GSCM2017 Flashcards
What are the eight ‘rights’ in logistics?
- right product
- in the right way
- in the right quantity
- and the right quality
- in the right place
- at the right time
- for the right customer
- at the right cost
What is the difference between outsourcing and offshoring?
Outsourcing: third party provider
Offshoring: transfer of specific processes to lower cost location in other countries (still own it)
What is back- and nearshoring?
Backshoring: move activities back to original home market
Nearshoring: move offshored activities to countries closer to home market
What are order-losing sensitive qualifiers?
Order qualifiers that are more critical than others in terms of the outsourcer’s requirements
How is the framework for evaluating potential outsources?
What are the four stages of outsourcer-outsourcee relationship?
- Master-servant stage: low cost is main driver
- Consultative stage: outsourcer consults with outsourcee on regular basis
- Peer-to-peer relationship stage: ideal stage, synergies, long-term, win-win
- Competitive stage: outsourcee takes the lead and starts competing with outsourcer
What are the four primary modes of integration within a supply chain?
- Internal
- Aim: integrate communication and information systems
- Backward (external)
- Forward (external)
- Forward and backward (rare) (external)
What is the difference between supply chain integration and collaboration?
Integration: alignment and interlinking of business processes
Collaboration: relationship between supply chain partners developed over a period of time
What is vertical and horizontal collaboration?
Vertical collaboration: between suppliers and customers (easiest)
Horizontal collaboration: between competitors and supply chain actors
What is the unionist view?
That logistics is part of the wider entity which is SCM (adopted by the book)
What is craft production?
Goods customised for individual customer needs
What is just-in-time (JIT)?
A system where inventory is pulled downstream through the system, which prevents stockpiling and inefficiency.
What are the seven key areas of the Toyota Production System (TPS)?
- Overproduction
- Waiting
- Transportation
- Inappropriate processing
- Unnecessary inventory
- Unnecessary motion
- Defects
What is MTS and MTO?
Made-to-stock (push + inefficient) and made-to-order (pull + Toyota)
What is an agile supply chain?
‘To a truly agile business demand volatility is not a problem; its processes and organisational structure as well as its supply chain relationship enable it to cope with whatever demands are placed upon it.’
In the above figure, the supply chain to the right is better able to cope with demand volatility, as it has more options in the second step to steer production towards another product.
Professor Christopher: ‘the ability to respond rapidly to unpredictable changes in demand’
What is postponement?
A production philosophy used for mass customisation, which involves the reconfiguration of product and process design so as to allow postponement of final product customisation as far downstream as possible
Also known as: ‘delayed product configuration’, ‘delayed product differentiation’ and ‘late stage customisation’
What is a stock-keeping unit (SKU)?
It is a unique version of a product in terms of size, packing, colour etc.
What are functional products?
- Predictable demand
- Long product life cycles
- Low variety
- Long lead times
Requires an efficient supply chain
What are innovative products?
- Unpredictable demand
- Short product life cycles
- High variety
- Short lead times
Requires a responsive supply chain
What is the taxonomy for selecting global supply chain strategies?
What is the bullwhip effect and what are the five causes?
When the inventory levels fluctuate along the supply chain, as small fluctuations in end customer demand result in amplification of demand upstream.
- Non-zero lead times
- Demand signal processing
- Order batching
- Price variation
- Rationing and gamin
What are the different types of simulation?
- Stochastic or deterministic
- Static or dynamic
- Discrete event and/or continuous
What is a stochastic and deterministic model?
Stochastic: Has a least one input variable that is random
Deterministic: has no random input variables
What is a static and dynamic model?
Static: do not include the passage of time (presents at a particular point in time)
Dynamic: includes the passage of time and represents systems as they change over time
What is a discrete and continuous simulation?
Discrete: changes occur at discrete points in time triggered by events (e.g. inventory)
Continuous: the state variables change continuously with respect to time and therefore observations are collected continuously (temperature)
What are the steps in a simulation process?
- Develop conceptual model
- Building the simulation model
- Verification and validation
- Design and run experiments
Who is the consignor and consignee?
