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BUS M 200 > EXAM1 > Flashcards

EXAM1 Flashcards

1
Q

Difference between Supply Chain, Operations, and Supply Chain and Operations

A

Supply chain management

• Cooperation between different firms to create value for customers

Operations management

• Administration of transformation processes that create value for customers by meeting their needs or enabling them to meet their own needs

Supply Chain and Operations (SC&O)

• Emphasizes the linkages between firms that tie operations together with the goal of satisfying customers

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2
Q

Process design, management, control, and improvement

A

Processes

• Means by which all work is performed

Process Design

• Configuring inputs and resources in a way that provides value, enhances quality, and is productive

Process Management

• The act of executing and controlling the productive functions of a firm

Process Control

• The act of monitoring a process for its efficacy (Produce desired result), Process Improvement • Proactive effort to enhance process performance

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3
Q

Supply chain globalization strategies

A

Licensing – Sale of the same product with another trademark

Strategic Alliances – Forming business alliances with suppliers

Globalization – Establishing production and marketing facilities in foreign countries

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4
Q

Outsourcing and Nearsourcing

A

Outsourcing

• Process of moving the production of an item to another firm or producer

Nearsourcing

• Production of a component or product is moved geographically closer to where it was originally produced

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5
Q

Sustainability

A

Sustainability

• The proactive management of resources in an effort to be environmentally friendly

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6
Q

Difference between supply chain management and operations management

A

Supply Chain Management

• Multiple firms working together to create value

Operations Management

• Transformation of a single firm to create value

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7
Q

Primary flows of a supply chain

A

Upstream – Suppliers

Downstream – Consumers

Product Flows

  • Upstream to downstream
  • Reverse logistics – products move up the supply chain Monetary Flows
  • Downstream to upstream, unidirectional

Information Flows

• Bidirectional, data flows

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8
Q

Service supply chain complexity

A

Many upstream suppliers and downstream consumers

Many to many relationship

Customers are also suppliers

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9
Q

Combining supply chain and operations

A
  • Suppliers have transformation processes (operations) and the producing firm has transformation processes.
  • Transformative processes of upstream suppliers are tied by supply chain and logistics activities to producers who have the same
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10
Q

Impacting

A
  • Effectively managing core processes that affect customers
  • Managing core processes satisfy the customers
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11
Q

Improving

A
  • The act of making processes, products, and people better
  • A process, not a single event
  • Result of effective process management and design
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12
Q

Innovating

A
  • Large-scale, sudden improvement, that has a dramatic effect on business results
  • Incremental and continuous
  • Necessary for firms to compete effectively
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13
Q

Integrating

A
  • Collaboration and integration between all stakeholders in a supply chain
  • Includes suppliers, operations people planners, …
  • Results in streamlined communication, information sharing, and improved management outcomes
  • One of the best ways to manage complexity
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14
Q

Upstream vs Downstream Collaboration

A

Upstream – Strategic sourcing or purchasing, supplier selection and development, tco

Downstream – Customer relationship management

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15
Q

Porter’s Generic Strategies

A

Focus Strategy

  • Seek to service only select customers and provide these niche customers with a narrow range of unique products and services
  • Amazon

Differentiation Strategy

  • Seek to provide such distinctive products or services that competitors cannot compete with them
  • Apple

Cost

  • Seek ways to reduce costs and provide customers with lower prices than competitors
  • Walmart
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16
Q

Fischer’s Supply Chain Alignment Model

A

Efficient Supply Chains

• Functional Products (Mass produced toaster) Responsive

Supply Chains

• Interactive Products (Haircut)

17
Q

Agility and adaptability

A

Agility

• The ability of a supply chain to quickly respond to short-term changes in demand or supply

Adaptability

  • Capturing the value of long-term changes
  • Capability to adjust a supply chain’s design to meet major structural shifts in the market
18
Q

Order winners and qualifiers

A

Order Winner

  • Those attributes that differentiate a company’s products
  • How the firm wins orders

Order Qualifiers

• Those necessary attributes that allow a firm to enter into and compete in a market, and a firm’s strategy must account for these necessities

19
Q

Resource-based view

A

Competitive advantage come from applying tangible and intangible resources to operate effectively

Capabilities’ Four Core Aspects

  • Four specific aspects to capability that provide a company with a core competency
  • 1 – Value – valuable to customers
  • 2 – Rarity – competitive advantage because competitors cannot utilize these resources
  • 3 – Imitation-proof – resources that cannot be recreated or reverse engineered because of uniqueness
  • 4 – Substitution-proof – resources cannot be easily replaced
20
Q

