SCM 9-12 Flashcards
6 drivers of supply chain design
Demand.
Geography.
Transportation.
* Economies of scale.
* Proximity to market.
Resources.
Economic support.
Political and tax policy.
Factors Affecting Industrial Location
- Desired customer service level.
- Access to transportation.
- Freight rates.
- Tax rates and tax breaks.
- Real estate: costs, quality, availability.
- Employment quality and availability.
- Climate, livability.
- Regional culture.
- Duty and duty-drawback laws (if global).
5
Spatial/temporal integration.
- Temporal-spatial nature of logistics function – __________
- Temporal formation – _______
- Spatial elements – ______
– right place and right time
– product availability
– transportation
Warehouse Requirements
_________:
* Closed-loop focus.
_________:
* Make-to-plan (MTP).
* Make-to-order (MTO).
* Assemble-to-order (ATO).
_________:
* Rapid replenishment.
* Market-based ATO.
__________:
– Procurement drivers
– Manufacturing drivers.
– Customer relationship drivers
– Warehouse justification.
_____
* Set of interrelationships designed to achieve the desired
objective.
* Total integrated effort to accomplish the desired objective.
System Analysis
T or F
Total system performance is singularly important!
duh
T or F
Components or parts of system need optimum construction
F
Components or parts of system need not have optimum construction
T or F
Components linked together in a balanced system will
produce greater end results than the sum of individual
components.
t
2 Key Trade-offs
Cost to Cost
Example: more transportation for less inventory.
Cost to Serve
Example: more cost for increased revenue.
Read only
Supply Chain Design Questions 1
* WHERE should the manufacturing plants be located, and which products
should they produce?
* HOW MANY distribution centers should the firm use, and where should they
be located?
* WHAT CUSTOMERS or market areas should be serviced from each distribution center?
* WHICH PRODUCT lines should be produced or stocked at each plant or
distribution center?
* What is the ROLE of master or regional distribution centers relative to field or
local distribution centers?
* What SOURCING and marketing channels should be used to source material
and serve international markets?
* What COMBINATION of public and private warehouse facilities should be
used?
* What service providers and value-added services should be used to meet
market requirements?
* What is the IMPACT of increases in fuel prices?
OK
2 TYPES OF Manufacturing/Distribution Integration
– Economy of Scale
– Economy of Scope
one of the 2 TYPES OF Manufacturing/Distribution Integration
______:
Companies can achieve economies of scale by increasing production and lowering costs. This happens because costs are spread over a larger number of goods
Economy of Sclae
one of the 2 TYPES OF Manufacturing/Distribution Integration
- states the average total cost of a company’s production
decreases when there is an increasing variety of goods
produced - Generalized relationship
Economy of Scope
3 Facility Network Integration
- Transportation cost integration (Spatial).
- Inventory cost integration (Temporal).
- Total cost-service integration
3 Logistics System Design Requirements
– Commondity
– Integrated Service
– Customized Service
one of the 3 Logistics System Design Requirements:
- Direct bulk or cross- dock delivery.
- Limited product requirements.
- Unique information requirements and
capabilities. - Precise management requirements
Commodity
one of the 3 Logistics System Design Requirements:
- Delivery to
customer DC - Broad product
offering - Range of
information
requirements and
capabilities - Accept more
generic strategies
INtegrated service
one of the 3 Logistics System Design Requirements:
Delivery in small
quantities
* Select products
* Tracking of
individual
behavior
* Individual
focused
strategies
Customized Service
t or f
all supply chains have the same requirements.
f.
NOT ALL
5 Supply Chain Design Criteria
Design to:
– MInimized landed cost
– max asset utilization
– max competitive positioning (relevancy)
– minimize risk
– max control
t or f
infrastructure congestion is becoming increasingly
problematic
t
t or f
increased energy cost will shift supply chain mode
selection and design.
t
Location Problem Types
*____ versus. distribution center location.
*____ versus. dynamic time horizon.
*____ versus. deterministic data.
*____ versus. multiple products.
*____ versus. discrete approaches.
*____ versus. temporal dimensions.
*____ versus. cost optimization.
28
Plant
Static
Stochastic
Single
Continuous
Spatial
Profit
Supply chain design criteria from
1990 - 2012 - 2021
1990
- Demand.