Consignor: sends the consignment
Consignee: receive the consignment
What types of logistics service providers (LSP) exists?
- Hauliers or trucking companies: carry freight
- Freight forwarders/agents/brokers: travel agents (just arrange transport for goods and not people)
- Non-vessel-owning common carrier (NVOCC): companies who consolidate smaller shipments from various consignees into full container loads which the NVOCC then takes responsibility for (agent+principal)
- Couriers: immediate delivery of products
- Integrators: big companies like DHL, UPS, FedEx etc. Carries all the responsibility from consignor to consignee
What are the two common meanings of shipping?
- The act of sending freight from a consignor to consignee
- To move freight using the maritime method
What are 3PLs and what do they do?
Third-party logistics companies
They do for example:
- Transportation
- Warehousing
- Pick and pack
- Light manufacturing
- Vendor managed inventory
- Trade financing
- Managing reverse logistics
- Parts distribution
- Inventory management
What should a sourcing strategy as a minimum require?
- Level of spend being considered
- Risk
- One-off project or recurring procurement
- Market maturity
- Technology lifecycle of market
- Number of sources and potential suppliers
- Contract duration
- Potential for performance improvement and cost reduction
What is the Kraljik matrix?
What are the three components of value for money (VfM)?
- Acquisition costs
- Operating costs
- Disposal costs
What is the purchase price variance (PPV)?
A measure of the variance between the actual price paid versus the standard cost of the item. The standard cost of an item would be included in a bill of material (BoM) for a particular product and is used to calculate the product cost.
What is inventory turnover?
The higher the better
What are the two broad costs associated with inventory?
- Procuring the inventory
- Money spent to process a procurement order
- Money spent to actually buy the inventory
- Holding the inventory
What are the notations of inventory?
D: Annual use of a particular item, in number of items per year
S: Order-processing cost, in $/order
p: Price per item, in $/unit
H: Holding cost per unit per year, in $/unit/year
Q: Number of items ordered in one purchase order, in units
T: Time periods between purchase orders in fraction of a year
SS: Safety stock, in units
L: Lead time, in fraction of year
I: Current inventory on hand, units
TAC: Total annual cost
What are the total annual cost, TAC (of inventory)?
Total Annual Cost (TAC) = Purchase cost + Holding cost + Order-processing cost
TAC = pAD + (SS+Q/2)H + (D/Q)S
What is the economic order quantity?
The best order quantity which is the lowest cost balanced between order processing costs and inventory holding costs.
What is the reorder point (ROP)?
A predetermined level at which orders are issued when the inventory is depleted to that level.
ROP = D * L + SS
What is the periodic inventory control system?
A system where orders are reviewed periodically after the passage of a fixed time, T. Reorder at fixed time intervals (convenient).
What are the four strategies to manage and reduce inventory volumes?
- Centralisation
- Delayed product differentiation
- Part commonality
- Reduction of inventory transit
What are four key principles to reduce inventory holdings?
- Pooling
- Reduction in variation
- Reduction of lead time
- Following JIT principles
What are the four necessary core function in warehouse handling?
- Good receiving
- Put away into storage
- Order picking and packing
- Goods dispatch
What are the three warehouse layout examples?
- A straight flow operation
- A ‘U’ flow operation with conveyors
- An ‘L’ flow operation with conveyor
What are the four value adding activities of warehouse handling?
- Creating bulk consignments (transport economies)
- Breaking bulk consignments (transport economies)
- Combining freight (production postponement principle)
- Smoothing supply to meet demand (holding buffer stock to decouple lean production from the agile supply of goods to the market)
If none the freight requires none of those, then storage should be avoided (costly and non-value adding)
What are some of the order picking methods, and when are they most useful?
- Pick-to-order (low-volume operations)
- Batch picking (large-scale operations)
- Pick-to-zero/pick-by-line
- Zone picking/pick-and-pass
- Wave picking
- Picker-to-goods/goods-to-picker/automated picking
What are the two roles of information flows?
- Demand-side information (how much is demand, what specifications, etc.)
- Supply-side information (when will freight be delivered, etc.)
What are the key drivers of information technologies?
