Questions

Question 1

What is the bullwhip effect?

Answer 1

1. The bullwhip effect is a distribution channel phenomenon which forecasts yield supply chain inefficiencies
2. Variation in demand is exaggerated as information moves upstream away from the point of use
3. Variation in demand is exaggerated due to infrequent demand and/or inventory level information exchange and order batching
4. Bullwhip effect costs can be as high as 12 to 25%

Question 2

How can the bullwhip effect be mitigated?

Answer 2

1. Sharing point of sale data
2. Collaborative forecasting
3. Collaborative future product promotion planning

Question 3

Describe the different steps of an apple along the supply chain and potential sources for waste/losses?

Answer 3

1. Growing/Harvesting: Supermarkets demand perfect fruit (rest goes to garbage)
2. Inland transport: Fruit wrongly packed, underdeveloped infrastructure (potholes), wrong handling of refrigeration system
3. Loading at the port: Loading takes longer than nessecary, delayed depature of the ship
4. Sea transport: Filthy, damped or damaged reefer containers, wrong storage temprature
5. Unloading and distribution: No sorting upon arrival, traffic jams, high humidity in the trucks
6. Retail: Hard to accuratly plan consumption, overstocking (shelfs are expected to be full), further elimination of imperfect fruit
7. Consumption: Unnecessary purchase, ignorance of stocks, wrong storage

Question 4

Describe the raltional rents (benefits of patnerships) for the partnership members?

Answer 4

1. Increase of sales, reduction of costs
2. Large investments are possible
3. Risks are shared among partners.
4. Sharing of technology, capital and knowledge = larger potential for process innovation
5. Reduction of product losses in transportation and storage

Question 5

Describe the raltional rents (benefits of patnerships) for the society at large?

Answer 5

1. Consumer-driven pro- duction and distribution
2. Higher product safety and quality through increased supply transparency (tracking & tracing) –> less risks for consumers
3. More sustainable economic structures

Question 6

What are business partnerships and what are potential relational risks?

Answer 6

1. It is a framework (organisational structure) for improved communication and coordination in business transactions
2. If it is not managed well, it can result in bureaucracy, inflexibility and free-rider problems

Question 7

What types of patnerships are there?

Answer 7

1. Alliance

• Sustained long-term partnerships, trust and shared understanding
• Tight and coordinated relations

2. Coalition

• Formal joint working for a single issue
• More intense and structured relations

3. Network

• Informal, information sharing, mutual support
• Loose relations

Question 8

What are the different types of alliances?

Answer 8

Question 9

What is the collaborative advantage?

Answer 9

• Value which is created in idiosyncratic relationships which is above and beyond to what a market buyer-seller exchange can generate
• It is the competitive advantage of partnerships, due to:

1. investments in relationship-specific assets
2. substantial knowledge exchange including the exchange of knowledge that results in joint learning
3. the combination of complementary, resources or capabilities (typically through multiple functional interfaces) which results in the joint creation of unique new products, services, or technologies.
4. lower transaction costs than competitor alliances, owing to more efficient safeguard mechanisms (e.g., trust).

Question 10

Why do 70 percent of enterprise collaborations fail?

Answer 10

• Inability to achieve synergies regarding:

1. Strategy – different goals
2. Operations – different management styles
3. Culture – different ways of doing things
4. Commercialisation – different ways of dealing with customers

Question 11

What is effective communication?

Answer 11

High information quality

1. Relevant (Information is useful and significant)
2. Complete (No important piece is missing)
3. Reliable (Information can be trusted)
4. Accurate (Clear and precise formulation and transmission)
5. Consistent (Free of contradiction)

Adequate transmission frequency

1. Timely (Information transmission occurs in time – i.e., when it is needed)
2. Avoids information overload (Meaningless communication is to be avoided)

Question 12

How to improve inter-enterprise relationships?

Answer 12

1. Improve communication- Both the quality and the frequency of the transmitted information are important
2. Build personal relationships where possible, in particular when you deal with farmers
3. Make sure to retain key staff- When they leave, buyer/supplier relationships are likely to suffer
4. Be aware of unequal power distribution between business partners. It can negatively impact on the goodness of B2B relationships

Question 13

What are potential benefits of sharing information?

