Ch. 1 Basic Concepts Flashcards
supply chain management definition
Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
supply chain definition
a supply chain consists of all stages involved, directly or indirectly, in fulfilling a customer request
- refers to networks of companies that work together and coordinate their actions to deliver a product to market
logistics
refers to activities that occur within the boundaries of a single organization
supply chain activities include (4)
- marketing
- new product development
- finance
- customer service
5 areas that decisions need to be made
- Production
- Inventory
- Location
- Transportation
- Information
Production
- refers to capacity to store
- decisions regarding factories and warehousing
trade off between
responsiveness and efficiency
Factories can be (2)
- product focus (focuses on making the entire product)
2. functional focus (focuses on performing just a few operations)
Warehouses can be (3)
- Stock keeping unit storage
- Job lot storage
- Crossdocking
Stock keeping unit storage
all of a given type of product is stored together
Job lot storage
all the different products related to the needs of a certain type of customer or related to the needs of a particular job are stored together
crossdocking
smaller lots are used according to the needs of the day and quickly loaded onto outbound trucks
Decisions Inventory (3)
- Cycle Inventory
- Safety Inventory
- Seasonal Inventory
Cycle inventory
amount of inventory needed to satisfy demand (large lots)
Safety inventory
held as a buffer against uncertainty
seasonal inventory
inventory that is built up in anticipation of predictable increases in demand that occur at certain times of the year
location
- what activities to performed where
- centralize or decentralize
transportation modes (6)
- ship
- rail
- pipelines
- trucks
- airplanes
- electronic transport
Information used for (2)
- coordinating daily activities
2. forecasting and planning
trade off information
weighing the benefits that good information can provide against the cost of acquiring that information
Participants in the supply chain (5)
- producers
- distributors
- retailers
- customers
- Service Providers
Aligning your supply chain with your business strategy (3)
- understand the market you serve
- define strengths
- develop the needed supply chain capabilities
factors that help to clarify requirements for the customers you serve (6)
- the quantity of the product needed in each lot
- the response time that customers are willing to tolerate
- the variety of products needed
- service level required
- the price of the product
- desired rate of innovation
EOQ
economic order quantity: the most cost effective amount to purchase at a time
virtual integration
finding other companies to carry some of the work (new way)