Core competency

A

Core Competencies

• Hone only those capabilities that tie most closely to their customer values and that provide companies with a unique competitive advantage

21
Q

Reverse logistics

A

Reverse Logistics

  • The ability of a company to move product upstream while managing waste streams in an effort to reduce the cost of the waste stream or make the waste stream profitable
  • Reduction, reuse, and recycling
  • Reduction – elimination of waste before waste occurs
  • Reuse – reusing part or all of an object
  • Recycling – breaking down used items to reuse base materials
22
Q

Dynamic capabilities

A

Dynamic Capabilities and Retaining Value

  • Capabilities that win customers one day may not win the same customers the next day
  • Dynamic Capabilities – firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly change
23
Q

Types of relationships: transactional, complementary, synergistic

A

Transactional Relationships

  • Firm that pursues a cost advantage through its supply chain partners, to find the lowest-cost providers for supplies
  • Arm’s length, bidding

Complementary Relationships

  • Occurs when a company that clearly understands its core competencies needs another firm’s competencies so as to maintain world-class service
  • Combining core competencies

Synergistic Relationship

  • Relationship between two companies that are committed to work together in a way that the result is greater than the sum of the individual parts
  • Sum
24
Q

Calculate the “Economics of Purchasing” problem (pg 149-150)

A

Study

25
Q

Impact of quality on profitability

A

Higher Perceived Value

Increased Market Share

Lower Transformation and Defect Costs

26
Q

Portfolio approach to strategic sourcing o How to identify portfolio types o Recommended management strategies

A

Routine Items

  • Low value, purchased in small volumes, individual transactions
  • Automate the purchasing process, Simplify process

Leverage Items

  • Potential to affect profit, High level of expenditures while having many suppliers
  • Contract with suppliers to maximize commercial advantage

Bottleneck Items

  • There are few alternate sources of supply (complexity, new technologies, untested process) and low profit impact
  • Ensure supply, Search for alternatives

Critical Items

  • Big effect on profitability with few qualified suppliers
  • Form alliances and prepare contingency plans
27
Q

Portfolio Pic

A
28
Q

Strategic Cost Management

A

• Involves four types of analyses: spend analysis, price analysis, cost analysis, and total cost of ownership analysis

29
Q

Spend Analysis

A
  • Review of a firm’s entire set of purchases
  • Answers – What is the firm spending its money on?
  • Done at both aggregate and detailed levels
  • Spend is categorized as direct, indirect, and capital
  • Useful in categorizing purchases into the portfolio model quadrants

WHEN TO USE - What is the firm spending money on?

30
Q

Direct Spend Category

A

• Any material or service that is part of the final product

31
Q

Indirect Spend Category

A
  • All the spend that supports the operations of a firm
  • Everything from cafeteria services to spare parts for factory equipment
32
Q

Capital Spend

A

• All spend for buildings and large equipment anything that will be depreciated

33
Q

Spend Analysis can be used to Determine

A
  • If a firm received the correct number of products and services given, what if paid for them
  • Which suppliers received the majority of the business and if they charged an accurate price across divisions
  • If opportunities to combine volumes and spending for different business groups, standardize product requirements, reduce the number of suppliers, or take advantage of market conditions to receive better pricing
34
Q

Price analysis

A
  • Process of comparing supplier prices against one another or against external benchmarks
  • Useful when there are many suppliers, purchases categorized as either routine or commodities
  • Primary challenge – comparing items with the same specifications, quality levels, lead times, warranties, and so on
  • Common difference comes in payment terms
  • ITEMS MUST BE THE SAME

WHEN TO USE - comparing suppliers

35
Q

Cost analysis

A
  • Analyzing each of the individual cost elements that make up the final price
  • Use when price analysis is impractical or when price analysis alone does not allow a buyer to reach the conclusion that a price is fair and reasonable
  • Use when there are few alternatives to sources of supply (Bottleneck/Critical categories)

WHEN TO USE - you can’t use price analysis

36
Q

Total Cost of Ownership Analysis

A

Total Cost of Ownerships (TCO)

  • Combination of all costs involved in a product
  • To include all costs in your analysis of a purchase, not just purchase price
  • Applies to all the quadrants of the portfolio model

TCO Cost Categories

  • Acquisition Costs: identifying, selecting, ordering
  • Ownership Costs: quality and maintenance
  • Postownership Costs: customer’s use and disposition of the purchased item
37
Q

Calculate an effective price with differing payment windows (price analysis)

A
  1. Calculate difference in days
  2. Calculate daily cost of capital x%/365
  3. Days * Daily Cost * Price
  4. Price + 3
38
Q

Profit Margin

A

Net Income / Sales

BUS M 200 (2 decks)

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