Supply chain management Flashcards
what is a supply chain
a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products to customers through distribution system
what three areas does supply chain span out through and what management do they belong to?
- procurement (purchasing goods to transform them, supply chain management)
- internal transformation (making the products, operations management)
- distribution (logistics, supply chain management)
which section of supply chain management is inbound and which is outbound
purchasing is inbound, physical distribution is outbound
what are the 3 tiers of suppliers and who do you want relationships with
1 is my supplier, want close relationship with
2 is my supplier’s supplier, want a meh relationship with just to make sure everything tier 1 wants he gets
3 dont need any relationship with, 2nd tier’s supplier
what does going global do in terms of a company’s supplier/ facility locations
it reduces labour costs
why is the fashion industry reshoring and hurting the global supply chains by not being involved in them anymore
they are reshoring to reduce both lead times and shipping costs
what is vertical integration, what does it ask a company
the proportion of the supply chain that the company owns, for example owning your supplier, asks a company whether or not to make their supplies or to buy them
why would an organization not want to outsource
control
what products would not be smart to outsource
vital parts to your goods. for example tesla does not outsource their batteries
what did arcteryx do as a vertical integration example
has a faciility in vancouver where they are focusing on proprietary designs & new products, this accounts for 10% of their global manufacturing and essentially what they learn and perfected in that facility, they taught and ‘integrated’ into their facilities over seas
what is purchasing (procurement) and why is it important
it is the things we buy like services or materials that we choose not to produce ourselves, it is important because they are a huge cost and even the modest reductions in these costs can lead to huge benefits
how do companies select vendors to supply them
based on many criterias, each companies weigh what they believe is most important of a trait that their suppliers should have and choose depending on that. For example cirteria can include company as a whole, services, products, and sustainability.
what does improving supplier operations/ efficiency do and how have some companies helped their suppliers
it will improve the entire supply chain’s performance, some companies have offered free consulting to their vendors to help them be more profitable, produce higher quality products, be more efficient, etc.
three types of purchasing
- centralized purchasing
- stockless purchasing
- blanket purchase orders (POs)
what is centralized purchasing, give an example,positives and negatives
when the entire organization’s needs for a product are purchased in one order. Example is safeway and plastic bags, locations were individually ordering bags so the headquarters decided to combine all orders. Positives: purchasing power, negatives: reduced flexibility/ speed
what is stockless purchasing
supplier delivers material directly to the production area rather than to a stock room
what are the pros for retailer for blanket purchase orders and what are the pros for the manufacturer
pros for retailer
- unit cost savings
- lower holding costs
- lower order costs
- less supply uncertainty
the pros for the manufacturer
- known demand
what is vendor managed inventory
when the vendors/ suppliers manage their customer’s inventory and supplies and restock them when needed
what are the implementation challenges for VMI
customer: trusting vendor enough to let it happen, staff layoffs
vendor: more staffing, vehicles, remote technology, overall work required.
benefits that come from vmi
customer: less admin (ordering costs), less chance of stockouts
vendor: knowledge of demand patterns and potential for more sales since less stockouts
what do firms who are excelling at procurement supply chain management do that sets them apart
they work with fewer suppliers which reduces lead times, costs, late deliveries, overall problems
what three utilities are covered by physical distribution (logistics) and what do each of them mean
time utility (when): providing goods when wanted, not produced
place utility (where): providing goods where they are needed, not where they are produced
form utility (what): the physical change in goods and/ or packaging, basically what you are providing
