Exam 1 Flashcards
Supply chain
A supply chain is a collection of entities, which are working together. Consists of all parties involved, directly or indirectly, in fulfilling a customer’s request.
Supply chain management
The management of upstream and downstream relationships with suppliers and customers to deliver greater/higher customer value at less cost to the supply chain as a whole.
Logistics
An orientation and framework that seeks to plan the flow of goods, info., and services to achieve cost effective fulfillment of orders.
What is Supply chain surplus?
Total revenue from customers (-) Total costs across the Supply chain. What profit is to an organization.
Arms Length Relationship
Arm length relationships are not good for business. Each party does not owe any obligation to the other and solely works on the benefit of their own company.
Difference between Marketing channels and supply chain
Marketing channel is a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer. A supply chain is the connected chain of all business entities both internal and external, that perform or support the logistics function.
What is competitive advantage? Two ways you can achieve it?
A position of enduring superiority over competitors in terms of customer preference. Cost and value advantage.
Two ways you can achieve cost advantage?
Economies of scale enables fixed costs wider and variable costs lower. Experience curve is having a strong market share, better and smarter.
How do firms obtain a value advantage?
Firms can add value by differentiation of products, image of the company, and service the firm provides.
What is a commodity?
A product that is widely available, has small profit margins, and has price as the primary factor.
Mature Market
Firms have been in the market a long time, experience has increased their market share.
Goal of logistics and SCM?
The goal is to link the marketplace, the distribution network, the manufacturing process and the procurement activity in such a way that customers are serviced at higher levels and yet at a lower cost.
Value Chain?
Michael porter created a term to depict all of a firm’s discreet activities that the firm performs in designing, producing, marketing, delivering, and supporting its producers.
Per value chain, What is the recommendation to achieve a competitive advantage in the market place?
Recommendation is to focus on the function they do best and outsource the rest.
New rules of competition
Supply chain competition, commoditization, consolidation of demand (demand is consolidated into big chunks), reduction of reliable supplier base, and shorter life cycles.
Why is there a pressure on prices?
Removal of trade barriers, globalization, overcapacity, internet, and value conscious customers.
Marketing and manufacturing can be in conflict because?
Marketing wants to add value in certain areas that manufacturing cannot make due to reasons around engineering and cost. EOS vs variety, set up cost vs high service levels, and standardization vs product change.
Vertical Integration?
Vertical integration is a firm performing all aspects of supply chain and business. Complete control over the process. Cannot be an expert at all aspects of supply chain. You can gain control of your business if very good at it.
