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  • The Role of Purchasing in the New Product Development Process - Part I - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    voice of the customer Business technical assessment preliminary Product process service concept development Product process service engineering and design Prototype build test and pilot ramp up for operations Concept and design lock in as much as 80 percent of the total cost of a project 2 For this reason it is crucial for firms to bring in as much product process and technical expertise as possible early in the NPD process The supplier often possesses much of this critical expertise Purchasing specialists are frequently tasked with facilitating the transfer of supplier expertise 3 So how can organizations get purchasing more involved Researchers have identified two factors that appear to aid the involvement of purchasing in the NPD process personnel and organization The Personnel Factor The competencies and skills of purchasers are important determinants of successful NPD process contribution Organizations should have personnel with the right education skills and experience Researchers found that important competencies and skills include 4 Type of previous experience Type and level of training education Degree of technical expertise Degree of proactiveness Capabilities as perceived by others credibility It is worthwhile to note that the above list bears a resemblance to an inventory of the most desired personnel attributes documented during a round table meeting at NC State on July 16 2002 The meeting was funded by the Center for Advanced Purchasing Studies CAPS and its objective was to identify the training and education requirements of supply chain managers of the future Supply chain managers from multiple industries acknowledged the following attributes as being very important The ability to cope with the increasingly strategic role of the supply chain function Skills in project management Finance and cost accounting An understanding of cross cultural issues in business The ability to work in teams Written and verbal communication presentation and problem solving skills The Organization Factor Wynstra et al suggest that it is important for organizations to harbor an internal group that is able to support the communication and coordination required in NPD The authors noted two particularly important aspects of organization horizontal complexity and specialization within a department 4 Horizontal complexity refers to the number of different units or groups with specific tasks within a department For example because operational purchasers are usually occupied with daily purchasing tasks they find it difficult to devote time to developmental purchasing activities Hence researchers suggest that utilizing a purchasing department consisting of both an operational unit and a developmental unit may increase the overall ability of the department to perform initial or product development related tasks 4 The departmental specialization aspect of organization refers to the degree and principle of specialization within the department 4 Researchers note that when purchasers are narrowly specialized in a specific range of products or technologies similar to the way development engineers are specialized they may be better able to become involved in product development projects The departmental specialization aspect of organization and the aforementioned personnel factor then appear to be linked to one another Company

    Original URL path: https://scm.ncsu.edu/scm-articles/article/the-role-of-purchasing-in-the-new-product-development-process-part-i (2016-04-30)
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  • Purchasing Manager Survey Says… - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    10 percent It is viewed widely as a major leading indicator of both manufacturing and overall economic growth PMI Interpretation The index is seen as an early indicator of what is happening in the general economy In fact a regression analysis by the U S Department of Commerce that associates GDP growth rates with various PMI levels allows the ISM to claim 1 that a PMI over 42 7 percent over a period of time indicates that the overall economy or Gross Domestic Product GDP is generally expanding below 42 7 percent that it is generally declining Additionally a PMI reading above 50 percent indicates that the manufacturing economy is generally expanding below 50 percent that it is generally declining Besides simply showing the direction of change the figure also shows the magnitude of expansion or decline PMI Popularity The PMI is highly regarded because the ISM report is released relatively quickly and the index is generally considered to be accurate and easy to interpret As a Purchasing author wrote it is widely believed that purchasing managers by virtue of their jobs have very early access to hard data about their company s performance for a particular month For this reason the ISM is able to release its manufacturing data on the first day of every month for the month immediately prior In fact the report is released at least two weeks before comparable government economic statistics 1 PMI Seasonality Adjustment The ISM Manufacturing Report on Business makes use of seasonal adjustment factors While seasonal factors are especially influential during the transition from late summer to fall in most months the influence is not very large The ISM periodically reviews its methodology including the use of seasonal adjustment factors These are updated by the U S Department of Commerce on a yearly basis For example for its January 2003 and subsequent reports ISM switched to a new methodology Regarding the recent switch ISM stated all series were reviewed to determine if additional series could be adjusted and if formerly adjusted series should continue to be adjusted The analysis resulted in adding seasonal adjustments to some series and dropping it from others PMI Predictions The author of an article published in the Journal of Purchasing Materials Management examined several ways to estimate future PMI values According to the author the best results come from simply using the current period s New Orders data to estimate the next month s PMI New Orders is a consistently reliable indicator one or two periods in advance of an actual change in the direction of the economy 2 In addition other PMI s may shed light on the national PMI Regional reports such as Philadelphia Chicago Milwaukee Detroit and New York all precede the release of the national survey A Lycos reported on the usefulness of these indices based on their ability to aid in forecasting the national index In this report the Chicago and Philadelphia PMI s were found to have the best correlation

