Supply Chain Management (L17)

Question 1

Define Logisitics

Answer 1

Process of strategically managing the procurement, movement and storage of materials, parts and finished inventory

Question 2

Define Supply Chain Management

Answer 2

Management of upstream & downstream relationships with suppliers & customers to deliver superior customer value at less cost to the whole supply chain

Question 3

Summarise Value Advantage

Answer 3

It is important for a product to stand out in the market to sell. As technologies converge this is harder, so focus is put on services (e.g. delivery, after-sales, tech support).

Question 4

Current supply chain management challenges (4)

Answer 4

1. New rules of competition
2. Turbulence & volatility
3. Globalisation of industry
4. Downward pressure on price

Question 5

1. New rules of competition

Answer 5

Supply chain competition instead of company against company. Value delivery system better than competition: more responsive to fast-changing markets, more consistent & reliable in delivery of value.

Question 6

2. Globalisation of industry

Answer 6

Materials & components sourced & assembled worldwide. Cost reduction e.g. lower labour costs. Supply chains lengthen: important to find a balance between locations and local market requirements

Question 7

3. Turbulence & volatity

Answer 7

Increased uncertainty due to:
- Economic factors
- Geo-political upheavals
- Global supply chains
Forecasting is difficult
Impacts demand and supply

Question 8

4. Downward pressure on price

Answer 8

Prices driven down by:
- Low-cost manufacturing bases e.g. China
- Removal of trade barriers
- Deregulation
- Internet e.g. price comparison