Nov 242017
 
Please share what you find valuable.

Waymo CEO John Krafcik talks self-driving cars

Waymo CEO John Krafcik talks about self-driving cars as well as its pilot program in Phoenix.  He briefly discusses how these vehicles will be part of last mile delivery.  Waymo is part of Google’s parent company, Alphabet Inc.

Self-Driving Car Resources.

Quotes on self driving and autonomous vehicles.

  • Self-driving vehicles stand to make our transportation system safer and more efficient. Advancing this technology to road-ready requires government policy that encourages continued testing and development. This formula is the foundation for what makes America the most innovative country in the world.” ~Kevin McCarthy
  • “If people trust artificial intelligence (AI) to drive a car, people will most likely trust AI to do your job.” ~Dave Waters
  • “If, in writing some article that’s negative, you effectively dissuade people from using an autonomous vehicle, you’re killing people.” ~Elon Musk
  • “Autonomous vehicles are a game changer for supply chain.  Keep up with this technology or risk being left behind.” ~EverythingSupplyChain.com
  • “Google is working on self-driving cars, and they seem to work. People are so bad at driving cars that computers don’t have to be that good to be much better.” ~Marc Andreesen

“The vehicles will be fully self-driving. So you have your own personal space where you can sit back and relax.” ~John Krafcik, CEO Waymo.

Waymo CEO John Krafcik

Nov 242017
 
Please share what you find valuable.

Waymo self-driving cars are here.

Waymo self-driving cars are no longer the future, they are here.  For those who may not know Waymo is what most would see as the Google self-driving car.   Self-driving vehicles will disrupt many industries.  Think how self-driving vehicles will impact supply chain.

Quotes about Self-Driving Cars

  • “As Waymo’s self-driving technology becomes smarter and more capable, its high-performance hardware and software will require even more powerful and efficient compute. Intel’s collaboration with Waymo ensures Intel will continue its leading role in helping realize the promise of autonomous driving and a safer, collision-free future.” ~Brian Krzanich
  • “People are so bad at driving cars that computers don’t have to be that good to be much better. Any time you stand in line at the D.M.V. and look around, you’re like, Oh, my God, I wish all these people were replaced by computer drivers.” ~Marc Andreessen
  • “Self-driving vehicles, automatically choosing the most efficient route… Artificial Intelligence will dramatically improve logistics.” ~Dave Waters
  • “Connectivity offers a great opportunity for General Motors. When you look at the investment we have made in OnStar and putting 4GLT in and the access you have to not only put data in, and we haven’t really tapped into the data you can use from the vehicle.” ~Mary Barra, GM CEO.
  • “We must look for new ways to stop old problems. Fully autonomous vehicle technology holds incredible potential to completely eliminate drunk driving and other causes of traffic deaths.” ~Colleen Sheehey-Church, National President at Mothers Against Drunk Driving (MADD).
  • “Deep Learning will change the lives of all of us.  What is Deep Learning?  It’s behind what makes self-driving cars a reality.”  ~Dave Waters

Self-Driving Cars and Autonomous Vehicles.

Waymo self-driving cars

Nov 222017
 
Please share what you find valuable.

Quotes and Training about Self-Driving Cars.

Self-driving cars are being tested by major companies like Tesla, Ford, Volvo and Google.  In Las Vegas and Phoenix self-driving vehicles are being tested right along side every day drivers.  The technology behind self-driving cars is artificial intelligence, more specifically, deep learning.

  • “Google is working on self-driving cars, and they seem to work. People are so bad at driving cars that computers don’t have to be that good to be much better.” ~Marc Andreesen

Google Self-Driving Cars

  • I think we see the merging of several worlds, the tech industry, the internet and the automotive industry. These two worlds merging is like a smart phone on wheels, or you can say it’s a car that has many of the capabilities of smart phones and computers and so on.” ~Dieter Zetsche
  • “Connectivity offers a great opportunity for General Motors. When you look at the investment we have made in OnStar and putting 4GLT in and the access you have to not only put data in, and we haven’t really tapped into the data you can use from the vehicle.” ~Mary Barra, GM CEO.
  • “Deep Learning will change the lives of all of us.  What is Deep Learning?  It’s behind what makes self-driving cars a reality.”  ~Dave Waters
  • “When Henry Ford made cheap, reliable cars, people said ‘nah, what’s wrong with the horse?’ That was a huge best he made, and it worked.”  ~Elon Musk

