Lecture 2 (Supply Chain Drivers & Strategy)

Question 1

What is Amazon Supply Chain?

Answer 1

Service developed by amazon for its own products but it available to others as well, even if they are not selling their stuff to/on amazon.

Question 2

What strategies drive decision regarding supply chain management?

Answer 2

The main strategies driving these decisions are:
* Product Leadership
* Operational Execellence
* Customer Intimacy

Question 3

Briefly describe: Operational Excellence model

Answer 3

• Providing customers product/service with reliable, competitive price and minimum hassel.
• Seek efficiency
• Eg: Aldi, Toyota etc.
• Leader in Ecomm: Walmart

Question 4

Briefly describe Customer Intimacy Model

Answer 4

• Targetting markets and tailouring offers to meet the demands there.
• Cultivate Relationship with customers.
• Encourage Specific solutions
• Eg: Mercedez, AH XL etc.
• Leader in Ecomm: Amazon

Question 5

Briefly describe Product Leadership Model

Answer 5

• Leading edge products/services
• Think out of the box
• Take and manage risks
• creativity is key
• commercialise idea quickly
• Eg: Apple, Tesla, Nike etc
• Leader in Ecomm: Coolblue

Question 6

What is Supply Chain Strategy?

Answer 6

A coherent plan linking all supply, operations and delivery processes in a firm to the attributes of the products or services they produce and deliver.

Two functions:
1. Physical function: raw material -> product & services. Costs are: production, transportation, inventory, storage.
2. Mediation function: ensuring product variety matches cutomer wishes. Costs are: marketing and lost sales.

Question 7

What are Operational Efficiency supply chain aspects?

Answer 7

• Minimal cost and transport
• Minimise inventory
• Assortment rationalisation
• Out of stock isn’t main issue

Question 8

What is Customer Intimacy supply chain aspect?

Answer 8

• Reliable and Flexible supply chain
• Several delivery options
• Broad assortment
• Minimal out of stock

Question 9

What is Product Leadership supply chain aspects?

Answer 9

• Short lead time
• Fast charging assortment and short product lifecycle
• Potentially high stock of obsolete products.
• Changing supply chain partners

Question 10

What are the different types of supply chains?

Answer 10

• Efficient: Low cost, efficienct operations and planning
• Responsive: adaptive to changing demand pattern, increased speed & flexbility and high product quality.

Question 11

What are the two types of Products?

Answer 11

• Functional: low margin, basic need, stable demand
• Innovative: short lifecycle, variable demand and high margin

Question 12

Explain briefly the “Current Market Dynamic”

Answer 12

• Demanding customers
• Dependent on product type and phase in lifecycle
• Increasing product variety (mass customisation is the new)
• Shorter product lifecycles (reverse engineering is simple -> pushes for innovation)

Question 13

What is the Supply Chain Triangle?

Answer 13

• Companies struggle to balance: trade-offs are inherent and top managers all have different focuses.
• Detailed metrics derived can be used to measure impact on cash, service and cost (three points of triangle) -> simple KPI’s can be proposed

Question 14

What can be the KPI’s for cost, service and cash?

Answer 14

Cost: Cost of operations include warehousing, logistics, manufacturing, purchasing

Cash: how much working capital is required?

Service: What service is offereed? Includes: service level, lead time, reliability, order flexibility, product assortment etc.

Question 15

Notes on Supply Chain Driver (Remaining)