4-Supply networks

Question 1

What are supply networks?

Answer 1

Chains of suppliers (upstream) and chains of customers (downstream)

Question 2

Why are supply networks important?

Answer 2

They help make sense of:
-competition between firms
-important links between customers and suppliers
-long term operations

Question 3

Vertical integration definition

Answer 3

obtaining a product by an extended branch of a same firm. No external supplier.

defined by:
-direction: of integration (downstream or upstream)
-scope: how deep we integrate
-balance between stages: one stage provides only for the next stage.

Question 4

What are the advantages and disadgavnates of vertically integrating?

Answer 4

advantages: secures reliable acces to supply, may reduce costs due to lower transaction costs, may improve service quality, help understanding other activities in the network.

disadvantages: less flexibility, internal monopoly creation, can’t exploit economies of scale, cutts off innovation, may distract from other core activities.

Question 5

what is outsourcing and what factors influence the decision of outsourcing?

Answer 5

obtaining a product from external firms.

consider
strategic importance
specialized knowledge
superior current performance.

Question 6

Advantages and disadvantages of outsourcing

Answer 6

advantages:
specialized & experienced knowledge, lower prices due to competition, can exploit economies of scale.

disadvantages:
costly communications, risk of delays, treated as many of other customers.

Question 7

what are some of the supply chain trends reconfigurations?

Answer 7

-outshoring (different from outsourcing)
-globalization
-decrease nº o suppliers for lower complexity
-disintermediation
-co-opetition (competitors and cooperators)

Question 8

How do you describe supply networks?

Answer 8

by dyads and tryads, connections between 2 or 3 processes within a network.

tryads are very useful to: identify customer-supplier relationships, emphasise dependance on supplier’s performance when outsourcing, transferring power from buying to supplying organization.

Question 9

How do you choose optimal capacity level of a supply network?

Answer 9

it depends.
-for economies of scales, increasing capacity reduces costs.
-for diseconomies of scale, increasing capacity increases costs (more complexity and not enough demand to compensate).

GRAPHIC!

Question 10

what are the strategies of growth capacity for supply networks?

Answer 10

-capacity leading: adjust capacity and wait for demand to grow. (risk of demand not to grow, incur extra costs, risk of overcapacity)

-capacity lagging: let demand grow and then adjust capacity accordingly. (maybe cannot fulfill demand)

-smoothing with inventory: capacity lagging+leading. (needs a lot of capital investment)

Question 11

what are the advantages of being small?

Answer 11

-locate near hotspots
-greater autonomy
-more flexibility
-explore new technologies