Henry Ford Elon Musk

  • “As Waymo’s self-driving technology becomes smarter and more capable, its high-performance hardware and software will require even more powerful and efficient compute. Intel’s collaboration with Waymo ensures Intel will continue its leading role in helping realize the promise of autonomous driving and a safer, collision-free future.” ~Brian Krzanich
  • “Deep Learning will change the lives of all of us.  What is Deep Learning?  It’s behind what makes self-driving cars a reality.” ~Dave Waters.
  • “My goal is for General Motors to lead in safe autonomous driving.” ~Mary Barra

autonomous driving

  • “As the most advanced vehicles on the road today, our self-driving cars require the highest-performance computers to make safe driving decisions in real time. Intel’s technology supports the advanced processing inside our vehicles, with the ability to manufacture to meet Waymo’s needs at scale.” ~John Krafcik 
  • “Once you trust a self-driving car with your life, you pretty much will trust Artificial Intelligence with anything.” ~Dave Waters

self driving cars

  • “Labor accounts for 75% of the cost of transporting shipments by truck, so adopters can begin to realize those savings. Beyond that, while truckers are prohibited from driving more than 11 hours per day without taking an eight-hour break, a driverless truck can drive for the entire day.” ~Ryan Petersen
  • “Self-driving cars are the natural extension of active safety and obviously something we should do.” ~Elon Musk

Self-Driving cars safety

  • “If you recognize that self-driving cars are going to prevent car accidents, AI will be responsible for reducing one of the leading causes of death in the world.” ~Mark Zuckerberg
  • “Self-driving vehicles will be a game changer for supply chain.  If your in the trucking industry understand that self-driving trucks will disrupt your industry.” ~EverythingSupplyChain.com
  • “If you’re trying to create a company. It’s like baking a cake. You have to have all the ingredient in the right proportion.” ~Elon Musk.

Elon Musk autonomous Cars supply chain

  • “People are so bad at driving cars that computers don’t have to be that good to be much better. Any time you stand in line at the D.M.V. and look around, you’re like, Oh, my God, I wish all these people were replaced by computer drivers.” ~Marc Andreessen
  • “The key with autonomous is the whole ecosystem. One of the keys to having truly fully autonomous is vehicles talking to each other.” ~Mary Barra

autonomous ecosystem

  • “Self-driving cars will enable car-sharing even in spread-out suburbs. A car will come to you just when you need it. And when you are done with it, the car will just drive away, so you won’t even have to look for parking.” ~Sebastian Thrun
  • “If you make your living driving be aware that you may be replaced with artificial intelligence.” ~SupplyChainToday.com
  • “The Tesla electric semi could change the trucking industry the same way the iPhone changed the cell phone industry.” ~Dave Waters

Tesla Electric Semi

  • What kind of insurance ought a self-driving car to have? If it goes wrong, who’s liable? ~Margareta Drzeniek-Hanouz
  • “Truck and bus drivers; Uber, Lyft and taxi drivers; self-driving vehicles take those jobs.” ~SupplyChainToday.com.

self-driving supply chain

  • “Sergey and I founded Google because we’re super optimisitc about the potential for technology to make the world a better place. Think about how many people are underserved by transportation today, like those with disabilities, and how self driving cars will transform their lives. Or the wasted time you sit in your car every day commuting to and from work. Or the deaths and injuries that could be avoided.” ~Larry Page
  • “We believe the Tesla semi will deliver a substantial reduction in the cost of cargo, while increasing safety…” ~Elon Musk

Tesla supply chain semi

  • “I always have optimism, but I’m realistic. It was not with the expectation of great success that I started Tesla or SpaceX… It’s just that I thought they were important enough to do anyway.” ~Elon Musk.
  • “If people trust artificial intelligence (AI) to drive a car, people will most likely trust AI to do your job.” ~Dave Waters
  • “If, in writing some article that’s negative, you effectively dissuade people from using an autonomous vehicle, you’re killing people.” ~Elon Musk
  • “My definition of ‘innovative’ is providing value to the customer.” ~Mary Barra

autonomous cars Mary Barra

  • “We must look for new ways to stop old problems. Fully autonomous vehicle technology holds incredible potential to completely eliminate drunk driving and other causes of traffic deaths.” ~Colleen Sheehey-Church, National President at Mothers Against Drunk Driving (MADD).
  • “This decade, for the auto industry, will be defined by the automation of the vehicle. From our standpoint, we see autonomous vehicles as the potential to have the same societal impact that Ford’s moving assembly line did more than 100 years ago.” ~Mark Fields
  • “I can drive this thing and I have no idea how to drive a semi.” ~Elon Musk

Tesla Semi Elon Musk

  • “We are expanding our strategy not just in autonomous driving but also in autonomous things. Drones, trucks, advanced robotics.” ~Edzard Overbeek
  • “Lets go invent tomorrow instead of worrying about what happened yesterday.” ~ Steve Jobs
  • “Self-driving vehicles, automatically choosing the most efficient route… Artificial Intelligence will dramatically improve logistics.” ~Dave Waters

