chapter 1 Flashcards
supply chain
a network between a company and its suppliers
to produce and distribute a specific product to the final buyer.
This network includes different activities, people, entities,
information, and resources. The supply chain also represents the
steps it takes to get the product or service from its original state to
the customer.
why do companies develop supply chains?
so they can reduce their costs and remain competitive in the business landscape
why is supply chain management a crucial process?
optimized supply chain results in lower costs and a faster production cycle
1 job of a supply chain manager?
continuity of supply
6 major change drivers of SC
technology
globalization
empowered consumers
government policy and regulation
sustainability
organizational consolidation and power shift
globalization
creates more economic and political risk,
shorter product life cycle, and the blurring of traditional
organizational boundaries.
Globalization- Inventory management challenges
- Faster duplicability of products & services (China is nimble!!)
- Faster reduction in demand (The next shiny object)
- Requirement of new pricing policies
- Higher risk of obsolescence (Because everyone can copy)
Technology
is a facilitator of internal process and supply
chain transformation. It is also a major force in changing the
dynamics of the marketplace.
Organizational Consolidation/Power Shift
More collaboration among organizations in supply chains
Win-win, improved services such as:
* Scheduled deliveries
* “Rainbow” pallets
* Advance shipments notices (ASNs) shrink-wrapped pallets
Sharing of point-of-sale data to mitigate “bullwhip effect”
Empowered consumers
Consumers are empowered by exponentially expanded
access to product sources and related information and
increased buying power due to high income levels
Government Policy/Regulation
Deregulation has helped improve supply chains
the transportation industry
Expanded services beyond transportation, with
service providers’ role evolving to outsourcing partners (FedEx)
The financial sector
More flexible and responsive to customer needs, making
businesses more cognizant of supply chain management impact on efficiency
and cash flow (Factoring)
the communications industry
A component of the information revolution,
leading to dramatic improvements and opportunities in logistics and supply
chains
Sustainability aka ESG
The pursuit of sustainability is widely recognized as a key
element of successful supply chain management. This is critical to effective risk management and achieving
competitive advantage.