ......................................................................................................393 27.8 Documents Used in International Trade ...................................................................395 27.9 Clearing and Forwarding ..........................................................................................399 27.10 Role of Government-owned Trading Organizations ................................................399 27.11 BenefitsofIndiaBecomingMemberofWorldTradingOrganization(WTO) ........400 Review Questions ........................................................................................................... 400

Chapter 28: IMPORT SUBSTITUTION ............................................................... 401–404

28.1 Introduction ..............................................................................................................401 28.2 Analysis of India’s Foreign Trade ............................................................................402 28.3 Problems of Import Substitution ...............................................................................402 28.4 Role of Management to Prepare for Import Substitution .........................................403 28.5 Summary ...................................................................................................................403 Review Questions ........................................................................................................... 404

Contents  xv

Chapter 29: LOGISTICS, WAREHOUSING AND DISTRIBUTION MANAGEMENT ................................................................................. 405–414

29.1 Introduction ..............................................................................................................405 29.2 Components of a Logistics System ..........................................................................406 29.3 Role of Warehouses ..................................................................................................406 29.3.1 Consolidation ............................................................................................407 29.3.2 Product Mixing .........................................................................................407 29.4 Cost Analysis in Logistics ........................................................................................408 29.5 Warehousing Management .......................................................................................410 29.6 Activities of Warehousing ........................................................................................410 29.7 Utilize Space, Including Height Effectively .............................................................410 29.8 Layout of Warehouse ................................................................................................411 29.9 Inventory Record Accuracy ......................................................................................411 29.10 Distribution Requirements Planning ........................................................................412 29.11 Summary ...................................................................................................................413 Review Questions ........................................................................................................... 414

Chapter 30: SUPPLY CHAIN MANAGEMENT ................................................. 415–443

30.1 Need for Supply Chain Management ................................................................. 415 30.1.1 Customer Focus in Today’s Scenario .................................................. 416 30.2 Conceptual Model of Supply Chain Management ............................................ 416 30.2.1 Definition of Supply Chain.................................................................. 417 30.3 SCM in the Modern Form as an Integration of Logistics and Manufacturing ....419 30.4 Developing Integrated Supply Chains ............................................................... 419 30.4.1 Conflicting Objectives ........................................................................ 419 30.4.2 Integration Resulting in the Development of a Supply Chain ........... 420 30.5 Supply Chain Strategy ....................................................................................... 422 30.5.1 Collaboration ........................................................................................ 422 30.5.2 Demand Management ......................................................................... 423 30.5.3 Customer Service ................................................................................ 423 30.5.4 Technology Integration Strategy .......................................................... 424 30.6 Three Steps of Supply Chain Implementation .................................................. 424 30.6.1 Purchasing Involving In-Bound-Logistics ........................................... 424 30.6.2 Manufacturing Planning and Implementation within the Factory ...... 425 30.6.3 Distribution Involving Outbound Logistics ......................................... 426 30.7 Transportation ...................................................................................................... 427 30.7.1 Scheduling, Routing and Carrier Selection ......................................... 428 30.8 Design of Efficient and Responsive Supply Chains .......................................... 430 30.8.1 Designing Efficient Supply Chains ..................................................... 430 30.8.2 Designing Responsive Supply Chains ................................................ 430 30.8.3 Efficient Versus Responsive Supply Chains ....................................... 431 30.9 Bullwhip Effect in Supply Chains ...................................................................... 432 30.9.1 Causes of Bullwhip Effect ................................................................... 432

Materials Management A Supply ChainPerspective : Text And Cases

Publisher : PHI Learning ISBN : 9788120348417Author : Gupta RC AndChitale

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