Self-driving artificial intelligence

  • “If you think of standardization as the best that you know today, but which is to be improved tomorrow; you get somewhere.” ~ Henry Ford
  • “Take the self-driving car and the smartphone and put those together and think about how to manage a smart grid because suddenly you have all of this data coming from those two mechanisms that allow for a much higher level of allocating energy much more efficiently.” ~Jonathon Keats
  • “I really believe that one should lead from the front lines and that’s why I’m here.” ~Elon Musk

Tesla Supply Chain

  • “Self-driving cars surely will make a huge contribution to society. We’ll be able to redesign the urban environment so that parks will replace parking lots. Think of the money we’ll save, the reduction in accidents and the incredible freedom this will provide people who can’t drive today.” ~Jen-Hsun Huang 
  • “Autonomous vehicles are a game changer for supply chain.  Keep up with this technology or risk being left behind.” ~EverythingSupplyChain.com
  • “Do you remember when you were a kid, and Christmas Eve, it was so exciting, you weren’t sure what was going to be downstairs? Well, it’s going to be Christmas Eve for a while.” ~Tim Cook

Tim Cook Supply Chain

  • “People should pursue what they’re passionate about. That will make them happier than pretty much anything else.” ~Elon Musk.
  • “With the Model 3, a future compact SUV and a new kind of pickup truck, we plan to address most of the consumer market.” ~Elon Musk

Tesla Supply Chain

  • Self-driving vehicles stand to make our transportation system safer and more efficient. Advancing this technology to road-ready requires government policy that encourages continued testing and development. This formula is the foundation for what makes America the most innovative country in the world.” ~Kevin McCarthy
  • “We are creating a world where computers can take over. Artificial Intelligence, autonomous vehicles, drones, .  Scared yet?”  ~SupplyChainToday.com
  • “The vehicles will be fully self-driving. So you have your own personal space where you can sit back and relax.” ~John Krafcik, CEO Waymo.

Self Driving Waymo

Self-Driving Cars and Autonomous Vehicles.

Nov 222017
 
Please share what you find valuable.

Will the Tesla Electric Semi Truck Deliver on promises?

The Tesla Electric Semi Truck could be to the trucking industry what the first iphone was to the cell phone industry.  What are your thoughts?  “We believe the Tesla semi will deliver a substantial reduction in the cost of cargo, while increasing safety…” ~Elon Musk

Tesla, Elon Musk and Transportation Resources.

Quotes about Self-Driving Vehicles.

  • “Labor accounts for 75% of the cost of transporting shipments by truck, so adopters can begin to realize those savings. Beyond that, while truckers are prohibited from driving more than 11 hours per day without taking an eight-hour break, a driverless truck can drive for the entire day.” ~Ryan Petersen
  • “If you recognize that self-driving cars are going to prevent car accidents, AI will be responsible for reducing one of the leading causes of death in the world.” ~Mark Zuckerberg
  • “If you’re trying to create a company. It’s like baking a cake. You have to have all the ingredient in the right proportion.” ~Elon Musk.
  • “The Tesla electric semi could change the trucking industry the same way the iPhone changed the cell phone industry.” ~Dave Waters
  • What kind of insurance ought a self-driving car to have? If it goes wrong, who’s liable? ~Margareta Drzeniek-Hanouz
  • “Truck and bus drivers; Uber, Lyft and taxi drivers; self-driving vehicles take those jobs.” ~SupplyChainToday.com.
  • “If people trust artificial intelligence (AI) to drive a car, people will most likely trust AI to do your job.” ~Dave Waters
  • “We are expanding our strategy not just in autonomous driving but also in autonomous things. Drones, trucks, advanced robotics.” ~Edzard Overbeek
  • “As Waymo’s self-driving technology becomes smarter and more capable, its high-performance hardware and software will require even more powerful and efficient compute. Intel’s collaboration with Waymo ensures Intel will continue its leading role in helping realize the promise of autonomous driving and a safer, collision-free future.” ~Brian Krzanich
  • “Google is working on self-driving cars, and they seem to work. People are so bad at driving cars that computers don’t have to be that good to be much better.” ~Marc Andreesen
  • “Lets go invent tomorrow instead of worrying about what happened yesterday.” ~ Steve Jobs
  • “Unfortunately, there seems to be far more opportunity out there than ability…. We should remember that good fortune often happens when opportunity meets with preparation.” ~ Thomas Edison
  • “If, in writing some article that’s negative, you effectively dissuade people from using an autonomous vehicle, you’re killing people.” ~Elon Musk
  • “My definition of ‘innovative’ is providing value to the customer.” ~Mary Barra
  • “Once you trust a self-driving car with your life, you pretty much will trust Artificial Intelligence with anything.” ~Dave Waters
  • “Connectivity offers a great opportunity for General Motors. When you look at the investment we have made in OnStar and putting 4GLT in and the access you have to not only put data in, and we haven’t really tapped into the data you can use from the vehicle.” ~Mary Barra, GM CEO.
  • “We must look for new ways to stop old problems. Fully autonomous vehicle technology holds incredible potential to completely eliminate drunk driving and other causes of traffic deaths.” ~Colleen Sheehey-Church, National President at Mothers Against Drunk Driving (MADD).

