Supply Chain Management Flashcards
What is the ISO28000 definition of the supply chain?
“A set of interconnected processes and resources that starts with the sourcing of raw materials and ends with the delivery of products and services to end users.”
What might the supply chain include? Provide 6 examples.
Producers Suppliers Manufacturers Distributers Wholesalers Vendors Logistics providers Facilities Plants Offices Warehouses Branches
Why is supply chain management more important now than it might have been in the past?
Greater exposure due to:
More competitive and globalised marketplace
Shorter product lifecycles
Rapid changes in technology
What type of risk treatment does the supply chain offer?
Transfer
What is meant by upstream and downstream risks
Upstream = risks in supply chain Downstream = risks in delivery chain
What are the risks inherent in strategic partnerships?
Traditional insurance unlikely to cover reputational damage or loss of market share in the event of a disruption to the supply chain.
May reduce opportunities to work with other organisations.
Prices may be fixed.
What are the advantages of joint ventures?
Supplier will not be able to prioritise other suppliers, giving a competitive advantage.
Shared funding for adopting technological changes with reduced capital at risk.
Could be a tactic for achieving the strategic objective of reduced dependency on the supply chain.
Give an example of outsourcing non-core processes.
Contract cleaners in an office.
What risks should be considered with outsourcing?
Scope and duration of arrangements
Services to be supplied and restrictions on sub-contracting
Pricing, fee structure, service levels and performance requirements
Audit and monitoring procedures
confidentiality, privacy and security of info
Default arrangements and termination provisions
Dispute resolution arrangements
Insurance requirements, liability and indemnity
Employee rights legislation
What benefits can be achieved from outsourcing?
Focus on core competency
Reduced cost of manufacturing and logistics
Reduced head-count of hourly workers and managers
Improved accuracy
Flexibility and wider range of services
Access to global networks and superior technology
Improved service and quality
Reduced capital investment and increased cash flow
Why is outsourcing not a complete transfer of risk?
Reputational damage flows up the supply chain
Additional insurance may be required to cover facilities not managed by the org.
What strategic factors should the board consider before outsourcing?
Decisions should be made based in cost-effectiveness and efficiency
There should be a clear understanding of the risk exposure associated with the supply chain.
Decision to outsource should be within risk appetite, consistent with risk attitude and within the org’s risk capacity