- Complexity
- Proliferation
- Diffusion
- Velocity
- Accuracy
What are the four barriers to information visibility and transparency?
- Cultural
- Financial
- Technical
- Organisational
What are dependent and independent demand?
Dependent: part of an order for multiple interrelated items (complete bicycle → bicycle pedals are demanded, but dependent on the order of the complete bicycle)
Independent: ordered independently of any other product (bicycle pedals)
What is Materials Requirements Planning (MRP)?
The tool for planning and controlling the manufacture and assembly of orders with dependent demand (push system + dependent demand) - software
What is MRPII?
Manufacturing Resource Planning which utilises the core functionality of MRP but integrates business function beyond manufacturing and logistics to include finance, procurement, marketing, sales, etc.
What is CPFR?
Collaborative planning, forecasting and replenishment.
CPFR fills the inter-organisational gap that ERP cannot, and is more than just a software application. It is a new collaborative method of scheduling logistics between suppliers and customers.
Time, complexity, scale and substantial investments are required, and are therefore constraints. Most often used by leading supermarkets and their top-suppliers.
What is VMI?
Vendor managed inventory.
It enables supply to more accurately and precisely meet demand, and thus avoid things such as the bullwhip effect.
Text 1: The Transport Geography of Logistics and Freight Distribution
A text about how supply chain / logistics have changed over the years from a view where transportation is considered a derived demand to where transportation is a component of integrated demand.
Text 2: The Supply-Chain Management Effect
How the topic has changed over the last couple of years. Focuses on 6 areas, where it states the old question, and then phrases the new question to be asked today instead.
Text 3: The Past Is Prologue
How supply chain management has developed as a discipline. Looks at each decade from 1950 till 2000. Blogpost written by an academic on a webpage.
Text 4: A Pain in the (Supply) Chain
HBR-case about ClickZip-Plus
Need to reach target-sales
Problem: do not know demand
Text 5: The New Basics of Supply Chain Management
What competencies does the supply chain manager of today need to possess in order to be successful?
Touches upon 6 areas:
- Leadership
- Diversity
- Sustainability
- Numbers people
- Relationships
- Strategy and planning
Text 6: We’re in This Together
A HBR case about Wendy’s and Tyson Foods that need to reestablish their relationship after it once failed. The text introduces a framework whereby the two firms meet for two days, in three sessions, and have a workshop about what kind of relationship they should have (Type I, II, III, or arm’s length). The framework consists of some parameters they need to assess before coming to a final conclusion.
Text 7: Global Supply Chain Management Style Depends on Company Size and Scale
Analysis about how integration and relationships with suppliers and customers depends on company size.
Text 9: Supply-Chain Culture Clashes in Europe
Difference between Japanese and Western companies/managers
Text 17: Control Your Inventory
How you can manage your inventory in different ways to get different results
ABC – stock classification system (10)
An inventory management system that separates out the most important inventory items so that more attention can be focused on those items
Activity-based costing (ABC) (13)
Where organisations examine in detail the activities they carry out in the production and delivery of a product, and subsequently identify a number of activities (for example number of orders processed, number of quality inspections or machine setups, and number of deliveries) which may be used to apply overhead to products more appropriately
Advanced shipment notification (ASN) (14)
Advance notification to a WMS of an arriving shipment
Aggregated procurement (3)
A method for selecting suppliers based on their capabilities rather than individual suppliers tendering for particular orders
Agile (4)
Ability to cope with volatility in demand
Air trucking (8)
Moving freight, which will be carried by air at some stage on its journey, by road (often air freight rates will be applied for the full journey)
Authorised Economic Operator (AEO) (7)
An EU voluntary security initiative which is designed to reflect the US C-TPAT security initiative
Automated guided vehicle (AGV) (11)
A mobile robot used to move materials between locations in a warehouse or factory
Automatic identification and data capture (AIDC) (12)
Technologies that automatically identify assets and freight, capturing specific data to enable traceability and security amongst other benefits
Backshoring (3)
Where a company abandons offshoring and moves the activities back to the original home market
Balance sheet (13)
A snapshot of the financial position of the organisation at that date and consisting of a list of assets and liabilities
Balanced scorecard (BSC) (13)