“When Henry Ford made cheap, reliable cars, people said ‘nah, what’s wrong with the horse?’ That was a huge best he made, and it worked.”  ~Elon Musk

Elon Musk Henry Ford

“With the Model 3, a future compact SUV and a new kind of pickup truck, we plan to address most of the consumer market.” ~Elon Musk

Tesla Electric Semi

“Self-driving cars are the natural extension of active safety and obviously something we should do.” ~Elon Musk

Tesla Semi

Nov 172017
 
Please share what you find valuable.

Elon Musk Reveals the Dream Truck: Tesla Semi.

“We believe the Tesla semi will deliver a substantial reduction in the cost of cargo, while increasing safety…” ~Elon Musk

Other resources you may find interesting.

Elon Musk Quotes.

  • “I could either watch it happen or be part of it.” ~Elon Musk.
  • “People should pursue what they’re passionate about. That will make them happier than pretty much anything else.” ~Elon Musk.
  • “It is a mistake to hire huge numbers of people to get a complicated job done. Numbers will never compensate for talent in getting the right answer (two people who don’t know something are no better than one), will tend to slow down progress, and will make the task incredibly expensive.” ~Elon Musk.
  • “I always have optimism, but I’m realistic. It was not with the expectation of great success that I started Tesla or SpaceX… It’s just that I thought they were important enough to do anyway.” ~Elon Musk.
  • “Failure is an option here. If things are not failing, you are not innovating enough.” ~Elon Musk.
  • “I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice: constantly think about how you could be doing things better and questioning yourself.” ~ Elon Musk.
  • “If you’re co-founder or CEO, you have to do all kinds of tasks you might not want to do… If you don’t do your chores, the company won’t succeed… No task is too menial.” ~Elon Musk,
  • “I think it is possible for ordinary people to choose to be extraordinary.” ~Elon Musk

Tesla Semi

Nov 172017
 
Please share what you find valuable.

Tesla Semi truck and Roadster event in 9 minutes

Elon Musk unveils amazing new vehicles.  The Tesla semi could completely change trucking and the Tesla Roadster does 0-60 mph in under 2 seconds.  Yes, under two seconds.

Elon Musk Videos:

Elon Musk and Self-Driving Car Quotes

  • “I think the best way to attract venture capital is to try and come up with a demonstration of whatever product or service it is and ideally take that as far as you can. Just see if you can sell that to real customers and start generating some momentum. The further along you can get with that, the more likely you are to get funding.” ~Elon Musk.
  • “Self-driving cars are the natural extension of active safety and obviously something we should do.” ~Elon Musk
  • “Deep Learning will change the lives of all of us.  What is Deep Learning?  It’s behind what makes self-driving cars a reality.” ~Dave Waters.
  • “If you recognize that self-driving cars are going to prevent car accidents, AI will be responsible for reducing one of the leading causes of death in the world.” ~Mark Zuckerberg
  • “Sergey and I founded Google because we’re super optimisitc about the potential for technology to make the world a better place. Think about how many people are underserved by transportation today, like those with disabilities, and how self driving cars will transform their lives. Or the wasted time you sit in your car every day commuting to and from work. Or the deaths and injuries that could be avoided.” ~Larry Page
  • “Truck and bus drivers; Uber, Lyft and taxi drivers; self-driving vehicles take those jobs.” ~SupplyChainToday.com.
  • “When Henry Ford made cheap, reliable cars, people said ‘nah, what’s wrong with the horse?’ That was a huge best he made, and it worked.”  ~Elon Musk, CEO of Tesla, SpaceX and the Boring Company.
  • “People are so bad at driving cars that computers don’t have to be that good to be much better. Any time you stand in line at the D.M.V. and look around, you’re like, Oh, my God, I wish all these people were replaced by computer drivers.” ~Marc Andreessen
  • “I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice: constantly think about how you could be doing things better and questioning yourself.”  ~ Elon Musk.
  • “I would just question things… It would infuriate my parents… That I wouldn’t just believe them when they said something ’cause I’d ask them why. And then I’d consider whether that response made sense given everything else I knew.” ~Elon Musk

Tesla semi truck

Nov 162017
 
Please share what you find valuable.

