Midterm Flashcards
Economic Utility and Customer Needs
Understanding Economic Utility
Economic utility refers to the value or usefulness of a product in fulfilling customer needs and wants
impacting purchasing decisions.
It encompasses various forms of utility: form
time
Example: A product that is available at the right time and place enhances its utility
making it more appealing to consumers.
Customized Customer Offerings
The concept of a customized customer signifies the demand for tailored products that meet specific preferences.
Mass customization allows companies to deliver highly personalized products
enhancing customer satisfaction and loyalty.
Case Study: Nike’s ‘Nike By You’ program enables customers to design their own shoes
exemplifying mass customization.
Logistics Strategies and Approaches
Mass Logistics vs. Omnichannel Retailing
Mass logistics is a uniform approach where all customers receive the same level of service
which may not meet individual needs.
Omnichannel retailing integrates multiple sales channels
providing a seamless shopping experience across platforms (online
Example: Target’s omnichannel strategy allows customers to order online and pick up in-store
enhancing convenience.
Fragmented vs. Centralized Logistics
Fragmented logistics involves dividing logistics activities among various departments
potentially leading to inefficiencies.
Centralized logistics consolidates all logistics functions under one department
improving coordination and efficiency.
Pros and cons of each approach should be evaluated based on company size and operational complexity.
Technology in Logistics Management
Communication Systems and EDI
Effective communication systems are crucial for collaboration among stakeholders (employees
suppliers
EDI (Electronic Data Interchange) facilitates seamless data transmission
enhancing supply chain coordination.
Common EDI applications include invoicing
purchase orders
Warehouse Management Systems (WMS) and ERP
WMS software oversees storage and flow of materials
controlling inventory management and order processes.
ERP (Enterprise Resource Planning) systems integrate business processes
providing real-time data across functions.
Example: SAP ERP systems help companies automate and integrate their operations
improving efficiency.
Challenges and Solutions in Logistics
Addressing Pilferage and Productivity
Pilferage
or employee theft
Strategies to mitigate pilferage include implementing a zero-tolerance policy and enhancing security measures.
Productivity can be improved by reducing input while maintaining output
increasing output
Lean Six Sigma in Logistics
Lean Six Sigma combines quality improvement and efficiency strategies to enhance operational performance.
It emphasizes the importance of balancing quality and speed in logistics processes.
Companies adopting Lean Six Sigma report improved customer satisfaction and reduced operational costs.
Logistics Frameworks and Models
SCOR Model Overview
The SCOR Model identifies six key processes in supply chain management: Plan
Source
Each process plays a critical role in ensuring efficient supply chain operations and meeting customer demands.
Example: The ‘Plan’ process involves balancing demand and supply to develop effective sourcing and production strategies.
Importance of Logistics Service Quality
Logistics service quality is essential for delivering products without defects or errors
impacting customer satisfaction.
Companies must focus on improving logistics service quality to maintain competitive advantage.
Metrics for assessing logistics service quality include delivery accuracy
order fulfillment speed
Pilferage Management
Understanding Pilferage
Pilferage refers to the theft of goods
particularly in transportation and warehousing operations
Effective management of pilferage begins with the hiring process
ensuring that employees are trustworthy and reliable.
Implementing a zero-tolerance policy towards pilferage can deter potential theft and promote a culture of integrity.
Keeping goods moving through the supply chain reduces the opportunity for theft
as stagnant inventory is more susceptible to pilferage.
The recent increase in pirate attacks highlights the need for enhanced security measures in logistics operations.
Developing a comprehensive policy that addresses group dynamics can further minimize opportunities for pilferage.
Strategies to Combat Pilferage
Regular audits and inventory checks can help identify discrepancies and deter theft.
Employee training programs focused on ethics and the importance of security can foster a culture of accountability.
Utilizing technology such as surveillance cameras and RFID tracking can enhance monitoring of goods in transit and storage.
Establishing clear reporting procedures for suspicious activities encourages employees to take an active role in preventing theft.
Collaborating with law enforcement and security experts can provide additional resources and strategies to combat pilferage.
Creating a reward system for employees who report theft or suspicious behavior can incentivize vigilance.
Warehouse Operations and Dock Door Types
Importance of Dock Door Selection
The choice of dock door is crucial and should align with the specific needs of the warehouse
including size and frequency of use.
Common types of dock doors include sectional overhead doors
commercial roll-up doors
Sectional overhead doors are ideal for high-traffic areas due to their durability and space-saving design.
Commercial roll-up doors offer quick access and are often used in environments requiring frequent opening and closing.
Swinging dock doors provide a wide opening but may require more space and are less common in modern warehouses.
Safety considerations for employees and customers should be a priority when selecting dock doors.
Supply Chain Management Concepts
SCOR Model Overview
The SCOR Model identifies six key processes in supply chain management: Plan
Source
‘Plan’ involves balancing demand and supply to create actionable strategies for sourcing and production.
‘Source’ focuses on procuring goods and services to meet demand
ensuring quality and reliability.
‘Make’ refers to the transformation of raw materials into finished products
emphasizing efficiency and quality control.
‘Deliver’ encompasses the logistics of providing finished goods to customers
including order and transportation management.
‘Return’ deals with the processes for handling returns and post-delivery support
ensuring customer satisfaction.
Agile Supply Chain
An agile supply chain is characterized by its ability to quickly respond to changes in demand
both in volume and variety.
Organizations that fail to maintain agility risk losing market share and profitability
as well as facing customer dissatisfaction.
Key strategies for enhancing agility include flexible manufacturing processes and responsive logistics systems.
Real-time data analytics can support agile decision-making by providing insights into market trends and customer preferences.
Collaboration with suppliers and partners can enhance responsiveness and adaptability in the supply chain.
Continuous improvement practices are essential for maintaining agility in a dynamic market environment.
Procurement and Supplier Management
Procurement Processes
Procurement involves acquiring raw materials
parts
A strategic approach to procurement can lead to reduced cycle times and improved product development collaboration.
The procurement manager plays a critical role in aligning purchasing strategies with organizational goals and market demands.
Effective supplier management includes selecting
developing
Supplier development initiatives
such as reverse marketing
Ethical procurement practices are essential to avoid issues such as bribery and ensure compliance with regulations.
Supplier Selection Process
The supplier selection process begins with identifying the organization’s needs
which involves defining requirements and expectations.
Establishing evaluation criteria is crucial for objectively assessing potential suppliers
considering factors like quality
Screening suppliers through market research and reference checks helps pre-qualify candidates for further evaluation.
Requests for Proposals (RFPs) are solicited from top candidates
detailing project scope
Evaluating and selecting suppliers involves scoring proposals based on predefined metrics to ensure the best fit for the organization.
Auditing supplier sites is a critical step to verify capabilities and quality control measures before finalizing partnerships.
