Finals Flashcards
The objective of ________________ is to coordinate activities within the supply chain to maximize the supply chain’s competitive advantage and benefits to the ultimate consumer.
supply chain
management
Transfer traditional internal activities and resources to outside vendors
Outsourcing
Six Sourcing Strategies
▶ Many suppliers
▶ Few suppliers
▶ Vertical integration
▶ Joint ventures
▶ Keiretsu networks
▶ Virtual companies
Commonly used for commodity
products
Many Suppliers
Supplier is responsible for technology, expertise, forecasting, cost, quality, and delivery.
Many Suppliers
Purchasing is typically based on price while Suppliers compete with one another
Many Suppliers
Buyer forms longer term relationships with suppliers to create value through economies of scale and learning curve improvements.
Few Suppliers
Suppliers more willing to participate in JIT programs and contribute design and technological expertise.
Few Suppliers
Cost of changing suppliers is huge and contains trade secrets and other alliances.
Few Suppliers
Developing the ability to produce goods or service previously purchased.
Vertical Integration
Can improve cost, quality, and inventory but requires capital, managerial skills, and demand.
Vertical Integration
Risky in industries with rapid technological change.
Vertical Integration
Formal collaboration
▶ Enhance skills
▶ Secure supply
▶ Reduce costs
Joint Ventures
Cooperation without diluting brand or conceding competitive advantage.
Joint Ventures
A middle ground between few suppliers and vertical integration
Keiretsu Networks
Supplier becomes part of the company coalition and often provide financial support for suppliers through ownership or loans
Keiretsu Networks
Members expect long-term relationships and provide technical expertise and stable deliveries as it may extend through several levels of the supply chain
Keiretsu Networks
Fluid organizational boundaries that allow the creation of unique enterprises to meet changing market demands.
Virtual Companies
Relationships may be short- or long-term with an exceptionally lean performance, low capital investment, flexibility, and speed.
Virtual Companies
Supply Chain Risk
▶ More reliance on supply chains means more risk
▶ Fewer suppliers increase dependence
▶ Compounded by globalization and logistical complexity
▶ Vendor reliability and quality risks
▶ Political and currency risks
Risk and Mitigation Tactics
▶ Research and assess possible risks
▶ Innovative planning
▶ Reduce potential disruptions
▶ Prepare responses for negative events
▶ Flexible, secure supply chains
▶ Diversified supplier base
Occurs when orders are relayed through the supply chain increasing at each step.
Bullwhip Effect
Supplier Certification
Qualification
Education
Certification
to obtain efficient operations through the integration of all material acquisition, movement, and storage activities
Logistics Management
Allows competitive advantage to be gained through reduced costs and improved customer service
Logistics Management
Outsourcing logistics can reduce inventory, costs, and improve delivery reliability and speed
Third-Party Logistics (3PL)