Need Shipping and Transport Training? Try these resources.

Shipping Process.

Shipping and Transport Training.

Nov 112017
 
Please share what you find valuable.

Wide assortment of Technology and Automation news by topic:

  1. Automation News
  2. Internet of Things (IoT) News
  3. Digital Transformation
  4. Big Data
  5. Blockchain
  6. Artificial Intelligence
  7. Machine Learning
  8. Autonomous Vehicles
  9. Drones
  10. Augmented Reality
  11. Chatbot News

RSS Automation News

RSS Internet of Things (IoT) News

RSS Digital Transformation News

RSS Big Data News

RSS Blockchain News

RSS Artificial Intelligence News

RSS Machine Learning News

RSS Autonomous Vehicle News

RSS Drone News

RSS Augmented Reality News

RSS Chatbot News

Nov 112017
 
Please share what you find valuable.
Quick way to get up to speed on the latest supply chain news.

RSS Supply Chain News

RSS Logistics News

RSS Manufacturing News

RSS Procurement News

 

Nov 102017
 
Please share what you find valuable.

ACTIVITY BASED COSTING

A method which allows managers to better allocated costs associated with specific cost drivers.

 


 

BENCHMARKING

Companies use benchmarking to identify best practices within industry which will enhance profitability, processes, efficiency, etc.  

Benchmarking

 


 

BULLWHIP EFFECT/BEER GAME

Unexpected changes in demand patterns will continue to escalate further up the supply chain.    Problems tend to escalate in supply chains where communication is minimal between supply nodes.  A small wave in the middle of the ocean may end up as a tidal wave near the shore.  The bullwhip effect can best be described using the “Beer Game.” It is an exercise that showcases the problems that arise in a company with minimal communication in the supply chain.  A quick 15 minute game graphically represents the variable opportunities that can be found in the supply chain.  Feel free to e-mail me if you would like to know how the beer game could be used as a training tool at your company.    

Causes of the Bullwhip Effect:

  • Poor communication throughout the supply chain

  • Poor ordering practices

  • Poor reaction to backlogs

Beer Distribution Game

Beer Game

Beer Game Scenario

BullWhip Effect

Play the Beer Game

Taming the Bullwhip Effect

 


 

CAUSE & EFFECT DIAGRAMS (FISH BONE)

This diagram also referred to as a fishbone diagram allows a person to drill down and find where a problem originates.

Cause and Effect

Fish Bone and Six Sigma

Links from iSixSigma

 


 

 


 

COST MANAGEMENT 

Cost Management – analyzing the costs of purchased goods in order to develop strategies to lower costs while improving supplier relationships.  The following table is from a paper written by Lisa Ellram entitled “A Structured Method for Applying Purchasing Cost Management Tools.”  The article was published by the International Journal of Purchasing and Materials Mangement 11-19.  I highly recommend reading this article.

Questions to be Addressed During Cost Analysis/Overhead Analysis

1.  Which costs are necessary and legitimate?

2.  Are amounts estimated for the necessary cost items reasonable?

3.  Is the overhead allocation to this item potentially subsidizing another item which the organization sells?

4.  Have the correct allocation bases been used?  If not, is it to our benefit to challenge the allocation methods?

5.  Are only those expenses which should be allocated to our purchase so allocated?

6.  Are there allowances for contingencies?  Do these allowances seem legitimate?

7.  Are profits reasonable enough, yet not excessive, to keep the supplier motivated?

ORDERING COST

Order Cost = (Annual Demand * Order Cost)/Order Quantity in Units

PURCHASING COSTS

Purchasing Cost = Annual Demand * Price per unit

TOTAL PURCHASING COST

Total cost = Ordering Cost + Carrying Cost + Purchasing Cost

 


 

CPFR – Collaborative Planning, Forecasting and Replenishment

CPFR Benefits Calculator

The CPFR Value Proposition


e-PROCUREMENT

e-Procurement – e-procurement vendors include Oracle, Ariba, and CommerceOne.  This software allows electronic transactions to take place.  

 The ROI of the e-procurement system should include the cost of the technology platform, the cost of content management and the integration costs for the system to be live.  Determine all benefits for an e-procurement system to find the ROI.     

BENEFITS FROM E-PROCUREMENT

  • Consolidate supplier base – allows a company to work with fewer suppliers leveraging its ability to aggregate spend.

  • Improves communication – reduces variability in the supply chain.

  • Free buyers to work on strategic tasks – buyer’s spend less time on tactical buys and more time on strategic issues.

