Lecture 2 Flashcards
What’s the value chain?
It’s about understanding a firms competitive advantage, competitive advantage is the ability to outperform rivals on the primary performance goal, porters framework distinguished between primary and support activities
Value chain analysis operates by disaggregate great the firms functions at board level and finer levels
What is porters framework?
Distinguishes between primary and support activities, improving each part to improve product for customer
What are the support activities of porters value chain?
Firm infrastructure, human resource management, technology development, procurement
What is firm infrastructure?
Includes general management, planning, finance, accounting, legal, government affairs and quality management.
What is human resource management?
Activities involved in the recruitment, hiring, training development and compensation of all types of personnel.
Affects competitive advantage in every firm through determining skills and motivation
What is technology development?
Every activity embodies technology
Technology may be involved in the product, or in the production and management of the product and associated processes
What is procurement?
Refers to the function of purchasing inputs used in the firms value chain, applies to raw materials and capital purchases
What are cost drivers associated with?
Improving value to the ultimate user
What are drivers of uniqueness associated with?
Making them fit the needs of the customer better
What is supply chain integration?
Alignment and interlinking of business processes
Embodies various communication channels and linkages within a supply network.
Integration is possible without collaboration
Integration is an enabler of collaboration
What is collaboration?
A relationship between supply chain partners developed over a period of time
Is dependant on the provision of mutual benefit, in supply chains mutual benefit between suppliers is difficult to achieve
Trust becomes an issue
What is a functional organisation?
All activities working along side each other
What is a matrix organisation?
All activities working along side each other, all concerned with different products
What is a product/process oriented organisation?
People involved in each product specifically associated with each activity
What is mode 1 of integration?
(internal integration). Within one organisation, trying to get activities to work better together
To integrate communications and informed systems to optimise there effectiveness and efficiency
Can be achieved by structuring the org and the implementation of information systems for improved communication and information sharing
Non-value adding activity are minimised, costs are reduced, lead times are reduced, service quality improved, functional silos are reduced
What is external integration?
EDI (electronic data interchange) is a key enabler of supply chain integration
It streamlines information sharing and processing
Effective and efficient organisational design is a prerequisite
Keiretsu : original equipment manufacturers work closely with their first tier suppliers to integrate manufacturing, logistics and information processes, which is passed upstream
Enables JIT
LEAN supply chain created
What is the prisoners dilemma?
Do you trust your partner to make the same decision as you?
What are the two dimensions of collaboration applied to transport management?
Learn diagram
What are the 3 supply chain collaboration methods and why do we need collaboration?
Supply base rationalisation, supply chain collaboration, aggregated procurement
Suppliers competing for the same order creates supply chain inefficiencies, this will drive down prices, unrealistic promises, lose their focus on service and quality
What is supply base rationalisation?
A response to market pressures
Suppliers who are not directly competing against each other for individual orders are more likely to collaborate
Easier for OEM to work with few selected suppliers
What is supplier development?
Can improve integration and collaboration (keiretsu)
Shift from thinking competitively to collaboratively
Enables integrated order processing application for aggregated procurement
What is aggregated procurement?
Specific suppliers selected based on capabilities
Each supplier gains a share of the total orders based on their ability to deliver on time and to specification
Overall supply base improves, reducing the likelihood of future rationalisation
What is CPFR?
Collaborative planning, forecasting and replenishment
Three modes: basic, developed and advanced
What is basic CPFR?
Limited number of business processes integrated between a limited number of supply chain partners
What is developed CPFR?
Involve a greater number of data exchanges between two partners, and may extend to suppliers taking responsibility for replenishment on behalf of the customer
What is advanced CPFR?
Goes beyond data exchanges to synchronise forecasting information systems and coordinate planning and replenishment process
What’s VMI?
Vendor managed inventory
An holistic view of inventory levels taken throughout the supply chain
A single point of control for all inventory management
A vendor manages stock replenishment at their facility
Enables supply to more accurately and precisely meet demand
What is inbound logistics?
Activity associated with receiving, storing and disseminating inputs to the product, such as material handling, warehousing, inventory control, vehicle scheduling and return to supplier