    Original URL path: https://scm.ncsu.edu/scm-articles/article/purchasing-manager-survey-says (2016-04-30)
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  • How Do You Do Supply Chain Management (SCM)? - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    Library SCM Insights Polls SCM Topics SCM Research SCRC Article Library How Do You Do Supply Chain Management SCM How Do You Do Supply Chain Management SCM Published on Jan 11 2011 by Robert Handfield Ph D Executive Director of SCRC Bank of America University Distinguished Professor of Supply Chain Management A firm s SCM efforts start with the development and execution of a long term supply chain strategy Among other things this strategy should Identify what supply chains the firm wants to compete in Help managers understand how the firm will provide value to the supply chain Guide the selection of supply chain partners including suppliers subcontractors transportation providers and distributors As firms struggle to understand what supply chains they compete in it is often valuable to map the physical flows and information flows that make up these supply chains From these maps firms can begin to understand how they add value and what information is needed to make the supply chain work in the most effective and efficient way possible Of course the firm s supply chain strategy does not exist in a vacuum It must be consistent with both the overall business strategy and efforts within such areas as purchasing logistics manufacturing and marketing Categories SCM Resources SCM Basics Read the Supply Chain Management Professional Newsletter Read the latest supply chain research articles and news as soon as we post them Privacy Policy Related Articles What is Supply Chain Management What Do You Need to Know about Supply Chain Management SCM Why Do You Need To Know About Supply Chain Management SCM Professional Resources SCM Articles SCM Resources SCM Terms Supply Chain Management Basics SCM Basics Tariffs and Tax Primer NAICS Navigator SCM Blog Business Process Outsourcing Forecasting Healthcare Supply Management Supply Chain Analytics SCM Tutorials CPFR

    Original URL path: https://scm.ncsu.edu/scm-articles/article/how-do-you-do-scm (2016-04-30)
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  • How Mature Is Your Supply Chain? - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    described by Jeff Trimmer former Vice President of Purchasing at at Daimler Chrysler in terms of three principles The only entity that puts money into a supply chain is the end customer The only solution that is stable over the long term insures that every element of the supply chain from raw material to end customer profits Supply chain management is about the economic value and total content of a product service Now it s up to corporate management to develop a comprehensive plan for redesigning their supply chains to meet these criteria The new model of supply chain management includes three major pillars managing relationships managing supply chain material flows and managing information Despite all the hoopla about e commerce our research at the Supply Chain Resource Consortium indicates that sourcing and physical distribution form the real building blocks of the next generation of supply chains Business technology leaders can significantly contribute to the strategic goals of their organizations by taking a hard look at the business processes that underlie their supply chains targeting cost saving opportunities identifying IT solutions and proposing investment returns that you can realistically hope to achieve Adapting to change Driving supply chain innovation in organizations is no simple task but in today s harsh economic environment it may mean a company s very survival As Charles Darwin noted those who survive are not the smartest nor the strongest but those who are best able to adapt to change Can your company be among the fittest and adapt Think of the process of mapping your supply chain and business processes as a medical check up for your bottom line Just as a doctor studies the critical measures pulse temperature blood pressure interviews the patient to review symptoms and identifies the location of aches and pains managers must begin with a complete assessment of the company s physical and information flows Before determining the systems requirements to fix things you ll need to determine the status of such critical supply chain metrics as inventory levels cycle times customer complaints and quality rejects Many executives have done this successfully by literally stapling themselves to a customer order and interviewing all the participants they pass along the way through the system Improving communication In almost every project that the Supply Chain Resource Consortium has worked on with partner companies this type of analysis has identified significant opportunities for improved communication among downstream customers internal business functions and upstream suppliers In most cases the lack of communication stems from a single root cause a lack of alignment among business requirements supplier and customer contacts and information systems Before embarking on an expensive supply chain system implementation technology executives need to clearly delineate how the system will help close these gaps A clear business case for improving supply chain performance begins by assigning costs to the impact of poor communication The diagnosis must be justified using hard metrics as well as qualitative symptoms and include a treatment plan Specifically you