  • Decrease cycle times – especially important for companies in the technology industry.

  • Lower transaction and processing costs – automating the purchasing process will decrease the amount of non-value added activities

  • Reduce maverick spending –  maverick spending is said to be 10%-20% higher than purchasing from companies with negotiated contracts.  

  • Enhanced reporting and auditing tools – an e-procurement system will track all costs allowing a company to determine the spend to each supplier.

  • Decreased prices

  • Improve compliance with approved suppliers increasing bargaining leverage

  • Better Approval Controls

  • Head count reduction

  • Better utilization of assets

  • Increase inventory turnover

  • Quicker ramp up for new employees

  • Faster response times

Indirect Goods have little differentiation and are primarily compete with price.  The best items for e-procurement are indirect goods that are routinely purchased.  The items classified as MROs are the most suitable for an e-procurement system.  Most companies start with MRO due to the high probability of success running through e-procurement.  Anticipated savings fro MRO items range from 5-20%.

Direct Goods can be much more difficult to procure through a marketplace.  Standard direct items such as nuts and bolts are easily purchased through a marketplace.  Configurable items are much more difficult to purchase through and marketplace and most content management companies are staying away from this market at this moment.   

e-Procurement platforms include AribaOracleCommerceOne, and i2.

 


 

ERP

ERP (Enterprise Resource Planning) 

ERP Definition (3rd party)

 


 

INVENTORY

Inventory Carrying Costs associated with carrying inventory include:

Interest on Capital Costs – this is the largest component of carrying cost and is associated with money tied up.

Taxes & Insurance – insurance and taxes has to be paid on the current inventory.

Obsolescence & Depreciation – inventory obsolescence is a major issue with products with a short shelf life or lose value over time (computer products).  Companies involved with products that become obsolete quickly should be focusing on decreasing cycle times.

Storage – the cost associated with having a facility to hold the inventory.

Opportunity Cost – what could the capital be used for that is tied up in inventory.

Costs of running out of inventory:

Loss of customer/sale

Bad reputation

Disruption in supply chain

INVENTORY CARRYING/HOLDING COST

Carrying Cost = (Price per unit * Carrying cost percentage * Order Quantity in Units)/2

AVERAGE INVENTORY

Average Inventory = EOQ/2 + safety stock

ECONOMIC ORDER QUANTITY

  • Demand is known and is constant

  • No quantity discounts

REORDER POINT

Reorder point = Estimated Demand * Lead Time

Capital Costs

Inventory Control Websites

Inventory Control Systems

Managing Independent Inventory

Management of Inventory

Mysterious Cost of Carrying Inventory

Stock Control Mathematics

Supply Chain

Total Cost of Procurement Estimator

Total Ownership Cost of Inventory

 


 

KANBAN

Kanban – an Integrated JIT system

Kanban – University of Cambridge

 


 

LOCATION ANALYSIS

Location Analysis

  • Transportation and logistics cost; closeness to markets

  • Wages

  • Taxes

  • Utilities such as sewers, water, gas and electricity

  • Access to vendors and materials

  • Access to customers

  • Labor supply

  • Climate

  • City Ordinances

  • Attitudes within the community

  • Incentives from the community

  • Land available

  • Proximity to freeway/railroad/ocean/airport

 


 

LOGISTICS

Business Logistics

MASTER PRODUCTION SCHEDULE

Master Production Schedule Detailed Information

 


 

MIDDLE WARE (E-BUSINESS)

Middle Ware – also called B2Bi (business integration) this product allows integration not only internally but also from buyer to supplier.  This process significantly enhances communication between buyer and supplier allowing better visibility through out the supply chain.

EAI (Enterprise Application Integration) – integrating systems in house.

Adapters/Connectors – the plug and play functionality of a B2Bi system to another technology platform such as Oracle, Ariba or CommerceOne.  Adapters/Connectors should significantly decrease the implementation time of the product and make the entire implementation much smoother.

Middle Ware companies include webMethodsTibcoVignetteExtricityCommerceQuest and FrontStep.

 


 

MONTE CARLO SIMULATION

Monte Carlo Simulation

 


 

OUTSOURCING  ADVANTAGES/DISADVANTAGES

Advantages to Outsourcing

  • Cost reduction

  • More flexibility with manufacturing and capacity.

  • Lower labor costs

  • Capital does not need to be invested in machinery or plant capacity

  • Not a core competency so outsource it

  • Flexibility

Why People Don’t Outsource

  • Loss of control over the process.  It is imperative to choose the correct outsourcing partner and to form contractual arrangements to ensure appropriate delivery and lead times.

