Supply chain management Flashcards
What is supply chain management?
Supply chain management is the management of the interconnection of organisations that relate to each other through upstream and downstream linkages between the processes that produce value to the ultimate consumer in the form of products and services.
What are the 3 types of flows?
- Flow of materials/goods
- Flow of finance (money/cash/cheque)
- Flow of information – Information is associated with all the SCM activities.
What are the parties in supply chains?
- Manufacturers
- Suppliers
- Transporters
- Warehouses
- Wholesalers /Retailers
- Customers
What is procurement?
The process of sourcing, purchasing, receiving, and inspecting all of the goods and services your business needs to operate.
Activity 1 procurement and key decisions:
- Identifying Needs
- Sourcing
- Negotiating
- Making payment
- Receiving And Inspecting Goods
- Invoicing
- Managing Suppliers
Key decisions:
- Number of suppliers –One or many?
- Location –Nearshore sourcing or offshore sourcing.
- Bulk or spot purchase.
Activity 2: Transport and key decisions
Truck:
- Door-to-door
- Flexible( Truck load or Less-Than-Truckload)
- Moderate freight rate
- Create traffic congestion and pollution.
Rail:
- Station-to-station
- Ideal for bulkier productions and containers
- Cost effective compared to truck
- More energy efficient than truck
Key decisions
- Own account/third party split
- Lease/buy transport assets
- Last mile delivery. Use a locker?
- Routing and fleet sizing
- Modal split
Activity 3: Inventory management and key decisions
- Purchase order
- Bill
- Stock rises
- Sales order
- Invoice
- Inventory drops
- Stock re-order
Key decisions:
- Service level policy
- Replenishment strategy
- Fixed Order Point (FOP)
- Time Phased Ordering (TPO)
Activity 4: Warehousing and key decisions
The process of storing physical raw materials, unfinished products, and finished products.
Processes:
- Receiving
- Put-Away
- Storage
- Picking
- Packing
- Dispatching
Key decisions
- Number of warehouse
- Location of depots
- Use of public/own warehouses
- Warehouse design and layout
- Materials handling methods
Activity 5: Order fulfilment and key decisions
- Receiving
- Order Processing
- Delivering
key decisions:
- Order cycle time policy
- Order processing status
- Warranty policy
- Returns strategy
Activity 6: Logistics management
Logistics activities include transportation management, inventory management, order fulfilment, and warehousing(packaging, picking, dispatching).
The process of planning, implementing and controlling the flow and storage of goods.
What are reverse logistics?
- The process of moving products back through a supply chain from the end customer to the manufacturer or retailer. It involves the return, inspection, and processing of products for recycling, repair, resale, or disposal.
- Reverse logistics is the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.
- When reserve logistics happens?
- Returning faulty products.
- Remanufacture and refurbishing.
- Redesigning and repacking
- Recycling
- Recall (Toyota)
Whats the difference between SC and Logistics?
- SCM includes all of the logistics management activities noted above, as well as sourcing and procurement operations, collaboration with suppliers, third party service providers and channel partners.
- SCM drives coordination of processes and activities with and across marketing, sales, product design, finance, and information technology.
- Focuses on a company’s internal operations, specifically the movement and storage of goods within the supply chain.
- Logistics involves planning and organizing operations to ensure the smooth running of supply chain and commerce processes.
What are the aims of SCM?
SCM is a collection of activities which ensures: At the RIGHT location At the RIGHT time At the RIGHT cost In the RIGHT condition.
To efficiently, effectively, and sustainably provide customers with the right combination of time, place, form, and possession utilities.
What’s an example of a correct decision?
In two years, National Semiconductor reduced distribution costs by 2.5%, delivery time by 47% and increased sales by 34% by:
- Shutting six warehouses around the globe.
- Air-freighting microchips to customers from a new centralised distribution centre.
What’s an example of an incorrect decision?
Compaq computer estimates it lost $500 million to $1 billion in sales in 1995 because its laptops and desktops were not available when and where customers were ready to buy them. In 1993, IBM lost a major fraction of its potential sales of desktop computers because it could not purchase enough chips that control the computer displays.
