Supply Chain Management PDF

# Chapter 13 Operations Management, Productivity, and Quality ## Kinaxis RapidResponse System - Ottawa-based Kinaxis has developed a system that helps companies solve their supply-chain problems. - The company's RapidResponse system runs on cloud-based software that allows users to: - Look at...

# Chapter 13 Operations Management, Productivity, and Quality ## Kinaxis RapidResponse System - Ottawa-based Kinaxis has developed a system that helps companies solve their supply-chain problems. - The company's RapidResponse system runs on cloud-based software that allows users to: - Look at their suppliers' data and identify bottlenecks in the supply chain - Answer important questions such as "Can our supply chain handle a new order?" and "How will a new order affect our other commitments?" - RapidResponse provides answers to questions like these in minutes. - The system can cut lead times by 50% and reduce rush orders by 83%. ## Supply-Chain Management for Services - The Port of Vancouver developed a supply-chain strategy that reduced container "dwell time" from 3.7 days to 2.5 days. - This reduction was achieved by making the port more competitive with American ports. - The strategy also improved the port's relationships with operators such as Canadian National Railway and Canadian Pacific Railway Ltd. ## Global Supply Chains - Supply chains are becoming increasingly global. - For example, an architect from Malaysia might sketch out a new office tower for the city of London, an architect from the Philippines might do the detailed renderings, and an engineer from China might assess the structural soundness of the building. ## Supply-Chain Disruptions - Supply chains can be disrupted by natural disasters and shortages of parts, including a pandemic. - A failure by any link can create problems for the entire chain. - For example, many of the food and cleaning product shortages experienced during the COVID-19 pandemic were due to breakdowns in supply chains. - An example of a disruption in supply: - A company routinely orders various chemicals that are then combined to manufacture hand sanitizer. - The finished product is poured into containers, and labels are applied to the containers. - The bottles are then packed into cardboard boxes. - A shipping company picks up boxes of the product from the manufacturer and transports them to a distribution center. - The boxes are stored then picked up again to be delivered to a retailer that has placed an order. - The company providing the cardboard boxes was located in an area that was greatly affected by COVID-19 and closed its doors for several weeks. - As a result, there was plenty of hand sanitizer, shipping companies willing to transport it, and retailers wanting to sell it. - However, because no boxes were available near the beginning of the supply chain, customers at the end of the supply chain would not be able to purchase it. ## Outsourcing and Global Supply Chains - Outsourcing is the strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials or services. - The decision to outsource expands supply chains. - During the COVID-19 pandemic: - Many companies around the globe use parts and components manufactured in China. - China was the first country to be hit by the virus. - The Chinese government ordered most businesses, including factories, to shut down for several weeks. - This shutdown led to shortages of parts that companies in other countries had come to depend on. - The movement of manufacturing and service operations from Canada and the United States to countries such as China, Mexico, and India has: - Reduced domestic employment in traditional jobs. - Created new operations jobs for SCM. - For example, Maytag had to develop its own internal global operations expertise before it could decide to open a new refrigerator factory in Mexico, import refrigerators from South Korea's Daewoo, and get laundry appliances from South Korea's Samsung. ## Returning Manufacturing to Domestic Markets - The COVID-19 pandemic led many companies and indeed governments around the world to consider the possibility of returning manufacturing to the domestic market, especially for certain essential goods like pharmaceuticals and personal protective equipment (PPE). - Maytag adopted new supply-chain skills for evaluating prospective outsourcing partners. - Companies adopting a long-standing practice of domestic production are considering the benefits of returning manufacturing to the domestic market.