  • Afraid of outsourcing competitive advantage.  IBM outsourced both the microchip (Intel) and the operating system (Microsoft).

  • Partnering with wrong supplier.

  • Costs are not justified

  • Company wants to vertically integrate

  • Does not understand the benefits of outsourcing

Insourcing/Outsourcing

 


 

PARETO RULE

The simplest way to describe the Pareto rule is 80/20.  For example, 80% of a companies profits will generally come from 20% of the customers.  If this is true, then 20% of the valued customers should receive 80% of the service.  Many times however, 80% of the service goes to 20% of the bad customers.

Pareto Analysis

 


 

POSTPONEMENT

Waiting as long as possible to put the finishing touches on a product.  For example: HP would wait to put in its power cord until it knew if it was being sold in the US or abroad.  The US uses 110 and most other countries use 220.

 


 

PROCESS MAPPING

Process mapping – builds a flow chart of the process being analyzed in order to standardize or find areas of improvement.  The primary information in the flow chart is each step in the process and the amount of time consumed in each step.  Once the flow chart is complete, the process can be analyze by the process time and value added activities.  Start with the longest process time.  Begin by asking questions why it takes so long and where in the process can steps be taken out in order to decrease this time.  Do this with each step in the process.  While analyzing the process time manager’s would most likely be concerned with value added activities in order to decrease the process times.  Be sure to look for duplicate transactions, unnecessary steps, and anything adding little value.

Flowcharting

Customer/Supplier Map

 


 

PROCUREMENT

Procurement paper

Purchasing Strategies

 


 

QUALITY

Continuous improvement in order to reach superior quality should be the goal of every company.  Quality helps to lower cost and is one of the primary factors in the purchase making decision.  The level of quality also distinguishes a company’s product/service.  A high quality product can command a high price where a low quality product will have a less expensive price tag.

Quality in manufacturing is generally measured by the number of defects compared to the output.  When there is a defect in a product there are many costs that come with it including: rework, waste, labor usage, late deliveries and poor customer service.

Quality of the product is located in the:

  • Product design

  • Process design

  • Labor (how skilled are the workers)

  • Direct Material

  • Equipment

  • Number of inspection points

Costs associated with poor quality:

  • Decreased sales

  • Bad reputation

  • Waste

  • Rework

  • Late Deliveries

  • Poor customer service

  • Labor usage

There are three gurus of quality that will most likely be mentioned during quality discussions.  They include Dr. Edward DemingDr. Joseph Juran and Philip Crosby.

Deming’s 14 Points

Six Sigma

Six Sigma Discussion

Supplier Quality


SCOR (SUPPLY CHAIN OPERATIONS REFERENCE model)

A methodology for supply chain improvement developed by the Supply-Chain Council.  

PLAN -> SOURCE -> MAKE -> DELIVER -> RETURN

SCOR articles

SCOR model overview

 


 

SIX SIGMA

What is Six Sigma

Six Sigma Calculator

Six Sigma Quick Reference

 


 

STRATEGIC COST MANAGEMENT

Strategic Cost Management contains supply chain analysis, strategic positioning analysis and cost driver analysis.  By evaluating each of these three and manager will be able to better manage and understand costs.

Supply Chain Analysis – management of the flow of information and products from earliest supplier to the ultimate consumer.  This also includes the disposal of the product.

Strategic Positioning Analysis – what is the value proposition of the company: cost leadership, innovation, niche, speed, etc.

Cost Driver Analysis – what processes or transactions create costs in the supply chain.  

Cost Analysis:

  •  Can a less expensive material/components be used while maintaining quality?

  • Are the costs reasonable?

  • Is a standard item in the market a suitable substitute?

  • Can the weight of the item be reduced?

  • Can the packaging be redesigned to reduce costs?

  • Are the correct costs being allocated to the project?  

  • Have the correct activity based costing methods been used?

  • Is the product over engineered?  Could a lower quality product be substituted?

  • Are other suppliers making a comparable product?

  • Which costs are necessary?

Procurement and Sourcing Strategy Development

 


 

SUPPLIER MANAGEMENT

Supplier Management – managing suppliers in order to reduce overall cost.  Suppliers must be separated by the number of purchases (one time buy vs. ongoing) and the relationship wanted with the supplier (from strategic to distant relationship.

Supplier management also includes supply base reduction.  Most companies deal with more suppliers than needed.  By decreasing the supply base, a company can leverage its spend with fewer suppliers, therefore, getting better overall prices.  Fewer suppliers also mean better relationships with your key suppliers.

Are All Your Trading Partners Worth It?

Supplier Management Questions

Supplier Management and Development

Supplier Evaluation and Selection

 


 

SUPPLY CHAIN

There are various descriptions of supply chain management.  Two that are commonly used are “cradle to grave” and “dirt to dirt.”  The supply chain starts from the origin of the raw material and ends once the product has been discarded or recycled.  

