CH1 - Integrated logistics, procurement, materials management and production

Question 1

‼‼Supply Chain: Definition and activities

Answer 1

A global network to deliver products and services, starting from providing raw material to the
consumers using an organized flow of information, physical distribution and payment. Currently, it
also includes networks for disposal and recycling

Activities:

• Design
• Planning
• Operations
• Control
• Monitoring

Question 2

⭐Objectives of supply chain

Supply Chain Management: Definition and goals

Answer 2

“A network of connected and interdependent organizations mutually and co-operatively
working together to control, manage and improve the flow of materials and information
from suppliers to end users.”

Goals of SCM:
- effective deployment of global supply chains
- synchronization of supply and demand
- global measurement of performance
- value generation
establishment of a competitive infrastructure

Question 3

⭐SCOR Models levels and definitions

SCOR Model: Definition, Process elements and Process levels

Answer 3

It is a tool for the standardization of process chains within and between companies

PROCESS ELEMENTS

• Plan
• Procurement
• Production
• Delivery
• Redelivery

PROCESS LEVELS
- Level 1: Statement of number of supply chains, description of their
performance measurement – namely the scope and content
- Level 2: Definition of the sequence of planning - and implementation processes respectively to material flows
- Level 3: Determination of the business processes, orders, permissions,
redeliveries and marketing forecasts

Question 4

Purchasing process: Steps

Answer 4

• Define specification
• Select supplier
• Contract agreement
• Ordering
• Expediting
• Evaluation follow up

Question 5

Cost of material reduction leads to effect in sales- Exercise formulas

Answer 5

R = Profit/Sales
Pc = (Mc*E)/R

Photo

Question 6

‼‼Offshoring of production - Reasons

Answer 6

■ supplementing production location abroad 
■ personnel costs 
■ proximity to customers, market needs 
■ flexible working hours 
■ less bureaucracy
■ better availability of qualified workforce
■ better science and research structure
■ tax advantages

Question 7

‼‼Backshoring of production - Reasons

Answer 7

■ flexibility 
■ capacity utilization
■ quality 
■ coordination costs
■ development of core competencies
■ R&D centers close to production

Question 8

Megatrends in logistics

Answer 8

• globalization of production and material streams
• differentiation and individualization
• climate change and environmentalism
• shortened product-lifecycles
• demographic change
• I&C technologies
• shareholder value thinking

Question 9

Logistics

Answer 9

“Logistics is the management of all activities which facilitate movement
and the co-ordination of supply and demand”

Question 10

Logistics management

Answer 10

“Logistics management is the planning, implementation and control of the
efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer requirements”

Question 11

Logistics network

Answer 11

A network consisting of “suppliers, manufacturing centers, warehouses,
distribution centers, and retail outlets as well as channels for the flow of raw materials, work-in-process inventory, and finished products between the facilities”.

Question 12

‼‼types of logistics and goals

Answer 12

• Procurement logistics: procurement of inexpensive high quality goods
• Production logistics: aligning production with market demand and
  overall business objectives
• Distribution logistics: provision of the right goods, in the right
  quantity at the right time, at the right place and at optimal costs
• Disposal logistics: increased efficiency and reduction of expenses
  in compliance with ecological issues, environmental regulations, laws and directives

Question 13

⭐Tasks of logistics - The 6 r’s

Answer 13

• Right product
• Right location
• Right time
• Right quality
• Right costs
• Right quantity

Question 14

⭐Factors that define the position of logistics within the company

Answer 14

• Product structure
• Core competence of the company
• Contribution of logistics to company profit
• Influence of logistics management within the business management

Question 15

Organization of logistics

Answer 15

• Centralized:Plant logistics follows the instructions of central logistics (coming from management)
• Decentralized: There is no particular logistics department. Logistics takes place in subordinated departments

Question 16

⭐Name 4 conflict of goals

Conflict of goals in logistics

Answer 16

• Production: High availability of parts/High capital commitment in stock
• Customer: Individual products, flexibility/High set up costs, many customer options
• Purchasing: Low cost price, high discount/High order quantities
• Sales: High availability of parts/High stock

Question 17

Success factors of supply chains

Answer 17

• high proportion with weekly production (flexible production)
• transparent planning processes
• detailed and precise forecasting of costs
• measurement of key performance indicators e. g.readiness for delivery
• intensive informal contacts to customers (Supply chain cooperation network)