Module1 Flashcards
What is the main topic of this course?
Strategic Supply Chain Management
- Focus: Managing flows of products, information, and funds
- Aim: Maximize total supply chain value
Name some major supply chain challenges in 2024.
- Inflation and material cost
- Unpredictable consumer demand
- Digital transformation
- Freight price increases
- Capacity constraints and port congestion
- Protectionism and political friction
Give an example of a major transport disruption.
Panama Canal (2023):
- Low water levels
- Ship congestion and restricted passage
- ~$205 billion economic disruption
Suez Canal (2021):
- ‘Ever Given’ stuck for days
- ~$60 billion economic disruption
How did the Red Sea attacks impact global trade?
- 12% of global trade normally passes through Suez Canal
- Houthi aerial attacks (Oct 2023) forced cargo diversions
- Ship traffic: -66% through the canal
- ~$1 trillion economic impact
What recent disruption happened in Switzerland?
- Gotthard Base Tunnel (freight derailment Aug 2023)
- Key route Germany–Switzerland–Italy
- Full reopening expected (Sep 2, 2024)
How many truck driver positions are unfilled globally?
- 3 million unfilled (2024)
- Across 36 countries
- Source: IRU, 2023 / Statista, 2024
What are strategic metals in the supply chain context?
- Metals critical to high-tech industries
- Often subject to supply constraints or political factors
- Example: Cobalt mined in DRC
Why is cobalt significant for the global battery supply chain?
- Cobalt is a key EV battery ingredient
- ~2/3 of global cobalt supply mined in DRC
- High value for electric mobility
What is ‘Kisanfu’ in the supply chain context?
- A cobalt and copper mine in DRC
- Operated by Chinese conglomerates
- Highlights supply chain concentration risk
What about artisanal mining in DRC?
- Artisanal miners often work under tough conditions
- Part of the global cobalt supply chain
- Raises ethical and sustainability concerns
How is policy influencing supply chain due diligence?
- Regulations (e.g. German Act on Due Diligence) enforce supply chain audits
- Carbon border adjustments to reduce carbon leakage
- Governments increasing compliance requirements
How do supply chain challenges manifest at various levels?
- Individual (workers, consumers)
- Firm (operations, finances)
- Industry (competition)
- National economy (trade, GDP)
- Global economy (geopolitics, interconnectedness)
What is the ‘extended enterprise’ or stakeholder view?
- Firms are interdependent with employees, customers, investors, communities
- Not just simple contractual exchanges
- Network effects matter
Name the typical stages in a supply chain.
- Suppliers (Tier 1…n)
- Manufacturer (focal firm)
- Intermediaries (distributors, integrators)
- Customers (wholesale, retail, end user)
Which flows exist across supply chain stages?
- Product (or materials) flow
- Information flow
- Funds flow
- Intellectual property flow
- Move in both directions
What is the SCOR model?
- Supply Chain Operations Reference model
- Five processes: Plan, Source, Make, Deliver, Return
- Common framework to map and measure supply chain performance
Explain the cycle view of supply chains.
- Each cycle at the interface between two stages
- Customer order, replenishment, manufacturing, purchasing cycles
- Clarifies processes and responsibilities
What is the push/pull view of supply chains?
- Push: Execute in anticipation of customer orders
- Pull: Execute in response to customer orders
- Push-pull boundary (OPP) separates speculation from reaction
Define the order penetration point (OPP).
- The stage where customer order triggers final operations
- Upstream is forecast-driven (push)
- Downstream is order-driven (pull)
Name the key manufacturing strategies (MTS, ATO, MTO, ETO).
- Make to Stock (MTS): Build based on forecast
- Assemble to Order (ATO): Final assembly after order
- Make to Order (MTO): Production starts after order
- Engineer to Order (ETO): Design and produce after order
What is postponement in supply chain?
- Delaying product differentiation until late in process
- Keeps product generic (‘vanilla’) as long as possible
- Reduces inventory risk, improves flexibility
Give an example of postponement (HP Printers).
- Re-designed printers shipped to Europe
- Power supply & manual added locally
- Reduced total costs by ~25%
What are the four phases of supply chain management?
- Design the supply chain
- Plan the supply chain
- Operate (execute) the supply chain
- Control (measure) the supply chain
What happens in supply chain design (strategy)?
- Long-term structural decisions
- Align with competitive strategy
- Examples: facility locations, capacity, transportation modes
What characterizes supply chain planning?
- Medium-term (weeks, months)
- Based on demand forecasts
- Decide on inventory policies, subcontracting, routing
What does supply chain operation (execution) involve?
- Short-term (days, weeks)
- Process individual orders
- Scheduling, replenishment, order allocation
Why is supply chain control (measurement) important?
- You can’t improve what you don’t measure
- Monitors performance vs. objectives
- Guides corrective actions
Give a common definition of supply chain management (SCM).
- Managing product, information, and fund flows
- Coordinating assets across the chain
- Aim: Grow total surplus (Chopra/Meindl)
What is the overarching goal of SCM?
- Maximize overall profit/value in the chain
- Generate customer value while controlling costs
- Profit = revenues – total supply chain costs
Name some operational SCM performance measures.
- Time (lead time, order cycle)
- Cost (production, logistics)
- Quality
- Sustainability factors
List a few frequently used supply chain KPIs.
- Order Accuracy Rate
- On-Time Delivery
- Inventory Turnover
- Order Cycle Time
Why expand operational to financial SCM measures?
- Board cares about ROI, profit, stock price
- Show bottom-line impact of SCM
- Connects supply chain to shareholder value
Mention key trends driving supply chain management.
- Demographic shifts
- Economic change & protectionism
- Volatility and risk
- Sustainability pressures
- Innovation in supply chain
- Digitalization & AI
How are CEOs addressing supply chain shocks in 2024?
- 87% see resiliency issues
- Right shoring (onshore, nearshore, friendshore)
- 99% considering or using AI
- Barrier to decarbonization is complexity
Give an example of a CEO with strong supply chain background.
- Tim Cook (Apple): Pared back suppliers, hates excess inventory
- Prior role: Global operations at Apple
- Achieved massive growth and efficiency
