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C2X - SCM Weekly - Issue 4 PDF

The document discusses several key terms related to supply chain management: - Backorder refers to customer orders that cannot be filled due to lack of inventory. - Vendor managed inventory involves vendors managing inventory levels at customer facilities. - Kaizen refers to making small, continuous improvements to achieve better results. - DMAIC is a five-step approach used in Six Sigma to define problems, measure performance, analyze root causes, improve processes, and control gains.

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115 views2 pages

C2X - SCM Weekly - Issue 4 PDF

The document discusses several key terms related to supply chain management: - Backorder refers to customer orders that cannot be filled due to lack of inventory. - Vendor managed inventory involves vendors managing inventory levels at customer facilities. - Kaizen refers to making small, continuous improvements to achieve better results. - DMAIC is a five-step approach used in Six Sigma to define problems, measure performance, analyze root causes, improve processes, and control gains.

Uploaded by

deveshjh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Supply Chain Management

The Supply Chain


Forum of NITIE

Weekly
14nd-20th Jul 2011

Basic Terms of Supply Chain


Management

Advanced Terms of Supply Chain


Management

Backorder: Backorder is a current or past


due customer order (or line item) that
cannot

be

shipped

due

to

lack

of

inventory availability.
Total
TPM

Productive
is

an

which

the

vendor

(supplier)

manages

the

inventory of its products in its distribution


centre is called as VMI. The vendor receives

Maintenance

approach

Vendor Managed Inventory: The process by

with

(TPM):

the

core

objective of organizing a workplace to


prevent all losses and achieve zero defects,
zero breakdowns, and zero accidents and
zero pollution in the entire production
system life cycle.
Detention: When a truck/equipment is
used beyond the stipulated free time as
per inland rules and conditions, it is

stock information from the customer and then


calculates what should be shipped to maintain
adequate

inventory

levels

at

the

retailer's

facility. It is the preferred method by which


customers

dump

their

inventory

woes

on

vendors.

Kaizen : KAI = Change, ZEN = Good. Kaizen


means Change for better. Kaizen means
small, simple and incremental improvements
on a continuous basis. Kaizen differs from
innovation in the aspect that, Innovation is

called detention. It can occur at any

mostly shorter, intermittent in nature. Kaizen

interface in logistics (i.e) a manufacturing

on the other hand stresses on Continuous

location or a port.

improvement.

Open-to-Buy
(OTB): and A
retail
category
DMAIC: DMAIC is a five-step approach for driving costly variation
from manufacturing
business
processes:
Define

Measure, Analyse, Improve, and Control. As the backbonemanagement


of the Six Sigma methodology,
delivers
sustained
technique DMAIC
which
identifies
defect-free performance and highly competitive quality costs merchandise
over the long run.budgeted for purchase during a
Simply stated, the leadership team in a given business Defines which metrics are most important, Measures historical
certain time period that has not yet been
performance, Analyses top opportunity areas for improving each metric, Improves underlying processes with targeted
ordered.
It project
is also
the process of planning
DMAIC projects, and supports the long term Controls identified
by Six Sigma
teams
merchandise sales and purchases. OTB budgets
Improvement teams use the DMAIC methodology to root
out and eliminate the causes of defects:
D: Define a problem or improvement opportunity.
M: Measure process performance.
A:Analyse the process to determine the root causes of poor
performance; determine whether the process can be
improved or should be redesigned.
I: Improve the process by attacking root causes.
C: Control the improved process to hold the gains

are typically set by commodity group rather


than supplier.
OTB Calculation:
[(Planned Sales) + (Planned Markdowns) +
(Planned Inventory)] - [(Actual Inventory) +
(On Order) + (Actual Sales)]

Rare earths Cause of next world war or end of high-tech civilisation?


China, which supplies about 97 per cent of the worlds requirement of rare earths, started to impose a production cut
on itself and a reduction in export quota by 72 per cent from around October 2010.
Since then due to market shortages, their prices started to surge in the world markets. Though China says that its
objective is to conserve this valuable raw material, critics charge that China is using the production restrictions as a
political weapon against Japan, US and the European Union.
The last announcement made in March 2011 which coincided with a fishing boat dispute with Japan probably would
have contributed to the critics charge. Strangely, though the two issues would have been independent of each other,
within days of the announcement of a production cut, Japan released the captured fishing boat together with its crew,
confirming the charge.
Last week, after a fresh announcement by Chinese authorities of a further production cut and a further reduction of
the export quota by 35 per cent, the prices of all rare earths more than doubled, and in some cases, nearly tripled in the
world markets.
Link:http://www.ft.lk/2011/06/27/rare-earths-%E2%80%93-cause-of-next-world-war-or-end-of-high-techcivilisation/
http://www.reuters.com/article/2011/03/22/us-china-rareearth-idUSTRE72L10I20110322
Sony Ericsson Faces Shortages of Flagship Phones

News
Corner

Sony Ericsson faces shortages of three new flagship cell phones after Japan's
earthquake and tsunami disrupted supplies of key components, it said Tuesday.
"The smartphone industry relies on northern Japan as one of the largest producers of
components and sub-components," said Bert Nordberg, president of Sony Ericsson.
Nordberg was speaking in a conference call held to announce the cell phone maker's
results for the first three months of the year.
The double natural disasters of March 11 and a subsequent nuclear-plant crisis caused
massive disruption to businesses across most of east Japan. Some companies
sustained direct damage to their factories while others have been unable to supply
components due to problems with distribution, availability of raw materials or
electricity shortages. Businesses in the region are bouncing back, but some with
heavier damage to facilities are still unable to resume production.
Link:http://www.pcworld.com/businesscenter/article/225565/sony_ericsson
_faces_shortages_of_flagship_phones.html

UNCTAD pushes supply chain integration


DEVELOPING countries must participate in global supply chains to attract foreign direct investment and pursue
economic development, a United Nations agency affirmed last week in a trade and development report.
Integration into the supply chain, however, requires proper trade and business facilitation services, the UN Conference on Trade
and Development (UNCTAD) concluded, emphasizing the need for developing economies to focus on improving
infrastructure, customs procedures, and enforcing the rule of law.
Similarly, the Philippine Exporters Confederation, Inc. (Phil-Export) stressed the simplification of business licensing and
registration and a shift in the attitude of Customs officials as important factors to capturing investments needed to increase
value adding in exported goods and services. "Participation in GSC (global supply chains) is viewed by many developing
countries as an important tool for diversifying and increasing exports and for their value addition, as well as for attracting
foreign direct investment," the agency said.
Link:http://www.bworldonline.com/content.php?section=Economy&title=UNCTAD-pushes-supply-chainintegration&id=33663

*In an endeavour to provide you the best information, Team c2x aggregates data from various resources and makes it available to you at one place. We strongly
recommend you to research on these topics on your own to enhance your learning. In case you have any suggestions kindly mail us at: nitie.c2x@gmail.com

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