A tool which seeks to include other factors, and not just financial factors, in measuring organisation performance
Bill of lading (8)
A document that contains all of the key information in relation to a consignment being transported (referred to as an air waybill in air transport)
Buffer stock (10)
Also known as safety stock, it is inventory held in the event that unforeseen issues lead to insufficient inventory being available to meet demand
Bullwhip effect (4)
The distortion of orders along the supply chain, where small fluctuations in end customer demand result in amplification of demand upstream
Business continuity plan (BCP) (15)
A documented collection of procedures and information that is developed, compiled and maintained in readiness for use in an incident to enable an organisation to continue to deliver its critical products and services
Business process reengineering (BPR) (12)
A management technique commonly used to realign business processes with new technology implementations such as ERP
Carbon footprint (16)
A term that has come into use to describe the environmental disbenefits associated with economic activities such as the movement of freight
Cash flow statement (13)
Illustrates for an organisation where funds have come from and where the funds go to
Category managers (9)
Category managers manage a portfolio of contracts or category of spend with similar characteristics that can be grouped and considered in strategic terms in relationship to supplying across different business units or parts of an organisation
CFR (8)
Cost and freight
CIF (8)
Cost, insurance and freight
CIP (8)
Carriage and insurance paid
Collaboration (3)
A relationship between supply chain partners developed over a period of time
Consignee (8)
Recipient of a consignment
Consignment (1)
A shipment of freight which is passed on, usually to some type of logistics service provider, from a manufacturer or other source
Consignor (8)
Originator of a consignment
Consolidated shipment (8)
Where smaller shipments from various consignees are grouped into one single, full load
Container Security Initiative (CSI) (15)
The use of IT to pre-screen high-risk containers prior to their arrival at the destination port
Continuous simulation (5)
A type of simulation where state variables change continuously with respect to time and therefore observations are collected continuously
Contract manufacturer (3)
First tier suppliers who manufacture products for OEMs
Corporate social responsibility (CSR) (3)
A term used to refer to a multitude of activities and issues, and in essence concerns how ‘ethical’ a company’s activities are
Cost plus margin (14)
A charging mechanism used by 3PLs which incorporates actual incurred costs plus an agreed margin
Cost, volume, profit (CVP) analysis (13)
Identification of likely revenue, cost and profit at different levels of output
CPT (8)
Carriage paid to
Creeping crises (15)
Systemic supply chain disruptions that arise usually from unexpected sources and with widespread consequences
Cross-docking (11)
Transfer of inventory between two vehicles without the inventory going into storage
Customs-Trade Partnership Partnership Against Terrorism (CTPAT) (7)
A voluntary government–business initiative to build cooperative relationships that strengthen and improve overall international supply chain and US border security
DAF(8)
Delivered at frontier
DDP (8)
Delivered duty paid
DDU (8)
Delivered duty unpaid
Decoupling point (4)
The point in the production process at which the base product is customised to become the end product
Demand amplification (4)
The amplification of demand upstream in the supply chain, where downstream activities create fluctuations in demand, causing suppliers to overproduce
Dependent demand (12)
Products with dependent demand are part of an order for multiple interrelated items
DEQ (8)
Delivered ex quay
Deregulation (1)
Reduction/removal of various government-imposed barriers that hinder competition in markets
Derived demand (6)
The fact that people or freight do not travel for the sake of making a journey, they travel for some other reason
DES (8)
Delivered ex ship
Design for manufacture (DFM) (3)
Designing products that can be assembled or manufactured cheaply and efficiently
Deterministic models (5)
Simulation models that have no random input variables
Directional imbalances (2)
Mismatches in the volumes or types of freight moving in opposite directions in a freight market (leading to different freight rates being charged in opposite directions)
Discrete event simulation (5)
A type of simulation where state changes occur at discrete points in time as triggered by events; observations are then gathered at these points in time when changes occur
Distribution centre (DC)/regional distribution centre (RDC)/national distribution centre (NDC)/consolidation centre (CC) (6)
Terms used to describe different types of warehouses depending upon their particular role and geographic coverage
Downstream (1)
Customer end of the supply chain
Dropped delivery (14)
A consignment that is not delivered for any of a variety of reasons (e.g. insufficient address details or consignee not present)
