supply chain 03 handouts

• Supply chain management system is used by businesses to ensure an efficient and economical supply flow
• Supply chain operations change and align with the fast-paced requirements of the hospitality industry to plan, source, make, and deliver
• Planning stage is the beginning of the supply chain operation, where businesses build a road map to deal with how goods and services meet consumers' requirements and needs
• Key goal of the planning stage is to develop a method to maximize the benefit for both business and organization
• Forecasting in the supply chain refers to predicting demand, supply, or pricing for a product in the hospitality industry by defining patterns using data
• Demand forecasting is the process of using historical data to estimate and predict the future demand for a product or service
• Aggregate planning refers to analyzing, developing, and maintaining a production plan emphasizing uninterrupted, consistent production
• Product pricing can affect demand over time in businesses and supply chains, as it tends to increase sales or gross profit depending on their use
• Planning process allows the business to recognize possible problems in the next stages of the supply chain and identify proper vendors to purchase from
• Sourcing and storage processes involve maintaining a close partnership with raw materials suppliers and managing the inventory of products and services
• Procurement is the acquisition procedure used by an organization to obtain required products and services
• Purchasing is a function in the procurement process associated with ordering goods and services
• Consumption management refers to identifying the number of goods to be acquired/needed in each department and the whole enterprise
• Vendor selection refers to identifying and choosing reliable suppliers for the organization
• Vendor selection involves evaluating available and suitable vendors based on predetermined criteria such as price, quality of goods, reliability, and past performance
• Contract negotiation occurs after narrowing down suppliers, where both parties agree on contract terms including delivery timelines and payment arrangements
• Contract management details payment terms, delivery schedules, and quality expectations of ordered goods to ensure both parties understand their obligations and minimize disagreements
• Inventory management aims to control supply levels in an organization to decrease costs while maintaining desired quality levels
• Cycle inventory fulfills supply requirements between ordering products, ensuring sufficient inventory until the next ordering cycle
• Safety inventory includes extra supplies kept on hand to address sudden increases in demand or unexpected supplier delays
• Seasonal inventory has irregular demand throughout the year, with high and low demands during specific times such as summer for cold beverages and frozen desserts
• ABC analysis ranks inventory items based on importance, categorizing them into A, B, and C categories based on their significance to the business
• Reorder points represent inventory levels at which new orders should be placed, specific to individual items based on average daily usage and safety inventory
• Periodic automatic replenishment (PAR) levels track minimum and maximum inventory levels for items, ensuring new orders are placed when quantities reach the minimum level
• First In, First Out (FIFO) and Last In, First Out (LIFO) dictate the order in which inventory is sold, with FIFO selling the oldest inventory first and LIFO selling the most recently acquired inventory first
• Perpetual inventory management involves continuously updating inventory levels as products are sold or received to provide an accurate view of inventory levels and improve turnover