PAGE3-SessionNine–SupplierPartnershipsandReviewActivity#ProductandProcessDevelopment>Time-to-Market–Introducingaproductearlierthanlatercanmakeasignificantdifferenceinrevenuegeneratedduringitsproduct-lifecycle.>Traditionalvs.ConcurrentEngineeringTraditionalConcurrentSerialapproachInputsofdifferentfunctionsareconsideredsimultaneouslyDepartments(functions)reviewdesign,makeinputs,passitonCross-functionalteamsincludescustomerandsupplierLateresolutionofissues>>Supplierinvolvement:Fastertime-to-market;Theabilitytotapthesupplier’sexpertiseinproductandprocessdesign#Purchasing>PurchasingApproachesPurchaseOrder-Formalizesapurchasetransactionwithasupplier-Stateproductsspecification,…rmation-IsalegallyblindingdocumentBlanketpurchaseorder-Long-termcommitmenttosupplierformaterialquantityatanestablishedprice-Releaseordersagainstablanketorderagreement-Suitabletoroutineordersonaregularbasisofproductionandmaintenance-ReducestransactioncostsLean/JITpurchasingsystem-Basedoncollaborativeseller-buyerrelationship,mediumtolongterm-Buyersendstableproductionscheduletosuppliersonaregularbasis-Materialreleasedtobuyerbasedonkanbansignal-SellerandbuyercommittoZEROdefectsConsignmentInventory-Supplierplacesgoodsatcustomerlocation,butmaintainstitleuntilgoodsaresold-SupplierinvoicescustomerwhengoodsaresoldorconsumedVendor-managedInventory-Basedonaccesstocustomerdata,suppliermanagesgoodsatcustomerlocation-Supplierinvoicescustomerperagreement>TypesofContracttomanageriskBuy-backcontractsSellergivesthebuyertheincentivetoordermoreunitsbyagreeingtobuybackunsoldgoodsatanegotiatedpricethatishigherthansalvagevaluebutlowerthanfullpurchaseprice.Bothpartieshedgetheirrisk.Revenue-sharingcontractsBuyersharessometherevenuefromitssaleswithitssupplierasaconditionforadiscountedwholesalepricefromthesupplier.Pay-backcontractsBuyer(suchasadistributor)agreestopayanagreed-uponpriceforitemsthatitdoernotpurchasefromthemanufacturer.Manufacturer’sriskiscushionedatapricethedistributoriswillingtopaytoavoidstockouts.Cost-sharingcontractsDistributoriswillingtosharesomeproductioncostswithamanufacturerinreturnforadiscountonthewholesaleprice.Productioncostsarehigh,andbuyeriswillingtogivethemanufacturersomeincentivetoproducemoreunitsinordertobufferagainstastockout.PricingagreementsBuyerisallowedtobuyitemsfromapricelistorcatalogatanegotiateddiscountduringacontractperiod.CapacityreservationcontractsManufacturerrevealsitsforecastofbusinessactivitybypayingtoreserveagivenlevelofcapacityatitssupplier.#SupplyChainAcceleration>TotalCostofOwnership(TOC)Insupplychainmanagement…thesumofallthecosts…associatedwitheveryactivitiesofthesupplystream.ThemaininsightthatOCoffers…istheunderstandingthattheacquisitioncostisoftenaverysmallportionofthetotalcostofownership.TOCincludes:Acquisitioncosts,Usagecosts,andEnd-of-lifecosts>PartnershipGoalsandBenefitsLeadtimereductionInventory/stockoutreductionBettercustomerserviceBetterdemandvisibilityandforecastingCostreductionEliminationofredundantassetsandprocessesCustomerandmarketplaceinsightNewmarkerpenetrationFastertime-to-marketDamageandlossprevention>DeliveryApproachesQuickResponse(continuousreplenishment)Quickresponsereliesonapparelsuppliers’abilitytoseepoint-of-saledataatretailstoreonadailyorevenmorefrequentbasis.KnowinginventorylevelsandhowwellparticularitemsaresellingBatchSizeSmallerbatchsizesareconsideredadvantageousinlean/JITenvironments.PackagingInsufficientpackagingcanleadtodamage,whileexcessivelypackagingwillleadtoadditionalcosts.3PL–ThirdPartyLogisticsTheuseofathirdpartybyasupplierandabuyertoprovideproductdeliveryservices.Lean/JITTriggersAtriggerisaphysicalalert(cardsystemorkanban)oranelectronicsignalingsystem.Cross-DockingCross-dockingisamethodofspeedingthetransferofgoodsfromreceivingdockatadistributioncenterdirectlytoanoutboundvehicle.DeliverytoPoint-of-UseandPoint-of-FitDeliverytopoint-of-fitisarefinedversionofpoint-of-use.Componentsaredeli