Dynamic models (5)
Simulation models that include the passage of time and represent systems as they change over time
Economic order quantity (EOQ) (10)
That order quantity which seeks to balance two important sets of costs associated with inventory: the costs associated with ordering and receiving freight, and the costs associated with actually holding the freight
Electronic data interchange (EDI) (12)
Intercompany, computer-to-computer transmission of business data in a standard format
Electronic point of sale (EPOS) data (4)
Electronically available data that capture, usually real time, sales to customers
Enterprise resource planning (ERP) (12)
An enterprise-wide planning and control software package, which plans and controls all resources required from receipt of an order to delivery of freight
Environmental separation index (ESI) (3)
An index that measures the difference between the working environments of outsourcer and outsourcee companies
Ethnocentricity (2)
Thinking only in terms of the home country environment
External integration (3)
Integration of business processes across more than one organisation in the supply chain
EXW (8)
Ex-works
Factory gate pricing (FGP) (6)
The use of an ex-works price for a product plus the organisation and optimisation of transport by the purchaser to the point of delivery
FAS (8)
Free alongside ship
FCA (8)
Free carrier
FCL (6)
Full container load
Financial accounting (13)
Using the balance sheet, the profit and loss account and the cash flow statement, largely for reporting to and meeting the requirements of parties outside of the organisation
FOB (8)
Free on board
Food miles (16)
Term used to refer to the distance over which the various components of a particular food item have to travel before final consumption
Foreign direct investment (FDI) (2)
Financial flows from a company in one country to invest (e.g. in a factory) in another country
Fourth-party logistics (4PL®) (8)
Invented and trademarked by Accenture in 1996, who originally defined it ‘as a supply chain integrator that assembles and manages the resources, capabilities and technology of its own organisation, with those of complementary service providers, to deliver a comprehensive supply chain solution’
Freight tonne kilometre (FTK) (6)
Volume of freight measured in tonnes multiplied by the distance the freight travels measured in kilometres
Generalised costs (8)
A single, usually monetary, measure combining, generally in linear form, most of the important but disparate costs which form the overall opportunity costs of a trip
Geocentricity (2)
Acting completely independent of geography and adopting a global perspective
Globalisation (2)
An umbrella term for a complex series of economic, social, technological, cultural and political changes which continue to take place throughout the world
Glocalisation (2)
Thinking on a global, world market scale, but adapting to local wants as appropriate
Groupage (8)
The provision of freight transport using consolidated shipments
Horizontal collaboration (3)
Collaboration between suppliers who would conventionally be viewed as competitors
Humanitarian logistics (3)
Logistics to deliver humanitarian aid
Incoterms (8)
Abbreviation for international commercial terms that are now commonly accepted standards in global trade
Independent demand (12)
Products with independent demand are those that are ordered independently of any other products
Information visibility (12)
The ability to see information at the various points across the supply chain as and when required
Intermodal transport (6)
Where freight moves within a loading unit (known as an ITU – intermodal transport unit), this unit may move upon a number of different transport modes, but the freight remains within the unit at all times
Internal integration (3)
Integration between business functions within a single organisation
Intersectionist view (1)
Suggests that there is overlap between parts of both logistics and SCM, but also that each has parts that are separate and distinct
Inventory (10)
Any material that a firm holds in order to satisfy customer demand (and these customers may be internal and/or external to the firm)
Inventory turnover (10)
A measure of a firm’s performance in inventory management, which compares the annual sales a firm achieves with the amount of average inventory held throughout the year
ISPS Code (7)
The ISPS Code is a mandatory security initiative which came into force on 1 July 2004 and applies to all countries that are members of the International Maritime Organisation
Just-in-time (JIT) inventory management (4)
A production philosophy and set of techniques which has many components and principles, but at its core is the idea of making do with the minimum possible level of inventory holding. Inventory is thus kept to a minimum and replenished only as it is used
Key performance indicators (KPIs) (14)
Specific metrics used to monitor performance on an ongoing basis
Knowledge worker (12)
A knowledge worker is defined by Peter Drucker as someone who knows more than anyone else about their job role
