L4M1 - Scope and Influence of Procurement and Supply

Question 1

What is a tangible?

Answer 1

An item or product which you are able to touch, feel, and importantly, measure

Question 2

What is inventory?

Answer 2

Components, raw materials, work in progress, finished goods, and suppliers required for the creation of goods and services for the customer. It can also refer to the number of units of stock.

Question 3

What is the difference between purchasing and supply?

Answer 3

Purchasing is the act of physically ordering and buying something, whereas supply is the infrastructure which ensures that products or services get from the supplier to the customer.

Question 4

What is a supply chain?

Answer 4

A channel of goods distribution, which starts with the supplier of raw materials or components, moves through an operational process to the distributor and retailer, and finally to the consumer.

Question 5

Which industry sectors can the supply chain be found in?

Answer 5

Primary
Secondary
Tertiary

Question 6

What is the primary sector?

Answer 6

Industry sector that extracts raw materials e.g. mining, or drilling for oil

Question 7

What is the secondary sector?

Answer 7

Industry sector that manufactures things e.g. Oil refining into diesel, or furniture manufacturer

Question 8

What is the tertiary sector?

Answer 8

Industry sector that provides services, e.g. Insurance, or education

Question 9

What is ‘upstream’?

Answer 9

The supply flow of raw materials, components, parts, needed for production.

Question 10

What is ‘downstream’?

Answer 10

The supply chain that the organisation feeds into, from product to end user.

Question 11

What are the aims of SCM?

Answer 11

To reduce costs, improve value, and reduce risk.

Question 12

Where does value come from in the supply chain?

Answer 12

Value within the supply chain comes from the effective management of the following:
Price
Delivery
Storage
Ethics
Environment
Sustainability
Communication
Quality

Question 13

What are ethics?

Answer 13

Principles that govern a persons or organisation’s behaviour

Question 14

What is a Supply Chain Network (SCN)?

Answer 14

A supply chain network is an evolution of the basic supply chain, which defines the more complex structure, involving a higher level of interdependence and connectivity allowing a two-way exchange of information and materials to successful meet customer demands between more organisations both upstream and downstream.

Question 15

What is the difference between a supply chain and a supply chain network?

Answer 15

A supply chain maps out how raw materials are manufactured and delivered to the consumer, whereas the supply chain network would include all other parties in the process so manages physical and informational flows.

Question 16

What are physical flows in a SCN?

Answer 16

Physical flows include the movement and storage of materials and products. These are the tangible parts of the supply chain network.

Question 17

What are the information flows in a SCN?

Answer 17

Information flows include organisational strategies and the way that they are communicated, the control processes within the network and the standards to which the chain should work. Information flows two ways.

Question 18

That is the difference between procurement and SCM?

Answer 18

The fundamental difference between procurement and SCM is that the process of SCM continues until the end product reaches the consumer. The role of procurement could have needed long before this stage.

Question 19

What is tiering?

Answer 19

Tiering is the structured ordering and organisation of suppliers so that organisations downstream work with fewer supplier upstream.

Question 20

What is the supplier tier ranking?

Answer 20

T1= Supplies buyer directly
T2= Supplies T1
T3= Supplies T2
etc.

Question 21

What is the risk of supply chain tiering?

Answer 21

Buyers more susceptible to risk from T2 suppliers as they have less visibility and control over the supply chain.

Question 22

What is an original equipment manufacturer (OEM)?

Answer 22

The producer of own-branded parts or equipment which are sold to other manufacturers for production and retail.

Question 23

What is logistics?

Answer 23

Logistics is the process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods from the point of origin to the point of consumption for the purpose of conforming to customer requirments.

Question 24

What are 3 examples of internal logistics?

Answer 24

Extraction/Production
Manufacturing
Warehousing

Question 25

What are 3 examples of external logistics?

Answer 25

Distribution
Transport
Retail

Question 26

Which areas does logistics require to be managed?

Answer 26

Demand Planning
Fleet Management
Inventory Management
Warehousing
Order Fulfilment

Question 27

What is demand planning?

Answer 27

Demand planning is about knowing what’s required where and when. This is achieved by good communication with other organisations in the supply chain.

Question 28

What is fleet management?

Answer 28

This is a broad term covering the solution an organisation uses to physically transport goods. This can be an internal fleet or outsourced fleet.

Question 29

What is the benefit and negative of outsourcing your fleet of vehicles?

Answer 29

It can reduce costs but also reduced your control of the deliveries.

Question 30

What happens if there’s poor inventory management, warehousing, and order fulfilment?

Answer 30

When an inventory is managed ineffectively, involving poorly laid out warehouses and incorrect storage of products, the effects can be serious. If products cannot be found or are not in the right quantity, the distribution elements of logistics cannot happen and orders can be left unfulfilled This would mean the supply chain fails as the customer does not receive their goods.