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Supply Chain Management > Strategic Framework for Supply Chains > Flashcards

Strategic Framework for Supply Chains Flashcards

1
Q

What is the definition of supply chains?

A
  • It consists of all parties involved, directly or indirectly, in fulfilling a customer request
  • Includes not only the manufacturer and suppliers, but also transporters, warehouses, retailers, and even customers themselves
  • The scope includes the flows of products, funds, and information
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2
Q

What is the objective of a supply chain?

A
  • Maximize overall value added
  • Maximize the difference between the value of the final product to the customer and the overall supply chain costs (supply chain profitability, supply chain surplus)
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3
Q

Name examples for substitute targets

A
  • Reducing inventory
  • Accelerate processes (cycle times)
  • Increasing flexibility
  • Improve interfaces between stages
  • Synchronization of (non-connected) processes
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4
Q

Name examples for digital technology enablers

A
  • Sensors and geolocaltion
  • Robotics
  • UI and display innovation
  • Cloud services
  • Big Data
  • Nanotech and 3D printing
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5
Q

What are examples for supply chain disruptions?

A
  • COVID-19 Pandemic
  • Suez Canal Blockage
  • Russia-Ukraine Conflict
  • Natural disasters
  • Cybersecurity attacks
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6
Q

What are causes for supply chain disruptions?

A
  • Complex supply chain: Complexity can be amplified by small shifts in consumer demand or more varied orders, creating opportunities for bullwhip effect
  • Miscommunication: False communication can contribute to the bullwhip effect
  • Demand amplification: Retailers become highly reactive to demand and amplify expectations
  • Price fluctuations, ration gaming: Create uncertainty, lead to increased demand variability
  • Supply chain inefficiencies: Inefficient processes, long lead times, and batched orders
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7
Q

What are different types of supply chains?

A
  • Supply-driven: Maximizing the value created by observing the expected supply / availability of resources
  • Demand-driven: Maximizing the value created by observing the expected demand
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8
Q

What are the steps of the decision phase of a supply chain?

A
  1. Supply chain strategy or supply chain design
  2. Supply chain planning
  3. Supply chain operation
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9
Q

What are the characteristics of supply chain planning?

A
  • Short/medium-term decisions about utilizing the given strategic resources
  • Medium-term planning horizon (a quarter to a year)
  • Mostly based on forecasts
  • Examples: Global distribution planning, Buildup of inventories, Policies and contracts, …
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10
Q

What are the cycles of supply chain processes?

A
  1. Procurement cycle (supplier to manufacturer)
  2. Manufacturing cycle (manufacturer to distributor)
  3. Replenishment cycle (distributor to retailer)
  4. Customer order cycle (retailer to customer)
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11
Q

What are subprocesses within a supply chain?

A
  1. Supplier stage market products
  2. Buyer stage places order
  3. Supplier stage receives order
  4. Supplier stage supplies order
  5. Buyer stage receives supply
  6. Buyer returns reverse flows to supplier or third party
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12
Q

Explain the push/pull view of supply chains

A
  • Push processes: initiated in anticipation of customer orders (speculative)
  • Pull processes: initiated in response to a customer order (reactive)
  • Push/pull boundary: customer order decoupling point (CODP)
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13
Q

What are competitive strategies?

A
  • Defines the set of customer needs a firm seeks to satisfy through its products and services
  • Customer needs regarding costs, lead time, range of products or quality
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14
Q

Name different types of strategies for supply chain performance

A
  • Product Development: Specification of the portfolio of new products to develop
  • Marketing and Sales: Specification of market position, pricing and promotion of the product
  • Supply Chain: Determines the nature of material procurement, transportation of materials, manufacture of product (the framework of the supply chain) or creation of service, and distribution of product
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15
Q

What is a strategic fit?

A
  • Competitive supply chain strategies have aligned goals
  • Adjusting the SC to meet the customer needs
  • Structure all processes and resources within the company as well as the SC to be able to execute strategies successfully
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16
Q

What are the steps to achieve strategic fit?

