Chapter 9 – Using Supply Chains to Create Value for Customers Flashcards
What is ‘Sourcing’?
The process of evaluating and hiring individual businesses to supply goods and services to your business
What is ‘Procurement?
The process of actually purchasing those goods and services
What is ‘Outsourcing’?
Outsourcing is the business practice of hiring a party outside a company to perform services or create goods
What is ‘Offshoring’?
Outsourcing work to companies abroad
What is ‘Nearshoring’?
Outsourcing of business processes to nearby countries (often sharing a border)
What is ‘Onshoring’?
Relocation of business processes to a lower-cost location inside national borders
What is ‘Insourcing’?
Where firms move activities back in-house
What are the cons of outsourcing?
- Loss of control: product quality, safety, technology
- Takes time for products to make their way back to the company and to consumers
What is ‘Social Responsibility?
The idea that companies should manage their businesses, not just to earn profits but to advance the well-being of society
What is ‘Environmental Sustainability?
The idea that firms should engage in business practices that have the least impact on the environment so that it’s sustained for future generations
What is ‘Demand Planning’?
Process of estimating how much of a good or service customers will buy from you
What is ‘Production Scheduling’?
The management of the resources, events, and processes needed to create an offering
What is ‘Lead Time’?
The amount of time it takes for a customer to receive a good or service once it’s been ordered
What is ‘Collaborative Planning Forecasting, and Replenishment (CPFR)’?
A practice whereby supply chain partners share information and coordinate their operations
What is ‘Supply Chain Visibility?
The ability to track individual components, sub-assemblies and final products as they travel from supplier to manufacturer to consumer
What is ‘Demand-planning Software’?
Can synthesize a variety of factors to better predict a firm’s demand
What is ‘Stockout’?
Occurs when you run out of a product a customer wants to buy
What is ‘Safety Stock’?
Backup inventory that serves as a buffer in case the demand for a product surges or the supply of it drops off for some reason
What is ‘Shrinkage’?
A term used to describe a reduction or loss in inventory due to shoplifting, employee theft, paperwork errors, or supplier fraud
What are the top reasons for inventory shrinkage?
- Damaged or expired items
- Miscounted inventory
- Employee theft
- Shoplifting
What is ‘Just-in-Time’ Inventory Systems?
Keep very little inventory on hand and contract with their suppliers to ship them inventory as they need
What is ‘Vendor Managed Inventory?
A supply chain agreement where the manufacturer or supplier takes control of the inventory management decisions for the seller or retailer
What is ‘Mass Customization?
A production system that allows customers to get their computers built exactly to their specifications
What are ‘Electronic Product Codes (EPC)’
Similar to a barcode but the number on it is unique
They make it possible to distinguish between two identical products
