Global Supply Chains & Manufacturing - Concepts Flashcards
what is a supply chain
all stages involved, directly or indirectly in fulfilling a customer request
what are some of the processes included in a supply chain
supplying raw materials
manufacturing
transporting
storage
retail
product development
marketing
example of a supply chain where not all typical supply chain stages are involved
no retailer eg Amazon
can supply chains compete
yes - eg moving production
examples of supply chain risks presented in the news in recent times
covid = factories close down
suez canal block
brexit
where was the just in time philosophy originated from
Japan 1980s
what is the just in time philosophy
having products and raw materials arrive just as they are needed
what are the advantages of a just in time model
cheaper as costs money to hold inventory
what are the disadvantages of the just in time model
if one thing goes wrong there is a knock on effect
what is the overall objective of supply chains
to maximise overall value reated
what is the only source of revenue in the supply chain
customer
what are the costs in a supply chain
flows of information, products or funds between stages of supply chain
what is the purpose of supply chains
manage time lags e.g. historically only seasonal food, now we can import and grow off season
resolve issues of distance e.g. irish seafood exports to china
productivity based on quantity eg bulk food eg milk produced in bulk but consumed in portions
provide consumer with an assortment of choice eg supermarket
what does SKU stand for
stock keeping unit
what is vertical integration
successive stages in production and marketing all owned by a single organisation
what is forward integration
acquisition by a firm of it’s distribution chain moving closer to contact with customers
what is backward integration
acquisition by a firm of its supplier
Explain Michael Porter’s concept of a ‘Value Chain’
aims to disaggregate operations into primary activities and supporting activities
profits is a function of all the efficiency of the other activities
examples of food types that would be from wholesaler directly to retailer
artisen food
example of food types that would be directly to customer
catering
how is the traceability of food in a supply chain enabled
by technology
what are the 3 decision phases in supply chain
strategy + design
planning
opertation
how long could the strategy and design phases of a supply chain take
years
involves building factories, finding sights
how long could the planning phase of a supply chain take
1/4 to 1 year
includes optimising use of supply chain
how long could the operation phase of a supply chain take
daily/weekly
addressing problems as they arise by tweaking the supply chain
what are the two supply chain views
push and pull
cycle
what is a push/pull supply chain
processes are divided into 2 categories: push and pull
push = in anticipation of customer order
pull = in response to customer order
what is the cycle view
a supply chain is a series of cycles
manufacturing cycle
customer order cycle etc
what is the inventory / capacity trade off
there is a trade off between the amount of inventory you can store and having the capacity to produce
what is the chase/flexibility strategy for capacity
when demand increases, ramp up capacity
what is the level strategy of capacity
let inventory build up in anticipation of seasonal demand
eg Air Conditioning has higher demand in summer. Build when low demand, use inventory when high demand
what is the bullwhip effect
fluctuations in orders increase as they move up the supply chain
example of how bullwhip effect distorts demand information within the supply chain
VOLVO
- had excess inventory of eco friendly green cars as they weren’t selling well
- sales team were pushing to get rid of them by offering discounts
- manufacturing saw sales picked up so ramped up production of these cares
LACK OF COMMUNICATION
what portion of the supply chain gets bigger share of value
top
what is the concept of the smiling curve
high value activities occur on bottom and top of supply chain
bottom = research and development (costs a lot to do)
middle = assembly, offshored so low labour costs
top = marketing and e-commerce (wages)
how can a company increase their value in the supply chain
work with supplier
reposition on smiling curve
how is supply chain management increasingly becoming a strategic matter
want to mitigate risk
want to collaborate with customers and suppliers
to turn supply chain into value chain
what is a value chain
full range of activities that firms engage in to bring product from conception to end use
what is an in house value chain
everything done themselves from start to finish
what is offshoring
typically movemement of production activities to remote, low-cost countries
is offshoring intended for
- cost reduction
- market entry
cost reduction
when calculating cost benefits of offshoring, what should companies also consider
- increase in duration
- quality factors
- risk