Getting the right product, to the right place, in the right quantity, with the right quality, at the right cost.  

The primary decisions made within the supply chain include:

  • Sourcing

    • Quality of product

    • Choosing suppliers

    • Location of suppliers

    • How much product to order

    • Transportation channels

  • Production

    • Location of production (domestic, international)

    • Make vs. Buy

    • Capacity of plants

    • Quality of the product (low cost leader, differentiation strategy)

  • Inventory

    • How much inventory to hold (safety stock)

    • Should the company do JIT

    • how much to order

    • when to order

  • Logistics

    • Transportation – best way to get the product to the customer

      • Truck

      • Rail

      • Air

      • mode of transport

      • shipment size

    • Location of distribution centers in order to keep customer service high and costs low

Some of the objectives of a supply chain manager include:

  • Increase communication along all nodes of the supply chain to create an uninterrupted flow of materials.  

  • Decrease inventory while still maintaining high customer service levels.

  • Reduce the supplier base and develop supplier relationships in order to reduce overall costs.

  • Standardize parts as much as possible in order to reduce the amount of inventory needed to be carried.

An Introduction to Supply Chain Management – Penn State

Principles of Supply Chain Management – techexchange.com

 Supply Chain Introduction

What XML Will Do For Supply Chain Management – DM Review

 


 

TARGET COSTING

Target costing is a methodology of costing new products.  The target cost is derived by subtracting the desired profit from the market price (Target cost = market price – desired profit).

Target Cost Workshop

 


 

TOTAL COST OF OWNERSHIP

Total Cost of Ownership – the cost of the product starting from the initial planning stage to the ultimate disposal of the product. Example: the total cost of a vehicle begins during the search while visiting various websites and car dealers. The purchase of the vehicle is where most people believe the majority of the cost lies. This isn’t necessarily true. The total cost of the vehicle also includes insurance premiums, gas mileage, maintenance problems etc.

Total Cost of Ownership

Determing Your PC’s TCO – a brief paper on the TCO of computers.

 


 

VALUE ADD

Value add refers to the added benefit a service or product provides.  Non-value added refers to an activity performed by a company that does not enhance the value of the product produced.  One of the primary responsibilities of a supply chain manager is to take out all non-value added activities.

 


 

VARIABILITY

Reducing variability is one of the most important aspects of supply chain management.  Variability refers to the uncertainty in a supply chain.  A classic example of jargon used by a supply chain consultant would be: “In order to reduce the variability in the supply chain we need to increase the visibility.”

For example, many vendors supplying product to retail stores have a great amount of variability when it comes to demand forecasts.  In order to reduce this variability a retail store can send real time data from the check out register directly to the supplier.  This enables the vendors to better manage their supply chain and passing on the cost savings to the customer.

Increase visibility, Reduce variability. These two activities encompass all layers of supply chain management.  I believe this motto should be engrained into every supply chain manager’s thinking.  Let me know what you think.

 


 

VENDOR MANAGED INVENTORY

The primary benefits of VMI are inventory and stock out reductions.  

VMI Definition and More

 


 

VISIBILITY

Supply chain visibility is terminology that will be used significantly among consultants.  Basically, this is saying to increase communication among the different nodes in the supply chain.  This will enable a company to better understand what is going on throughout the supply chain.  By increasing visibility, you reduce variability, which will improve overall operations of the company.

Supply Chain Visibility Boosts Bottom Line

 


 

XML

XML – an extensible mark up language providing a flexible way to share information through the world wide web and intranets.  XML allows users to form their own language using meta tags.  HTML is the language that is used on the web.  Many people predict that XML will take over HTML as the main language used to produce web pages.  A new language, XHTML is out in order to bridge the gap between HTML and XML.  The difference between HTML and XML is that HTML describes what the words look like and XML describes what the words are.

What is XML?

Ok, So What is This XML Thing?


WAREHOUSE MANAGEMENT SYSTEM

Warehouse Management

 


 

WEB DEVELOPMENT

There are two main types of websites: informational and e-commerce.  SupplyChainToday.com is an informational based website.  A website that exchanges goods for funds is an e-commerce website.

I encourage small businesses who outsource informational based websites to consider bringing it in-house.  This is for information websites, not e-commerce websites.  E-commerce websites are much more difficult to maintain.  If the company website is going to cost more than $1,000 definitely look into building the site in-house.  If you do not know much about web development I would be happy to give a training session in front page.


Computer Terminology (3rd party)

e-Business Terminology

Glossaries

Terminology Generator (3rd party site)