    Original URL path: https://scm.ncsu.edu/scm-articles/article/how-mature-is-your-supply-chain (2016-04-30)
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  • A TaylorMade Supply Chain - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    a product of the research and development department Thanks to recent advances in supply chain management the TaylorMade adidas Golf Co can now custom fit manufacture and deliver high end golf clubs to a customer in less than twenty four hours They are the first to offer this product service combination on a large scale In order to make it happen they knew they would have to re design their supply chain Their focus on supply chain integration was the vehicle that let the company reach its goal of improved operational flexibility and efficiency Somewhere along the way they realized they had the capability to support a radical new product service offering But it took strong leadership sound planning and several years to make the positive change Technology Can Help a Supply Chain To assist its supply chain integration TaylorMade now uses an interconnected mix of homegrown and pre packaged software across their supply chain The company installed planning forecasting and collaboration tools to replace their rudimentary technology in 2000 Exactly how rudimentary was the system they replaced Take their inventory management system for instance When Brad Barnett came to the company as Director of Operations in 1999 he felt as if he had walked into 1985 1 The company was managing 1 900 separate stock keeping units SKU s on an Excel spreadsheet Because Barnett came to TaylorMade from UPS where he managed a 3PL contract for Dell Computer Corp he knew exactly how far technology and supply chain management had progressed TaylorMade now uses one system to manage its operations It s all one flow from receiving to assembly floor to the finished goods warehouse and out the door said Barnett 1 By mid 2001 the company had made significant improvements to its production cycle time The range went from 12 to 16 weeks to 6 to 10 weeks 2 This gave TaylorMade the capability to be adaptable to varying customer demand which according to Mark Leposky TaylorMade s vice president of global operations is a big problem the golf equipment industry Because golf is a seasonal game TaylorMade has to deal with demand fluctuations peaks in the warm months and valleys in cold months Depending on the season orders can vary from 4 000 to 40 000 clubs per day 1 Prior to their new system the company did not recognize shifts in demand until about two months too late noted Leposky Because their new software helps with inventory accuracy and labor productivity now we recognize shifts in two to three weeks 2 Perhaps ironically even executives within leading supply chain technology firms agree that improvements require more than just new technologies Stuart Reed IBM vice president of integrated supply chain development and deployment believes that supply chain integration success requires that everyone be on board It is more than difficult he says He believes a company s executives must share the faith My superiors hate when I say this but integration work is spiritual You have

    Original URL path: https://scm.ncsu.edu/scm-articles/article/a-taylormade-supply-chain (2016-04-30)
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  • Leading Change in Supply Chain Management - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    on innovative management strategies demonstrated by Honda Toyota DaimlerChrysler and other automotive competitors It has not helped that GM s share of the U S car and light truck market has been diminishing significantly over the last three decades There is no question that GM has had its share of problems and has even been the object of derision in films such as Roger and Me However relatively little press has been given to GM s accomplishments in becoming a global e business supply chain leader GM has made a commitment to a clear focus on supply chain agility and in the last five years has undergone a radical change in its global management structure While many companies have initiated e business strategies in supply chain improvements GM has also created a three pronged strategy to support its intention of leaning their supply chain through internet technology While many people have laughed about the notion of selling and manufacturing bricks and mortar products such as automobiles on the web GM has embraced this challenge and is feeling the full impact of this strategy on their entire organization GM s strategy involves using the Web to design build and buy innovative new vehicles in ways never imagined A solid global supply chain structure already is in place to ensure that this new strategy is realized Led by its recent CEO Richard Wagoner GM has undergone a radical change throughout its management structure in the last five years These efforts have paid off GM is now viewed by many as one of the most innovative of the Big Three automotive companies and although they still have a number of challenges ahead of them they are making steady progress towards the real competition Toyota Honda BMW and other global competitors Change management is often very confusing for executives to deploy With so many effective tools available it is often difficult to determine which tools should be applied to what situations and how the tools could be used in combination For example benchmarking a process that has been shown to be a valuable means of learning how one company s supply chain performance compares to that of other organizations has proven to be a valuable tool utilized in managing change in the supply chain Through this process companies are able to clearly identify performance gaps and thus focus their supply chain management efforts on the areas most in need of improvement Yet this is only one example of the many mechanisms that can be used to execute supply chain redesign Other tools such as Six Sigma may be used to improve quality throughout the supply chain Lean enterprise may be used to streamline processes or eliminate waste within the supply chain But how does a change leader know which tools are most effective One may find the answer to this question at the recently founded Society for Leadership of Change http www theSLC org This Society provides a forum for sharing knowledge of the