Kraljik matrix (9)
A simple but powerful tool to understand and quantify relative value and procurement risk issues for any business or organisation
LCL (6)
Less than full container load
Lead time (10)
The time between placing an order and receiving inventory
Leagile supply chain (4)
A supply chain that combines both lean and agile logistics philosophies; sometimes referred to as a ‘hybrid strategy’
Lean (4)
Elimination of waste and ‘doing more with less’
Life-cycle costing/whole-life costing (13)
Determining the costs associated with a product or service over its entire life
Logistics (1)
The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements
Logistics service providers (LSPs) (8)
The various types of companies (hauliers, freight forwarders, etc.) that provide logistics services
Make-to-order (MTO) (4)
Producing product only to meet actual customer demand
Make-to-stock (MTS) (4)
Producing product which is subsequently put into storage
Management accounting (13)
The use of detailed internal information with which to manage the development of the enterprise on a more short-term basis, undertaken to ensure that the long-term financial management of the enterprise is on track
Manufacturing resource planning (MRPII) (12)
A planning and control software package, which plans and controls all manufacturing resources required to source, manufacture and deliver products
Mass customisation (4)
Customisation into various different finished products of what are often largely mass produced products
Material substitution (1)
Replacement of physical product by virtual product
Materials handling equipment (MHE) (11)
A term used to describe the various types of equipment for handling inventory
Materials requirements planning (MRP) (12)
A planning and control software package, which plans and controls the manufacture and assembly of products
Metric (14)
A measurement of an activity; specific important metrics are usually referred to as ‘key performance indicators’ (KPIs)
Multinational companies (MNCs) (2)
Companies with operations in areas beyond their home country
Nearshoring (3)
Where companies move their offshored activities to countries closer to their home market as a result of the potential risks and delays associated with moving products from a distant location
Non-vessel-owning common carrier (NVOCC) (8)
Refers to companies who consolidate smaller shipments from various consignees into full container loads which the NVOCC then takes responsibility for
Offshoring (2)
Offshoring is the transfer of specific processes to lower cost locations in other countries
Opportunity cost (10)
In the case of inventory management this is the amount of money the firm would have earned if the money were invested elsewhere other than in inventory
Order qualifiers (3)
Those criteria and/or performance expectations that a company must meet for a customer to even consider it as a possible supplier
Order winners (3)
One or more criteria that lead to the selection of a particular outsourcee by an outsourcing company
Order-losing sensitive qualifiers (3)
Order qualifiers that are more critical than other order qualifiers in terms of the outsourcer’s requirements
Original equipment manufacturer (OEM) (3)
Companies that produce final, branded products (with the components often produced by CMs)
Outsourcing (3)
Outsourcing involves the transfer to a third party of the management and delivery of a process previously performed by the company itself
Own-account transportation (8)
Where a company does not use an LSP to transport its freight, but instead transports the freight using its own vehicles
Polycentricity (2)
Adopting the host country perspective
Port centric (16)
The co-location of various logistics activities at a sea port rather than at inland locations
Postponement (4)
The reconfiguration of product and process design so as to allow postponement of final product customisation as far downstream as possible. Other names for this approach are simply ‘delayed product configuration’, ‘delayed product differentiation’, and ‘late stage customisation’
Procurement (9)
Procurement includes sourcing and purchasing and covers all of the activities from identifying potential suppliers through to delivery from supplier to the customer
Profit and loss account (13)
An account of the trading activity of the business for a defined period of time
Pull philosophy (4)
Materials are only produced and moved when they are required
Push philosophy (4)
Materials are produced according to a planned forecast (which may or may not be accurate) and moved to the next stage of the supply chain
Regional trade agreements (2)
Agreements between neighbouring countries that allow free trade between those countries
Re-labelling view (1)
Contends that logistics has been re-labelled by the more recent term SCM
Reorder point (10)
The inventory level at which an order for more inventory is placed
Resilience (15)
The ability of a system to return to its original (or desired) state after being disturbed
Reverse logistics (17)
