Chapter 1: Understanding Supply Chain Flashcards
The term “supply chain management” arose in the late ___ and
came into widespread use in the ____.
1980s
1990s
Term used to denote supply chain management before.
“logistics” and “operations management”
the alignment of firms that bring products or
services to market.
supply chain
It consists of all stages involved, directly or indirectly, in fulfilling a customer request.
supply chain
ToF. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves.
True
A _____ is a network of facilities and distribution options that performs the functions
of procurement of materials, transformation of these materials into intermediate and
finished products, and the distribution of these finished products to customers.
supply chain
The systemic, strategic coordination of the traditional business functions and the tactics
across these business functions within a particular company and across businesses within the supply chain, for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole.
Supply Chain Management
is the coordination of production, inventory, location, and
transportation among the participants in a supply chain to achieve the best mix of
responsiveness and efficiency for the market being served
Supply chain management
This activity includes the creation of master production schedules that take
into account plant capacities, workload balancing, quality control, and equipment maintenance.
Production
The primary purpose is to act as a buffer against uncertainty in the supply chain.
inventory
Answers the question “How should inventory be moved from one supply chain location to another?”
Transportation
With good ______, people can make effective decisions about what to produce and how much, about where to locate inventory and how best to transport it.
information
Five areas of supply chain management
Production
Inventory
Location
Transportation
Information
refers to the rate at which sales to the end customer occur.
throughput
The goal or mission of supply chain management can be defined using Mr. Goldratt’s words as …
“Increase throughput while simultaneously reducing both inventory and operating expense.”
Drivers of Supply Chain
Facilities
Inventory
Transportation
Information
Sourcing
pricing
places where inventory is stored, assembled or fabricated
Facilities
Production sites and storage sites
Facilities
Raw materials, wip, finished goods within a supply chain
Inventory
Inventory policies
Inventory
Moving inventory from point to point in a supply chain
Transportation
Combination of transportation modes and routes
Transportation
Data and analysis regarding inventory transportation facilities throughout the supply chain
Information
Potentially the biggest driver of supply chain performance
Information
Functions a firm performs and functions that are outsourced
Sourcing
Price associated with goods and services provided by firm to the supply chain
Pricing
Refers to the capacity of a supply chain to make and store products
Production
Three main approaches to use in warehousing
Stock keeping unit (sku) storage
job lot storage
cross docking
In this traditional approach all of the given type of products is stored together this is an efficient and easy to understand way to store products
Stock keeping unit (sku) storage
In this approach all the different products related to the needs of a certain type of customer or related to these needs of a particular job are stored together
Job lot storage
This allows for an efficient picking and packing operations but usually requires more storage space than the traditional sku storage approach
Job lot storage
An approach that was pioneered by walmart in its strive to increase efficiencies in the supply chain
Cross docking
In this approach product is not actually warehouse in the facility instead the facility is used to a house a process where trucks from the suppliers arrive and unload large quantities of different products list large lots are then broken down into smaller lots smaller lots of different products are recognized according to the needs of the day
Cross docking
Spread throughout the supply chain and includes everything from raw materials to work in process to finish goods that are held by the manufacturers distributors and retailers of a supply chain
Inventory
Inventory that is held as a buffer against uncertainty
Safety inventory
If the demand forecasting could be done with perfect accuracy then the only inventory that would be needed would be ____
Cycle inventory
This is inventory that is built up in anticipation of predictable increases in demand that occurs in a certain times of the year
Seasonal inventory
Refers to the geographical siting of supply chain facilities
Location
Types of activities in location
Centralized and decentralized
Refers to the movement of everything from raw material to finish goods between different facilities in a supply chain
Transportation
Six basic modes of transport that a company can choose from
Ship
rail
pipelines
trucks
Airplanes
electronic transport
It is a very cost efficient but also the slowest mode of transportation
Ship
Limited to use between locations that are situated next to the navigable waterways and facilities such as harbors and canals
Ship
A very cost efficient but can be slow, this mode is also restricted to use between locations that are severed by rail lines
Rail
It can be very efficient but are restricted to commodities that are liquids or gases such as water oil and natural gas
Pipelines
Relatively quick and very flexible mode of transportation, it can go almost anywhere
Trucks
Cost of this mode is prone to fluctuations though as the cost of fuel fluctuates and the condition of roads varies
