Chapter 1 Flashcards
What is the definition of a Supply Chain?
Network of entities fulfilling customer requests.
Supply chains include suppliers, manufacturers, distributors, retailers, and customers.
What is Supply Chain Management?
Coordination of activities to deliver value and reduce costs.
Effective supply chain management optimizes the flow of products, information, and funds.
What are the components of a supply chain?
- Suppliers
- Manufacturers
- Distributors
- Retailers
- Customers
These components interact to fulfill customer demands.
What are the flows in a supply chain?
- Products
- Information
- Funds (bidirectional)
These flows are essential for the operations of the supply chain.
What is the primary goal of a supply chain?
Maximize supply chain surplus: Customer value - Supply chain cost.
This goal drives the efficiency and effectiveness of the supply chain.
What challenges do supply chains face?
- Complex Network
- Dynamic System
- Conflicting Objectives
These challenges complicate the management of supply chains.
What is meant by a Complex Network in supply chains?
Dispersed geographically.
This geographic dispersion can lead to logistical difficulties.
What does a Dynamic System refer to in supply chains?
Changes in demand, supplier capabilities, and costs.
These changes require supply chains to be adaptable.
What are the three types of decisions in supply chain management?
- Strategic (Years)
- Tactical (Months)
- Operational (Days)
Each type of decision has a different time horizon and focus.
What does Strategic decision-making involve?
Facility locations, outsourcing, partnerships.
These decisions shape the long-term framework of the supply chain.
What does Tactical decision-making involve?
Inventory policies, transportation, and promotions.
These decisions typically cover a medium-term focus.
What does Operational decision-making involve?
Production/delivery schedules, routing.
These decisions are concerned with day-to-day operations.
What is the Cycle View in supply chain management?
Clear roles and outcomes for each supply chain stage.
This view helps clarify responsibilities within the supply chain.
What is the difference between Pull and Push systems?
- Pull: Customer order-driven (reactive)
- Push: Anticipation-driven (speculative)
These systems dictate how inventory is managed and products are delivered.
Give an example of a Pull process.
Dell’s semi-finished products customized post-order.
This approach allows for tailored products based on customer demand.
What is the goal of logistics in supply chain management?
Meet delivery expectations at minimum cost.
Logistics involves various activities like order processing and transportation.
What are current trends affecting supply chains?
- Increased transportation costs due to fuel prices and globalization
- Reduced inventory costs through Just-In-Time (JIT) and Lean practices
These trends influence how companies manage their supply chains.
What did Procter & Gamble achieve through collaboration?
$65 million saved.
Collaborative strategies can lead to significant cost reductions.
What was a notable failure in supply chain management?
Furniture.com failed due to inefficient delivery, despite high sales.
This case illustrates the importance of logistics in overall business success.