* Production.
* Material.
* Transportation
2012:
(yung 1990)
+ Sustainability (energy labor political)
+ Taxation
2021
(yung 2012)
+ water
conclusion: overtime nagbabago supply chain design
______ is the Combination of
Logistics Functions in Single Managerial Group
Functional Aggregation
____:
Motivated by belief that GROUPING LOGISTICS into a single organization would:
* Increase likelihood of integration.
* Improve knowledge of how operational changes impact performance in other areas.
* The trend is towards strategic management of all forms of inventory movement and storage for maximum benefit of the enterprise.
Development of logistics information systems enabled
functional integration of organizations.
FUNCTIONAL AGGREGATION
Aspects of Functional Aggregation
- _____, ______, and _____ are separate line operations.
- ______ embraces the full potential
of management information to plan and coordinate operations. - Overall ____ and ____ exist at the highest level of the organization to facilitate integration.
– purchasing, manuf support, customer relationship managment
– logistical resource planning
– planning and control
Which process owner sa process org?
Marketing, sales, logistics, manufacturing, finance,
information technology
demand planning
Which process owner sa process org?
Marketing, sales, logistics, information technology
customer relationship management
Which process owner sa process org?
Sales, order processing, logistics, customer service, accounting
order fulfillment / service delivery
Which process owner sa process org?
New product development, marketing, procurement, manufacturing, logistics
product / service development launch
Which process owner sa process org?
Procurement, manufacturing, logistics
Manufacturing customization
Which process owner sa process org?
Procurement, manufacturing, information technology
supplier relationship collaboration
Which process owner sa process org?
Procurement, logistics, customer service, finance
life cycle support
Which process owner sa process org?
Logistics, customer service
reverse logistics
5 barriers to process integration
Functional organization structure.(Department budgets.)
Measurement & reward systems. (Functional performance.)
Inventory use. (Traditional positioning supports functional performance.)
Infocratic structure. (Information content and flow follow traditional functions.)
Limits to sharing knowledge. (Functional experts hoard power)
____ reflects an organizational gap in achieving end-to-end integration.
Access the text alternative for slide images.
The great divide
The great Divide
division between:
___ and ____
Procurement and manuf integration
&
Distribution and marketing integration
t or f
Supply Chain Perspective places More
Emphasis on internal Relationships
F
EXTERNAL not Internal
3 Essential Concepts to Understanding
Dependency
____:
* Disproportionate work among channel members.
* Collaborative role of member is based on risk within a specific supply chain.
_____:
* Increase in retailer power over the last decade.
* Powerful firms tending to link together into supply chain arrangements.
* Category dominance versus. brand power.
_____:
* No dominant model for how firms gain leadership responsibility.
* Greater commitment to the relationship when leaders use rewards and expertise to exercise power.
risk
power
leadership
3 Highlights of Basic Forms of Collaboration
– Contracting
— Outsourcing
— Administered
3 Highlights of Basic Forms of Collaboration
Dominant firm governs by command and control.
* Limited sharing of strategic information and limited joint
planning.
* Relationship has no specific termination or rebid time frame.
administered
3 Highlights of Basic Forms of Collaboration
- Adds time dimension to traditional buying/selling.
- (example price, service, and performance expectations over
time period)
contracting
one of the 3 Highlights of Basic Forms of Collaboration
- Shifts focus from buying materials to performing a specific
service or activity
outsourcing
2 highlights of basic forms of collab
____ (example, Walmart, Proctor & Gamble, Dell & suppliers, and H.E. Butt & suppliers)
* Governed by desire to voluntarily work together bot
intellectually and operationally.
* Voluntary integration of human, financial, operational, and
technical resources.
* Extensive joint planning and expectations of ongoing
relationship.
_____
* Extreme form of Alliance.
17
— alliance
— enterprise extension
t or f
Alliances are often initiated by the firm that was the customer
in the relationship
t
t or f
The initiating firm should perform an in-depth assessment of
its internal practices, policies, and culture.
t
in Implementing Relationships
Partners should have (give 3)
- Compatible cultures.
- A common strategic vision.