A
  1. Understanding the customer and SC uncertainty
  2. Understanding the SC capabilities
  3. Achieving strategic fit
17
Q

What needs to be considered in the analysis of potential customer needs?

A
  • Quantity of product needed in each lot
  • Response time customers will tolerate
  • Variety of products needed
  • Required service level
  • Price of the product
  • Desired rate of innovation in the product
  • Homogenous customer needs are often the base for identifying different (demand) segment
18
Q

When does the implied demand uncertainty increase?

A
  • Range of quantity required ↑
  • Lead time ↓
  • Variety of products required ↑
  • Number of channels through which products may be acquired ↑
  • Rate of innovation ↑
  • Required service level ↑
19
Q

What are attributes correlating with the level of implied demand uncertainty?

A
  • Product margin
  • Average forecast error
  • Average stockout rate
  • Average forced season-end markdown
20
Q

What is supply chain responsiveness?

A
  • Respond to wide ranges of quantities demanded
  • Meet short lead times
  • Handle a large variety of products
  • Build highly innovative products
  • Meet a very high service level
21
Q

What is supply chain efficiency?

A
  • Minimize a product’s manufacturing and transport costs
22
Q

How can strategic fit be achieved?

A
  • Align supply chain responsiveness and implied uncertainty
  • There is a SC strategy for every competitive situation, but no universal solution
  • Possible need for differentiated strategy depending on different:
     Customer segments
     Product lifecycles
     Changes in the competitive situation
23
Q

How can a supply chain be adjusted for strategic fit?

A
  • Considering various customer segments
     Designing different supply chains
     Compromise solution
  • Accounting for the product life cycle
     Introduction and growth (prioritize product availability)
     Maturity and Decline (prioritize the price)
24
Q

What are challenges in achieving and maintaining strategic fit?

A
  • Increasing product variety and shorter product lifecycles
  • Globalization and increasing uncertainty
  • Fragmentation of supply chain ownership
  • Changing technology and business environment
  • Increasing uncertainty within the political environment (trade, taxes, Brexit, COVID19,…)
  • Environment and sustainability
24
Q

What is inventory in the context of supply chains?

A
  • Cycle inventory: Carrying costs vs. replenishment costs
  • Safety inventory: Capital commitment vs. service level/lost sales
  • Seasonal inventory: Carrying seasonal inventory vs. cost of flexible production rate
  • Examples for indicators: Average inventory, Average cycle inventory, …
25
Q

What are drivers of supply chain performance?

A

Logistical drivers:
- Facilities
- Inventory
- Transportation
Cross-functional drivers:
- Information
- Sourcing
- Pricing

25
Q

What are facilities in the context of supply chains?

A
  • Number of facilities: Centralized vs. decentralized
  • Capabilities of facilities: high utilization vs. excess capacities
  • Flexibility: Adaptability of output quantity/product
  • Examples for indicators: Capacity, Utilization, Processing / setup / down / idle time, …
26
Q

What is transportation in the context of supply chains?

A
  • Lead times: Short lead time vs. high utilization of transportation
  • Choice of transportation mode (means of transport): Fixed costs and variable costs
  • Examples for indicators: Average inbound transportation cost, Avera. income shipment size
27
Q

What is information in the context of supply chains?

A
  • Information infrastructure: Complexity vs. benefits
  • Enabling technologies:
     Electronic Data Interchange (EDI), Internet
     Enterprise Resource Planning (ERP)
     Supply Chain Management Software
     Radio Frequency Identification (RFID)
  • Examples for indicators: Forecast horizon, Frequency of update, Forecast error, …
28
Q

What is sourcing in the context of supply chains?

A
  • Manufacturing: In-house vs. outsourcing
  • Number of suppliers: Single sourcing vs. multiple sourcing
  • Supplier selection: Direct negotiation vs. auction
  • Examples for indicators: Average purchase price, Range of purchase price, Supply quality, …
29
Q

What is pricing in the context of supply chains?

A
  • Pricing strategies: Fixed prices vs. variable prices
  • Demand profiles: Everyday low pricing vs. High-low pricing
  • Examples for indicators: Profit margin, Average order size, Range of periodic sales

Supply Chain Management (4 decks)

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