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Customer_Agreements

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Information about Customer_Agreements
Education

Published on January 9, 2009

Author: aSGuest9809

Source: authorstream.com

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Slide 1: Lean Customer Agreements What are Customer Agreements? : What are Customer Agreements? Inventory Driven VMI Integrated Supply Lead Time Driven Transportation Facilities Other Service Driven Installation Service and support Light Manufacturing Slide 3: Placing & Sizing Market Capabilities VMI Serve Remotely Store ? A inventory only Store A inventory only Branch A&B, C-Min Stock Policy Time Demand VMI ? Serve Remotely Lean Approach Slide 4: Push Vs Pull Distribution supplier Distribution Center Branch Customer VMI VMI supplier Distribution Center Branch Customer VMI VMI Pull Min Max Pull Pull Request Signal Shipped Pull Forecast = 1 Month ROP = SS + DDLT Forecast = 1 Month ROP = SS + DDLT Forecast = 1 Month ROP = SS + DDLT Push Push Push Push Push Periodic / Usage Replenishment Min Max Min Max Slide 5: Pull Distribution? supplier Distribution Center Branch Zone Store Trailer Pull Min = ? Max = ? Pull Pull Request Signal = 1 Wk Shipped = 1Wk Pull Forecast = 1 Month ROP = SS + DDLT Push Min = 1 Wk Max = 2 Wk Kanban? What Role Does the Sale Force Have? : What Role Does the Sale Force Have? Controlling the relationship: Requests for services have to be: Evaluated Justified as adding value Explained to the customer: Cost structure Supply chain capability Alternatives Try a Value Mapping Exercise : Try a Value Mapping Exercise Customer requires an in plant store manned 24/7. Evaluate: Cost Value adding activities Non-value adding activities that are critical to value adding ones Non-value adding activities Construct an argument for the customer to help us reduce costs. Fill Rates : Fill Rates Fill rates are designed to measure in stock availability. The fill rate can be based on: Percentage fill on an order. Percentage fill on a line item. 0-1 on an item. 0-1 on an order. How does the fill rate relate to customer service? Slide 11: Service Level Vs Safety Stock Slide 12: Customer Service? “A” item turns its inventory 10+ times per year. A stockout cannot occur until a reorder point is triggered. Since the ROP may well constitute ½ of the inventory, this could translate into a minimum of 20 orders per year. “B” item turns its inventory 5+ times per year. The ROP will constitute more than 75% of its inventory, translating to fewer than 5 orders per year. “C” item turns its inventory 1 time per year. The ROP will constitute more than 90% of its inventory, translating to less than 1 order per year. Assessing the Significance of Stockouts to Customer Service : Assessing the Significance of Stockouts to Customer Service Stockout cost Shutting down the customer’s production & crews? Expediting product for the customer. Shorter/no shutdown time. Premium freight. Supplier charges. Buying from a competitor. These are the real costs. Perceived may be higher. Assessment and Response : Assessment and Response Assess stockout cost across products and customer types. Large versus small customers. Job types. Delay risks (length). Customer’s customer types. Apply stockout costs to inventory stratification and supply chain strategies. Low carrying cost + high stockout cost = High fill rate High carrying cost + high stockout cost = Medium fill rate, supply chain solutions High carrying costs + low stockout cost = Low fill rate Tracking Customer Response : Tracking Customer Response Tracking lost sales. Tying lost sales to customer buying patterns. Lifetime value of customer tied to stockouts. Reduced purchases across whole goods and parts. Lost customers. All catalog sales are stockouts. Revenue and Availability : Revenue and Availability Higher availability also stresses the need to stratify inventory: A items move 10+ times faster than C items. Most firms stress stockouts on C items out of proportion to A items. Example: 5% allowed stockout on A items. 10% on C. At this rate A items will stockout 5 times more often than C. A items can usually be accessed more readily. A items cause a more negative reaction from customers. Understanding and Controlling Inventory Cost Drivers : Understanding and Controlling Inventory Cost Drivers The Drivers Forecast Error Lead Time Issues The Cost Capital Investment Storage Obsolescence Insurance and Taxes Control : Control Stratification to reposition inventory to A items. Lower forecast error. Fewer lead time problems. Less investment to sales (higher ROI). Measurement to control forecast error. Better forecasting processes. Measurement to control the supply chain. Supplier collaboration. Engaging the Customer : Engaging the Customer Explain stratification policy and ask customer to assist in setting stockout costs. Detail products status in terms of: Ranking Significance to customer Inventory status (ABC, catalog, etc.) Communication on maintenance and other relevant factors.

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