The process in which a manufacturer systematically accepts previously shipped products or parts from the point of consumption for possible reuse, remanufacturing, recycling or disposal (with and without energy recovery)
Robust (15)
Used in a supply chain context to imply a strong or vigorous capability to for example manage regular fluctuations in demand
Safety stock (10)
See buffer stock
Sale and lease back (13)
The sale, usually for tax and other reasons, of valuable assets to financial intermediaries from whom the assets are subsequently leased back
Sarbanes–Oxley Act 2002 (SOX) (13)
Legislation enacted in the USA to improve the oversight of accounting and reporting practices
Service supply chain (18)
The network of suppliers, service providers, consumers and other supporting units that performs the functions of transaction of resources required to produce services; transformation of these resources into supporting and core services; and the delivery of these services to customers
Silo (4)
A term used to describe teams or business functions operating in isolation to others
Simulation (5)
The process of building a model and experimenting with it in order to develop insight into a system’s behaviour based on a specific set of inputs and assist in decision-making processes
Socio-technical systems (STS) (11)
A management philosophy that promotes: joint optimisation of the technical and social system; quality of work life; employee participation in system design; and semi-autonomous work groups
Static models (5)
Simulation models that do not include the passage of time and represent the system at a particular point of time
Stochastic models (5)
Simulation models that have at least one input variable that is random
Stock-keeping unit (SKU) (4)
A unique version in terms of size, packaging, etc. of a particular product type
Supplier development (3)
Activities led by buyers which seek to assist their suppliers in improving the services or products which their suppliers provide to them
Supply base rationalisation (3)
The process of reducing or rationalising the number of suppliers in a supply network, typically to reduce complexity and therefore cost
Supply chain (1)
The supply chain is the network of organisations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer
Supply chain Integration (3)
The alignment and interlinking of business processes
Supply chain knowledge management (12)
A term used to describe those knowledge management processes that span a supply chain
Tachograph (14)
A device typically fitted to a truck and used to record the speed of the truck, distance travelled and any breaks taken by the driver
Third-party logistics companies (3PLs) (8)
LSPs that provide multiple logistics services, often in an integrated fashion
Total landed costs (14)
The total costs associated with sourcing and receiving products from another location
Toyota Production System (TPS) (4)
A production system designed by Toyota to eliminate waste in seven key areas
Traditionalist view (1)
Regards SCM as a subset of logistics, as if it were an add-on to logistics
Transaction exposure (13)
Exposure to potential financial loss as a result of trading in another currency
Transfer price (13)
The value attributed to goods or services when they are transferred between divisions of the same company
Translation exposure (13)
Variation in asset value arising from currency fluctuations
Transnational corporations (TNCs) (2)
Companies that trade across many borders, with operations in multiple countries
Transport cost sensitivity (1)
The relationship of transport costs to freight value: high sensitivity implies minor changes in transport rates will have a major impact on transport choice decisions
Transportation model (6)
A model used to work out a minimum total transport cost solution for the number of units of a single commodity that should be transported from given suppliers to a number of destinations
Transportation model (6)
A model used to work out a minimum total transport cost solution for the number of units of a single commodity that should be transported from given suppliers to a number of destinations
Unionist view (1)
Logistics is seen as part of a wider entity, SCM
Upstream (1)
Supplier end of the supply chain
Value-adding activities (11)
Supply chain activities that enhance products to increase the customer’s perceptions of those products’ benefits
Vertical collaboration (3)
Collaboration between suppliers and customers along the supply chain
Vertical integration (1)
Ownership, or at least control, of upstream suppliers and downstream customers
Virtual organisations (3)
Companies which outsource most, if not all, major functions
Volumetric charging (6)
Charging for freight based on the dimensions of the consignment
Vulnerability (15)
The likelihood of a supply chain or logistics system being exposed to damage, disruption or failure
Warehouse management system (WMS) (11)
Software that manages materials and freight movement throughout the warehouse. This may interact directly with automated handling equipment or provide work instructions for operatives