- Supportive operating philosophies
t or f
in Implementing Relationships
start big to foster early wins
f.
start small
t or f
in implementing relationship, Implement the alliance in its simplest form.
t
Maintaining Relationships – Dependent on Three Key Activities
- Mutual strategic and operational goals.
- Two-way performance measurements.
- Formal and informal feedback mechanisms.
type of trust
___ is grounded in perception of actual
behavior and operating performance.
Reliability based trust
- Firms perceived as incapable of delivering as promised are
perceived as unreliable. - Unreliable firms are unworthy of trust in a relationship
type of trust
__ is based on culture and philosophy
character based trust
- Perception that partners are interested in each other’s welfare.
- Trusting partners believe that each other will protect the other’s
interest
Measurement System Objectives – Related to Logistical Operations
- Monitoring system performance by establishment of _______.
- controlling ______ by having appropriate standards of performance relative to metrics being monitored.
- Directing _______ on system performance through
motivation and reward. - ______ through superior logistics
performance.
– appropriate metrics to track and report.
– system performance
– employee focus
– improving shareholder value
5 Operational Assessment
- Functional perspectives.
- Measuring customer accommodation.
- Determining appropriate metrics.
- Supply chain comprehensive metrics.
- Benchmarking.
5 Functional Perspective on Logistics
Measures – Major Categories
- Cost.
- Customer service.
- Quality.
- Productivity.
- Asset management
t or f
__ is Most Direction Reflection of Logistics Performance
cost
Customer Service Requires … Specific Measures for ________ , which are?
_______
_______
— Each Element of Basic Service Platform
— availability organization’s fill rate (item x line x value x order)
— Operational performance
Quality Measures – Often Include __________ performance
Service reliability
NOTE:
* Accuracy of work activities performed.
* Damage frequency is the ratio of number of damaged units
to the total number of units.
* Number of customer returns of damaged or defective
goods.
* Number of instances when information is not available on
request.
* Number of instances when inaccurate information is
discovered.
Productivity – Measured as ______.
Through ____ and _____.
— Output of Goods Compared with Input Quantities
— Labor Productivity
— Eqpt. Downtime
Inventory Turnover Rate – Measured
Differently by ________
Different Types of Firms.
Note:
Majority of firms:
COGS / Ave inventory valued @ cost
Some firms:
Sales revenue / Ave inventory valued @ cost
Measuring Customer Relationships –
Requires an Additional Set of Metrics, which are? (give 3)
— Perfect order
— Absolute performance
— customer satisfaction
one of the metrics of customer relationships:
___ measures the effectiveness of the overall integrated logistical performance
— Perfect order
one of the metrics of customer relationships:
– provides a better indication of how a
firm’s performance impacts customers.
absolute performance
one of the metrics of customer relationships:
measurement requires monitoring,
measuring, and collecting information from the customer
customer satisfaction
Determining Appropriate Metrics Using
Frameworks considers 3 of the following, which are:
competitve basis
measurement focus
measure frequency
Determining Appropriate Metrics Using
Frameworks
_____ reflects the fundamental choice
between responsive or efficient logistics performance.
competitve basis
Determining Appropriate Metrics Using
Frameworks
__ is a continuum ranging from
operational metrics to strategic metrics
measurement focus
Determining Appropriate Metrics Using
Frameworks
__ is the need to monitor day-to-
day performance versus less frequent review to diagnose performance problems.
measurement frequency
6 supply Chain Comprehensive Metrics
— Cash-to-cash cycle time
— Inventory days of supply
— dwell time
— On-shelf in-stock percentage
— total supply chain cost
— supply chain response time
2 of the supply Chain Comprehensive Metrics
________.
* Calendar days of sales available based on recent sales activity.
________.
* Ration of days inventory sits idle to the days it is productively used or
positioned.
Inventory days of supply
Dwell time
2 of the supply Chain Comprehensive Metrics
_______.
* Time required to convert a dollar spent on inventory into a dollar of
sales revenue.
______.
* Percentage of time a product is available on the shelf in a store.
Cash-to-cash cycle time
on-shelf in-stock percentage
2 of the supply Chain Comprehensive Metrics
______
* Sum of costs across all firms in the supply chain.
_______
* Time required for all firms to recognize a fundamental shift in demand,
internalizing that finding, replan, and adjust output to meet that
demand.
