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Operations Management > Supply chain: basics and performances > Flashcards

Supply chain: basics and performances Flashcards

1
Q

What is a supply chain?

A

The network of actors, stakeholders, information and resources involved in producing and delivering a product/service that creates value for the customer

  • Goal: Create value for customer
  • All actors are involved in fulfilling a customer request
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2
Q

Name some important stakeholders in a supply chain

A

Supplier
Manufacturer
Customer

Transporters
Warehouses
Retaliers

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3
Q

What is a consumer surplus?

A

The difference of what a customer is willing to pay and what they actually pay. The surplus is the “extra value” you get.

For example you are willing to pay 10 euros for a sandwich, but it only costs 7. The 3 euros left is the surplus

  • The higher the consumer surplus, the more attractive product or service
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4
Q

Can you give an example of customer surplus?

A

Branded medication and generic drugs.

People are willing to pay more for alvedon that for generic drugs even though they contain the exact same ingredients

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5
Q

What is supply chain profitability?

A

The total profit to be shared across all supply chain stages:

Revenue from customer - Overall cost across supply chain

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6
Q

What are make or buy decisions?

A

The decision to buy everything you sell (outsourcing) or produce it internally

  • Retailers buy, manufacturers make
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7
Q

What are the decision stages of a supply chain?

A
  1. Strategy: Long term
    - Resources to be allocated, processes, outsourcing
  2. Planning: Intermediate (quarter-year)
    - Markets to be supplied, inventory, quantities, promotions
  3. Operation: short term (day-week)
    - Individual orders, shipping allocation, delivery schedule
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8
Q

In what two ways can the processes of a supply chain be viewed?

A
  1. Cycle view: The process are divided into cycles that illustrates the process between actors/stakeholders
  2. Push-pull view: All processes of a supply chain fall within either push or pull processes
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9
Q

What is push and pull?

A

Push= Products are produced on forecasted demand rather than actual customer orders

Pull= Products are produced based on actual customer demand. So customer demand triggers the production

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10
Q

All supply chain processes can be classified in 3 macro processes, what are they called?

A
  1. CRM= Customer relationship management (focus on customer)
  2. ISCM= Internal supply chain management (managing internal processes)
  3. SCM= Supplier relationship management (ensure smooth material flows)
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11
Q

What is outsourcing?

A

In-house processes are moved to an external vendor. You buy the result from another actor basically

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12
Q

When deciding what to outsource or to arrange relationships with other actors, 6 different strategies can be used, what are these?

A
  1. Many suppliers: works best for commodities. Long term relationships are not the goal
  2. Few suppliers: Build long-term reliable relationships
    - More reliable, but vulnerable
  3. Vertical integration: buy a supplier/customer
    - Backward integration: buying suppliers
    - Forward integration: Controlling distribution/retail
  4. Joint ventures: collaboration between firms to enhance new product
  5. Keiretsu networks: Combine few suppliers, vertical integration and joint ventures
  6. Virtual companies: Almost only rely on outsourcing, outsource most activites within the company. A fashion brand designs clothes but outsources production, distribution, and marketing to other companies, functioning as a “virtual” business.
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13
Q

What is strategic fit?

A

The alignment between a companies competitive strategy and supply chain strategy

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14
Q

What is supply chain responsiveness? give an example

A

The ability of a supply chain to quickly adapt to changes in demand, supply conditions or external factors

Example. Tesla: customers can design their car interior, and the company produces that customized interior upon customer request

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15
Q

What is supply chain efficiency? Give an example

A

The ability to deliver products or services to customers at the lowest possible cost while maintaining quality and meeting demand

Exmaple: Barilla produces pasta with little variety to a low cost and production is scheduled for weeks in advance

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16
Q

What are the main differences between SC responsiveness and SC efficiency?

A

Responsiveness: Customized, change products/production in short advance. Costly

Effeciency: Little variety/flexibility , production scheduled weeks in advance. Cheap

17
Q

What is return on investment?

A

ROI= Profit/capital employed

  • Measures how much profit you make from an investment compared to what you spent
18
Q

Return on assets?

A

ROA= Net income/total costs

  • Measures how efficient a company uses its assets to generate profit
19
Q

Can you name 3 drivers of supply chain performances? There are 6 in total

A
  1. facilities: production sites and storage sites
  2. Inventory: cycle inventory, safety stock
  3. Transportation: Outbound and inbound transportation
  4. Information: Data and analysis concerning facilities, inventory
  5. Sourcing: Who will perform a particular activity
  6. Pricing: How much will a firm charge for goods/service: average sale price profit margin etc.
20
Q

What is the SCOR model? Explain all the steps shortly

A

Supply Chain Operations Reference model

  • A framework that helps companies evaluate and improve their supply chain performance. It focuses on 6 key processes:
  1. Plan: Determine resources, requirements, operations, ensuring alignment with business goals
  2. Source: Find and select suppliers that can provide the right materials, goods or services needed for production
  3. Make: Tranform raw materials to finished goods
  4. Deliver: Distribute products to customers
  5. Return: Handle product returns, repairs and recycle (reverse floe of goods)
  6. Enable: Support the design and management of planning and production process
    - Quality management, SC risk management etc
21
Q

How can every step of SCOR be studied?

A

Use a pyramid of levels: break down the process into different levels of detail:

Level 1. Strategic level: develop strategy

Level 2. Tactical level: translate strategic goals into actions

Level 3. Operational level: Day-to-day management of supply chain activities

Level 4. Detailed level: Specific tasks and processes

22
Q

Can you give an example of how SCOR can be used?

A

A company uses SCOR to identify bottlenecks in the delivery process, compares its performance against competitors and implements best practices.

23
Q

What is CODP?

A

Customer order Decoupling Point:

  • The point in the supply chain where the product goes from being produced based on forecast to produced on specific customer orders

Before CODP: Activities are Push-driven
After CODP: Activities are Pull-driven

24
Q

Depending on where the CODP is positioned in the supply chain: how does that affect the supply chain?

A
  • The further upstream: the more value-adding activities can be based on demand
  • The further downstream: The more value-adding activities must be carried out under uncertainty
25
Q

There are 4 major types of CODPs depending on where in the supply chain it is positioned, can you name them?

A

Engineering to order (ETO): Products are designed and built upon customer request

Make to order (MTO): Products are produced only after receiving a customer order

Assemble to order (ATO): Components are stocked in advance, but are assembled upon customer order

Make to Stock (MTS): Products are produced based on forecasted demand and kept in stock for immediate sale, without waiting for customer orders.

Operations Management (20 decks)

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