Lecture 3 (2)

Question 1

product (demand) characteristics

Answer 1

Functional products have: Predictable demand, long product life, low inventory value, low product variety, high stock volume and low stock-out costs

Innovative products have: Unpredictable demand, short product life, high inventory value, high product variety, low volume and high stock-out costs

Question 2

manufacturing (supply) process characteristics

Answer 2

Stable manufacturing supply process has: Few breakdowns, high process yield, few quality problems, many supply sources, few process changes and is dependable in lead time

Evolving manufacturing supply process has: Higher breakdowns, lower process yield, more quality problems, few supply resources, many process changes and is difficult to predict in lead time

Question 3

Stable and functional manufacturing supply process characteristics

Answer 3

Efficient supply chain

e.g. grocery, basic apparel, food, oil and gas

Question 4

Stable and innovative manufacturing supply process characteristics

Answer 4

Responsive supply chain

Fashion apparel, low-end computers, seasonal products

Question 5

Evolving and functional manufacturing supply process characteristics

Answer 5

Risk-heding supply chain

E.g. Hydroelectric power, food dependent on weather

Question 6

Evolving and innovative manufacturing supply process characteristics

Answer 6

Agile supply chain

e.g. cell phones, high end computers, semiconductors

Question 7

Efficient (supply chain strategies)

Answer 7

Utilize strategies aimed at creating the highest cost efficiency

Non-value-added activities hsould be eliminated

scale economies are aimed

Optimization techniques are employed

Efficient, accurate and cost effective transmission of information is required

Question 8

Risk-hedging supply chains

Answer 8

Utilize strategies aimed at pooling and sharing resources in a supply chain to share risk

Common in retailing

Real-time information sharing allows most cost-effective management of goods between partners sharing the inventory

Question 9

Responsive supply chains (supply chain strategies)

Answer 9

utilize strategies aimed at being responsive and flexible

Built-to-order and mass customization processes are used

Question 10

Agile supply chains (supply chain strategies)

Answer 10

Utilize strategies aimed at being responsive and flexible to customer needs

Risks of supply shortages or disruptions are hedged by pooling inventory and other capacity resources

Combine the strength of hedged and responsive chains

Question 11

Outsourcing

Answer 11

moving some of a firms internal activities and decision responsibility to outside provider s

Not only the activities, but the resources that make that activity possible, go out of the company

Responsibility over certain elements is transferred as well

Allows a company to create a competitive advantage while reducing cost

An entire function may be outsourced, or some elements of an activity may be outsources, with the rest kept in-house

Identify a function as a potential outsourcing target, and then breaking that function into its components, allows decision makers to determine which activities are strategic and should remain in-house and which can be outsourced

Question 12

Reasons to outsource and benefits (financial)

Answer 12

Improve return on assets by reducing inventory and selling unnecessary assets

Generate cash by selling low-return entities

Gain access to new markets, particularly in developing countries

Reduce costs through lower cost structure

Turn fixed costs into variable costs

Question 13

Reaonsons to outsource and benefits (improvement)

Answer 13

Improve quality and productivity

Shorten cycle time

Obtain expertise, skills and technologies that are otherwise unavailable

Improve risk management

Improve credibility and image by associating with superior providers

Question 14

Reasons to outsource and benefits (organizational)

Answer 14

Improve effectiveness by focusing on what the firm does best

Increase felxidbility to meet changing demand for products and services

Increase product and service value by improving response to customer needs

Question 15

Logistics

Answer 15

Management functions taht support the complete cycle of material flow from the purchase and internal control of production materials; to the planning and control of work in process to the purchasing, shipping, and distribution of the finished product

Logistics providers have shifted from simply moving products from one point to another

Question 16

Logistics providers have shifted from simply moving products form one point to another

Answer 16

Trackings of shipements

Customer notification

Risk and variability reduction