Answer 13

Information sharing helps companies:

1. Reduce costs
2. Improve customer service levels
3. Reduce lead times
4. Improve profitability
5. Increase quality levels
6. Enhance innovation
7. Enables process redesign and reengineering
8. Enables constant improvement and learning

Question 14

What information should be shared?

Answer 14

At a minimum, companies should share:

1. Sales data and sales forecast
2. Inventory levels
3. Order status for tracking/tracing
4. Performance metrics
5. Capacity and capability information

Question 15

When should information be shared?

Answer 15

• Most companies share information during the late growth and maturity phases of the product life cycle
• BUT increased information sharing during the design/introduction and decline phases could have a greater impact.

1. Design – early supplier involvement
2. Introduction – improved forecast accuracy
3. Decline – avoidance of obsolete inventory

Question 16

With who should information be shared?

Answer 16

There are two approaches to information sharing:

1. Bow-Tie Approach – allows sales and purchasing to be the primary conduit of information with the external environment
2. Diamond Approach – creates many points of contact and potential sources of integration and collaboration between organizations

Question 17

What are the challenges for sharing information?

Answer 17

1. Weak or counterproductive relationships
2. People
3. Power
4. Trust
5. Security and risk
6. Too much information
7. Lack of standards
8. Inaccurate information

Question 18

What is tracability?

Answer 18

• According to EU regulation “traceability” means the ability to trace the origin of food, feed, animals for human consumption and other eatable substances trough all stages/tiers of production, processing and distribution.
• Internal vs. External traceability

Question 19

Why should we make use of traceability systems?traceability

Answer 19

• To increase food safety through the ability to rapidly identify and to remove contaminated and spoilt food stuffs and other substances from the food supply chain

Question 20

What should be traced?

Answer 20

• A product or traded good (e.g., carton, consumption unit), a logistical unit (e.g., a pallet or container), a delivery or movement of a product or traded good
• Agreement needs to be reached between trading partners. Otherwise, the information chain is interrupted
• All traced units must be individually identified and this information must be made available to all supply chain partners.
• All member of a supply chain must collect and document/store their relevant information together with the one of one tier upstream and one tier downstream.

Question 21

What is reputation?

Answer 21

Reputation is

1. an opinion about individual people or organizations, or groups of them, as a result of social evaluation
2. a component of identity as defined by others
3. a mechanism of social control in societies
4. Reputation facilitates decisions and helps to make economic transactions more efficient
5. For organizations reputation belongs to the intangible assets such as patents and brand name rights
6. For people reputation is part of their social capital

Question 22

What are different aspects of reputation and who determines them?

Answer 22

1. product quality
2. brand value
3. customer orientations
4. working conditions
5. innovation strength
6. environmental orientation

• customers, suppliers, employees, money lenders/investors, general public…

Question 23

What´s the difference between image and reputation?

Answer 23

1. Image = how do I present myself?

• Lies in the hands of the presenter
• is short-term, elusive, adjustable

2. Reputation = what do others say about me?

• Lies in the hands of others
• s long-term and more difficult to influence

Question 24

What are different innovation strategies?

Answer 24

1. Transformational Innovation
2. Incremental Innovation
3. Hybrid Innovation Strategy
4. Collaborative Innovation

Question 25

What is the basis and what are the skills required for successful innovation?

Answer 25

• Enhancing an organization’s innovative capacity requires sustained investment, a culture of trust and collaboration

Specific skills required to promote innovation include:

1. Communication
2. Coaching
3. Project Management

Question 26

What is transformational Innovation?

Answer 26

1. Transformational innovation relies on strategic breakthroughs in process and product technology
2. High risk, high reward strategy
3. Allows innovators to change the competitive rules

Question 27

What is Incremental Innovation?

Answer 27

1. Incremental innovation relies on creating a systematic capability for continuous improvement
2. Relies on employees from every level to continuously improve the product and process
3. Productivity gains and consistent innovation raise the competitive bar

Question 28

What is Hybrid Innovation?

Answer 28

1. Pursuing an incremental improvement strategy does preclude the adoption of strategic breakthroughs.
2. Attitudes, skills, and technical competence needed to pursue continuous improvement prepare a company to quickly assimilate breakthroughs.

