Supply Chain Design (10)

Question 1

3 areas of focus in creating an effective supply chain

Answer 1

link service/products with

1. internal processes
2. external supply chain
3. customers, suppliers, and supply chain

Question 2

Supply Chain Design

Answer 2

designing a firm’s supply chain to meet the competitive priorities of the firm’s operations strategy.

Question 3

Supply Chain Design Pressures

Answer 3

dynamic sales volume
customer service levels
service/product proliferation
*with greater global competition and speed to market, more pressure to differentiate and adapt more quickly

Question 4

Inventory Measures: average aggregate inventory value

Answer 4

= (# of units of item A typically on hand)(value of each unit of item A) + (# of units of item B typically on hand) (value of each unit of item B)….

Question 5

Inventory Measures: weeks of supply

Answer 5

average aggregate inv. value/ weekly sales (at cost)

Question 6

Inventory Measures: Inventory Turnover

Answer 6

annual sales (at cost)/ average aggregate inv. value

Question 7

Financial Measures

Answer 7

how supply chain is designed and managed has a huge financial impact on firm. Inv. is an investment because needed for future use, but ties up funds. 
total revenue 
COGS
Operating Exp
Cash Flow 
Working Capital 
ROA

Question 8

centralized placement

Answer 8

keeping all the inv of a product at a single location such as firm’s plant or a warehouse and shipping directly to each of its customers

Question 9

inventory pooling

Answer 9

reduction in inv and safety stock because of the margin of variable demands from customers

Question 10

forward placement

Answer 10

locating stock closer to customers at a warehouse, DC, wholesaler, or retailer

Question 11

Improving Supply Chain (SCM)

Answer 11

inventory placement,
mass customization
outsourcing or insourcing
efficient vs. responsive supply chain (lean)

Question 12

Mass Customization

Answer 12

strategy whereby a firm’s highly divergent processes generate a wide variety of customized services or products at
reasonably low costs. ie paint
postponement- last step is the customization
comp. adv-> managing customer relationships, eliminating finished goods inventory, increase perceived value of services or products

Question 13

Outsourcing proceses

Answer 13

make or buy decision
vertical integration- backward integration move towards buying supplier and forward integration is buying distributor. can also be offshoring.

Question 14

Outsourcing decision factors

Answer 14

comparative labor costs
rework and product returns
logistics costs
tariffs and taxes
market effects
labor laws and unions 
internet

Question 15

potential pitfalls

Answer 15

pulling the plug too quickly
technology transfer
process integration

Question 16

Efficient Supply Chains

Answer 16

works best in environments where demand is predictable, ie grocery stores

Question 17

Responsive Supply Chains

Answer 17

designed to react quickly in order to hedge against uncertainties in demand. best when firms offer a great variety of services or products and demand predicability is low.

Question 18

Efficient Supply Chains

common designs:

Answer 18

build to stock (BTS): product is built to a sales forecast and sold to the customer from a finished goods stock. ex. groceries, books, appliances.

Question 19

Responsive Supply Chains

common designs

Answer 19

assemble to order: product is built to customer specifications from a stock of existing components, assemble delayed until order is received
make to order: product is based on standard design, however component production and manufacture of the final product is linked to the customer’s specifications. ex. lands end
design to order: product is designed and built entirely to the customer’s specifications, product fits their specific needs. ex construction projects, designer dresses,
*** to stay competitive firms frequently introduce new services or products.