Trucks
Are very fast mode of transportation and are very responsive this is also the most expensive mode and it is somewhat limited by the availability of appropriate airport facilities
Airplanes
It is the fastest mode of transport and it is very flexible and cost effective
Electronic transport
It is the path through which products move and networks are composed of the collection of the paths that can facilities connected those paths
Route
Is the basis upon to which make decisions regarding the other four supply chain drivers
Information
It is the connection between all of the activities and operations in a supply chain to the extent that this connection is a strong one the company is supply chain will each be able to make good decisions for their own
Information
Information is used for two purposes in any supply chain and that is
Coordinating daily activities & forecasting and planning
The company’s in a supply chain is used available data on product supply and demand to decide on weekly production schedules inventory levels transportation routes and stocking location
Coordinating daily activities
Available information is used to make tactical forecast to guide the setting of monthly and quarterly production schedules and timetables
Forecasting and planning
Are organizations that make a product this includes companies that are producers of raw materials and companies that are producers of finished goods
Producers or manufacturers
Are organizations that mine for minerals drill for oil and gas and cut timber it also includes organization that form the land race animals or catch seafoods
Producers of raw materials
These are companies that use the raw materials and subassemblies made by other producers to create their products
Producers of finished goods
Are companies that take inventory in bulk from producers and deliver a bundle of related product lines to customers
Distributors
Distributors are also known as
Wholesalers
They typically sell to other businesses and they sell products in larger quantities than a individual consumer would usually buy
Distributors
Buffer the producers from fluctuations in demand by stocking inventory and doing much of the sales work to find the service customers
Distributors
They fulfill the “time and place” function - they deliver products when and where the customer wants them
Distributors
Is typically an organization that takes ownership of significant inventories of products that they buy from producers and sell to consumers
Distributor
It can also be an organization that only brokers a product between the producer and the customer and never takes ownership of that product
Distributor
They stuck inventory and sell in smaller quantities to the general public
Retailers
This organization also closely tracks the preferences and demands of the customers that it sells to
Retailers
It advertises to its customers and often uses some combinations of price product selection service and convenience as primary draw to attract customers for the product it sells
Retailers
Are any organization that purchases and uses a product
Customers or consumers
They may purchase a product in order to incorporate it into another product that they intern sell to other customers
Customer organization
Final end user of a product
Customer
These are organizations that provide services to producers distributors retailers and customers
Service providers
Three steps to align supply chain and business strategy
- Understand the requirements of your customers
- define core competencies and the rules your company will play to serve your customers
- develop supply chain capabilities to support the rules company has chosen
Is the total amount that buyers are willing to pay for firms products
Value
Is a tool developed by dr michael porter
Value chain
The difference between the total value or revenue and the total cost of performing all of the firms activities provides the…
Margin
It is concentrating on the activities starting with raw materials till the conversion into final goods or services
Value chain
Two categories of value chain
Primary activities
support activities
Value chain is categorized into types based on the type of organizations
Manufacturing based
service based
both manufacturing and service based
It is a tool used to identify sources of competitive advantage
Value chain
Represents the internal activities a firm engages in when transforming inputs into outputs
Value chain
Is a strategy tool used to analyze firms activities by recognizing which activities are the valuable to the firm and which one needs to be improved
Value chain analysis
Types of firm
Primary activities and support activities
Primary activities in supply chain
Inbound logistics
Operations
outbound logistics
marketing and sales
service
The receiving and warehousing of raw materials
Inbound logistics
Process of transforming inputs into finished goods and services
Operations
Warehousing a finished goods or distribution of those finished goods to customers for retail stores
Outbound logistics
The identification of customer needs and deploying product into marketplace and process of selling the customers
Marketing and sales
Supporting customers after they buy products and services
Service
Support activities in supply chain
Procurement
Technology development
Human resource management
Firm infrastructure
The purchasing of raw materials and inputs needed to create the product
Procurement
Activities associated with recruiting training hiring and compensation
Human resource management
Includes general and planning management legal finance accounting public affairs and quality management
Firm infrastructure
