Operations, Strategies Flashcards
Supply Chain Management
Integrating and managing the flow of supplies throughout the inputs, transformation process and outputs in order to best meet the needs of the customers.
Flow of material inputs through the value stream (SCM)
Suppliers (purchasing supplies and locating inputs)
Internal processes (transformation stage)
distribution to customer (transporting and organising products to customers)
Three aspects to supply chain management
Logistics, E-commerce, Global Sourcing
Logistics definition (SCM)
The transport, storage and handling of physical raw inputs and the distribution of physical outputs to markets.
Goal of logistics (SCM)
To achieve an efficient steady flow of material throughout the supply chain.
Role of logistics (SCM)
To have ‘the right quantity at the right time at the right place for the right price in the right condition to the right customer’.
Distribution (SCM)
Different types of transportation such as ships, train, plane, van, etc.
Warehousing (SCM)
The use of warehouses for the storage, protection and later distribution of stock
Storage (SCM)
Finding a secure place to hold stock until it is required and meets the demands of the business. May be short term or long term.
Distribution Centres (SCM)
Not for long term storage but are designed to minimise the time it takes to supply stock to the retail outlets.
Lead Time (SCM)
The time it takes for an order to be fulfilled from the moment it is made.
Costs associated with Logistics
The premises, insurance and security, moving stock, carrying excess stock if not sold, shrinkage costs and losses, stock subject to damage.
E-Commerce (SCM)
The buying and selling of goods and services via the internet.
E-procurement (SCM)
The use of online systems to manage supply and allows suppliers direct access to the business’s level of supplies.
B2B (SCM)
Direct access from one business (supplier) to another (the buyer), allowing the supplier to assess the needs of the buyer and meet them in a timely manner.
B2C (SCM)
The selling of goods and services to consumers over the internet, with payment usually by credit card.
Global Sourcing (SCM)
Buying or sourcing from wherever the suppliers are that best meets the sourcing requirements.
Factors influencing the choice of supplier (SCM)
Consumer demand, quality of inputs required, flexibility and timeliness of supply, cost of supplier.
Outsourcing
the use if specialised external providers to perform non-core business activities.
Advantages of outsourcing
Allows the business to focus on its core business, tasks are performed at a higher level, efficiency gains and cost reductions.
Disadvantages of outsourcing
Less control over the quality, more expensive in some cases, communication and language barriers, loss of information/critical patents/financial details, and organisational change and resistance.
Globalisation and outsourcing
- Market conditions can change which may cause a change in the cost of materials and other inputs.
- Opportunity to outsource to an overseas supplier, known as offshoring.
Factors that must be considered (Outsourcing)
Whether outsourcing is cheaper and more efficient, which geographical location is preferred, which vendors to use, management of the outsourcing contract.
Co-sourcing (Outsourcing)
Two parties are fully involved in managing the success of the particular aspect of the business. Work is not done by an external party but an external expert who works as a contractor.