Total supply chain cost
Supply chain response time
______ Needed to Link Supply
Chain Performance to Financial Results
financial assessment
tools of financial assessment
— Segmentation of data.
* By channel, territory, customer, product, and supplier.
— Cost-revenue analysis.
— Strategic profit model.
_____ Needed to Provide a
Financial View of Integrated Logistics
Accounting deficiencies make this difficult.
cost revenue analysis
Three approaches are available to identify and control
logistics expenses.
- Contribution.
- Net profit.
- Activity-based costing.
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Accounting Practices to Financial
Statements – Creates Some Deficiencies
Costs are aggregated on a standard account basis rather
than activity basis.
* Inbound freight expense is deducted from gross sales.
* Outbound freight is reported as an operating expense.
* Freight is not reported as a specific cost. (that is, products
purchased on a delivered price basis)
* Fails to specify and assign inventory cost.
k
____ Requires All Costs
be Identified as Fixed or Variable
contribution analsysis
Costs
____are those that do not directly change with volume.
* _____ are those that change as a result of volume.
* _____ are those specifically incurred because of the existence of the segment of analysis (example, product,
customer, channel).
- _____ exist because of more than one segment of business
– Fixed costs
– Variable costs
– Direct costs
– Indirect costs
____ Partial Solution
to Arbitrary Allocations
— suggests costs be traced to
activities.
activity based costing
Biggest challenge with the ABC approach is identifying the activities, related expenses, and drivers of expense
_____ – Shows Relationship
of Income and Balance Sheet to ROA
Strategic Profit Model
Strategic Profit Model
- _____ is critical measure of
financial success. - _____ measures profitability of
funds invested by owners. - _____ measures profitability generated
by managing operational assets.
– Return on investment (ROI)
– Return on net work (RONW)
– Return on assets (ROA)
Two Fundamental Ways to Improve ROA
– Manage net profit margin improvements.
– Manage asset turnover improvements.
NOTE:
- Net profit margin is net profit divided by net sales.
- Measures portion of each sales dollar that is kept by the
firm. - Asset turnover is ratio of total sales divided by total
assets. - Measures efficiency of management utilization of assets.
Evolving Responsibilities: Supply Chain
Professionals.
3 fucntions include
— Procurement
— manufacturing
— logistics
4 Es Dimensions of Sustainability
Environmental
Economics
Ethics
Education
_____
— Typically begin as single network.
— Moving toward separate network for Distributor-to-Consumers (D2C).
— Focus on growing regional markets.
Identify delivery expectations and requirements.
— Growing percent of business.
— e-commerce packaging
omni-channel network
_____ – Supply Chain as
a Control Tower
* Managing global inventory.
* Managing multi-channel inventory.
* Using big data to develop total supply chain intelligence to
improve competitive positioning.
Global Data Integration
Top workforce issues orgs face
Attracting talent 59%
Developing leaders 48%
Retaining high performers 40%
Enhancing employee motivation and
engagement
38%
Enhancing workforce performance 37%
Developing bench strength 34%
Reducing workforce cost 30%
Enhancing career and job flexibility 29%
Effectively managing succession 27%
Top Reasons Organizations Look
Externally for Talent
Reason Percentage
Need new skills/capabilities due to strategy change 44%
Need new skills/capabilities due to update in innovation/technology tools, products, applications, or industry standards
43%
Lack of bench talent to move up into larger of next level role 43%
Need for new skills/capabilities due to newly created lines of
business and/or service offerings for customers
39%
Enhancing employee motivation and engagement 38%
Backfilling talent that unexpectedly left the organization 34%
Enhancing career and job flexibility 29%
Reorganization opened up new or different scoped roles 20%
Looking for best-in-class talent from target companies 19%
Many firms find it challenging to…
* Acquire. [ATTRACT INTEREST]
* Develop. [INTERVIEW]
* Conserve. [COACH & EDUCATE]
* Retain. [WORKLIFE BALANCE]
K
___ is a communications technology that facilitates secure communication between financial and supply chain
institutions.
BLOCKCHAIN
___ objective is to increase data accuracy, integrity, and security as information is exchanged between supply
chain partners.
BLOCKCHAIN
Blockchain Benefits ARE
Enhanced transparency
Greater scalability
better security
increased inovation