    Original URL path: https://scm.ncsu.edu/scm-articles/article/leading-change-in-supply-chain-management (2016-04-30)
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  • Outsourcing Production Labor: A New Breed of Lean Manufacturing - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    trend towards changing demand on demand supply chains and dramatic increases in the need for a flex and respond capability in the supply chain As customers demand increasing responsiveness in a lean environment more organizations are finding their production requirements will shift dramatically The need to flex the workforce is becoming a major requirement for success in the 21st century business environment Notwithstanding this trend a majority of contract employees eventually become permanently established at companies where they have previously been contracted to Nearly one fourth of the client companies which responded to the survey now have contract employees working permanently in their company Several companies interviewed use contract labor as the only method to hire new employees A try it before we buy it strategy The benefits are significant including reduced 90 day turnover reduced training and benefit costs increased first day productivity and increased productivity metrics The contract labor industry is divided into the following sectors Office and clerical Accounts for roughly one third of the staffing industry s revenue and payroll It covers secretaries general office clerks receptionists administrative assistants etc Professional Technical This combined sector used to be broken into several smaller divisions including professional technical health care and marketing All these areas have been growing thanks to shifts in the market as more people with higher skill and education levels look for the flexibility provided by temporary and contract work and as the demand for these people increases As in the first two sectors the professional technical area now accounts for about one third of industry revenue and payroll It covers a wide range of positions including engineers scientists lab technicians architects technical writers and illustrators draftsmen physicians dentists nurses hygienists medical technicians therapists home health aides custodial care workers accountants bookkeepers attorneys paralegals middle and senior managers and advertising and marketing executives Industrial Currently it accounts for one third of the staffing industry s revenue and payroll and includes the following positions manual laborer food handler cleaners assemblers drivers tradesmen maintenance workers etc Our study Current Trends in Production Labor Sourcing focuses primarily in the latter category in a specialized niche known as production labor services In the production labor environment contract workers are often brought in to help close the gap that may arise due to unplanned increases in requirements seasonal demand temporary production problems or other reasons They may be employed for a period of time and then released once the crisis is over We are also finding however that some organizations are embracing outsourcing production labor for another reason entirely to lean out their manufacturing supply chain Moreover some organizations are finding that they can keep many of their jobs in the US instead of off shoring them by employing production labor services especially in the area of semi skilled workers This worker group is often characterized by high turnover significant on going supervision and high training and safety expenses When low semi skilled workers are outsourced to providers who specialize

    Original URL path: https://scm.ncsu.edu/scm-articles/article/outsourcing-production-labor-a-new-breed-of-lean-manufacturing (2016-04-30)
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  • Transportation Outsourcing Decisions - SCM | Supply Chain Resource Cooperative (SCRC) | North Carolina State University
    taking advantage of economies of scale within the motor carrier industry Motor carrier rates have come down considerably since the Interstate Commerce Commission opened up the industry to more competition Prior to the Motor Carrier Act of 1980 there were only about 18 000 carriers Today there are almost 50 000 carriers According to Dr C G Bereskin in many ways the motor carrier industry resembles the economic model of a perfectly competitive industry in which competition market entries and exits and a generally homogeneous product works together to force rates toward the minimum long run average variable cost 5 In other words companies that do not specialize in the transportation function are more likely to be less efficient than the firms that do specialize in transportation Relative to transportation service providers these firms have trouble adding value to their supply chain through the possession of assets required for the transportation of goods or the related IT functions Consequently many companies are exploring a plethora of transportation related services They desire the control of in house transportation and the price of the low cost carrier The KPMG study concluded that the number two factor for SCM outsourcing decisions was flexibility to increase or decrease capacity 6 In some cases this also drives a manufacturer s decision to keep transportation in house Manufacturers with their own transportation services have increased control over inventory shipments and customer delivery 7 This in turn gives them the ability to reduce costs by increasing productivity 8 Quality improvements were cited in the KPMG study as the third most important factor in an SCM outsourcing decision 9 This is also very important for transportation outsourcing in today s competitive environment The customer s perception of quality can be preserved or enhanced with effective transportation However if executed poorly the transportation function can damage a company s reputation for making a quality product A company that makes a quality product but can t get it to market on time will miss opportunities Companies who can get their products to the customer on time increase the likelihood that the customer will perceive their product as superior to the competitor s 10 Rounding out the top five in the KPMG study were technological capability and workforce flexibility respectively 11 Both factors are critical in a transportation outsourcing decision Companies that outsource transportation need to know that there must be excellent coordination between purchasing and transportation This will give the outsourcers an opportunity to take advantage of low priced carriers and retain control over other logistical aspects of their supply chain To gain a competitive edge they will need to keep up with the speed of technology and be ready to adapt to change 12 References 1 KPMG 1999 September Global Supply Chain Benchmarking and Best Practices Study Phase II Stores Online 2 KPMG 1999 September Global Supply Chain Benchmarking and Best Practices Study Phase II Stores Online 3 The Rise of the 3PL TOTAL supplychain com 4 The Rise

    Original URL path: https://scm.ncsu.edu/scm-articles/article/transportation-outsourcing-decisions (2016-04-30)
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