Question 29

What is Collaborative innovation?

Answer 29

• Collaborative innovation exploits expertise and diffuses results throughout the supply chain

Collaborative innovation provides two advantages:

1. Makes use of talented people from all companies along the chain. 50% of money-making ideas come from customers, suppliers, or competitors.
2. Allows the cost of innovation to be spread among chain members.

Question 30

What are collaborative innovation improvement initiatives?

Answer 30

1. Suggestion programs
2. Collaborative Training
3. Collaborative Problem Solving
4. Collaborative Pilot Projects
5. Collaborative Process Improvement

Question 31

What can be done to improve the long term collaboration on an organizational level?

Answer 31

1. Executive Governance Councils

• Maintain ongoing executive level awareness of business initiatives
• Coordinate supply chain activities throughout the company

2. Supply Chain Advisory Councils:

• Bridge strategic distance between a company and its supply chain partners

Question 32

What is the relationship equity theory?

Answer 32

1. A relationship is seen to be equitable if the ratios of inputs and outcomes are similar between relationship partners.
2. Partners do not have to receive equal benefits (such as receiving the same amount of love, care, or financial security), or make equal contributions (such as investing the same amount of effort, time, or financial resources), as long as the ratios between these benefits and contributions are similar.

Question 33

What are Relationship-specific determinants that improve the communication?

Answer 33

1. Effective communication
2. Existence of personal bonds
3. Equal power distribution
4. Impact of key people leaving

Question 34

Whats the difference between supply chain and value chain?

Answer 34

1. a supply chain is the process of all parties involved in fulfilling a customer request
2. a value chain is a set of interrelated activities a company uses to create a competitive advantage

Question 35

What are measures to improve image/reputation?

Answer 35

1. Communication (advertising/PR)
2. Strategic cooperation (e.g. research institutes)
3. Compulsory code of conduct
4. Reputation management system (monitor, analyse, mitigate, prevent)

Question 36

What is supply chain management (SCM)?

Answer 36

1. Ability to design, make and deliver a product better than a competitor
2. Allows companies to focus on their unique skill set
3. Requires members to work together and be adaptive
4. Adds value to end product through increased organization

Question 37

What are the different types of Supply Chain integration?

Answer 37

1. Internal process integration
2. Backward process integration (1 tier)
3. Forward process integration (1 tier)
4. Backward/forward process integration ( tier each direction)
5. Complete integration (all tiers all directions)

Question 38

What are the components of the internal value chain?

Answer 38

1. Executive management
2. R & D
3. Operations
4. Logistics
5. Marketing
6. Human resources
7. Accounting
8. Finance
9. Supply management
10. Information Technology

Question 39

What is the difference between a global and local value chain?

Answer 39

Local value chain: All members/elements are in a single country

Global value chain: Each member/element may be in a different country

Question 40

What are the components of a quality business relationship?

Answer 40

1. Trust
2. Commitment
3. Satisfaction
   (Commitment reinforces trust)

Question 41

What are the measures of a business relationships stability?

Answer 41

1. Mutual dependance
2. Conflict resolution capacity
3. Positive collaborative history

Question 42

What is the business relationship life cycle?

Answer 42

1. Awareness
2. exploration
3. expansion
4. dedication
5. dissolution
   (business relationships can be interrupted and restarted at the expansion phase if the relationship ended on a good note)

Question 43

What are the effects of trust in a business relationship?

Answer 43

1. Higher transactional efficiency (faster start times, reduced cost, faster conflict resolution)
2. Acts as a catalyst for intangible outcomes (satisfaction, motivation)

Question 44

What are ways to build/maintain trust in a business relationship?

Answer 44

1. Communication
2. Satisfaction (duration/positive history)
3. relationship-specific investment
4. demonstrating shared values/goal compatibility
5. personal characteristics (honesty, fairness, loyalty)
6. equal power distribution

(if trust is higher than perceived risk the transaction will occur)

Question 45

How to gain insight from raw data?

Answer 45

Data→ Information→ Knowlege→ Wisdom

Question 46

What are the components of risk asessment?

Answer 46

1. Assessing transparency of the situation
2. Fesability of the venture