5: Supply Chain Management

Question 1

Supply chain management

Answer 1

Management of upstream and downstream organisation.
Management of 3 flows of materials, info and resources.
Creates value for customers and improves efficiency.

Question 2

Logistics management

Answer 2

Transportation and storage from point of origin to the point of consumption.

Question 3

Supply chain

Answer 3

Network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumers.

Question 4

Logistics involves getting 5 things right (‘on time in full’):

Answer 4

The right product
in the right way
in the right quantity and right quality
in the right place at the right time
for the right customer at the right cost.

Question 5

Capital flows…

Answer 5

…upstream.

Question 6

Information flows…

Answer 6

…both ways.

Question 7

Materials flow…

Answer 7

…downstream.

Question 8

Supply Chain Operations Reference (SCOR) model

Answer 8

Describes the business activities associated with satisfying a customer’s demand.
Can be used to analyse the current state of the company w.r.t its goals etc.
Provides best practices information that companies can use to elevate their supply chain models.

Question 9

Proper Purchasing Organisational (PO) design

Answer 9

Assessing and selecting structure and a formal system of communication.
Authority - who makes the decisions?
Division of labour - what should everyone be doing? etc.
Coordination.
Control.
Responsibility.

Question 10

Benefits of supply chain planning software

Answer 10

Aim is to capture and share real-time or near real-time data across the supply chain.
Improve forecast accuracy.
Optimise production schedule.
Reduce working capital costs.
Shorten cycle times.
Cut transportation costs.
Improve customer service.

Question 11

Supply chain process includes:

Answer 11

Purchasing function,
Production function,
Demand planning function,
Logistics function.

Question 12

Value chain

Answer 12

Concerns the primary and secondary support activities that can lead to competitive advantage.

Question 13

Purchasing: strategic items

Answer 13

HIGH complexity of supply market,

HIGH importance of purchasing.

Question 14

Purchasing: bottleneck items

Answer 14

HIGH complexity of supply market,

LOW importance of purchasing.

Question 15

Purchasing: leverage items

Answer 15

LOW complexity of supply market,

HIGH importance of purchasing.

Question 16

Purchasing: noncritical items

Answer 16

LOW complexity of supply market,

LOW importance of purchasing.

Question 17

‘Market based’ / ‘transactional’ supply arrangements

Answer 17

Emphasis on contracting.

Question 18

‘Partnership’ supply arrangements

Answer 18

Emphasis on relationships.

Question 19

An efficient, smooth-running supply chain can give a company a ______

Answer 19

Competitive advantage.

Question 20

SCM should focus on 4 things (4 Rs):

Answer 20

Responsiveness, reliability, relationships, resilience.

Question 21

Bullwhip effect

Answer 21

Slight changes in actual demand create problems.
Partners build ‘just in case’ inventories.
Lack of trust among partners.
Stockpiling result in huge costs.
Manufacturers cannot plan production.
Cannot order material from suppliers.

Question 22

Solution to the bullwhip effect?

Answer 22

Information sharing.