Supply Chain Strategies Flashcards
How do you calculate supply chain surplus?
Customer value- Total supply chain cost
What are the two ends to the spectrum for the strategic options for supply chain design?
-Responsiveness and Efficiency
What contributes to demand uncertainty?
-High variation in quantity
-Short response time
-High product variety
-High levels of innovation
-High service level
What contributes to supply uncertainty?
-Frequent breakdowns
-Unpredictable and low yields
-Poor quality
-Limited/ inflexible capacity
-Evolving production process
What contributes to implied supply chain uncertainty?
-Demand uncertainty
-Supply uncertainty
What are the logistical drivers of a supply chain?
-Facilities
-Inventory
-Transportation
What are the cross-functional drivers of a supply chain?
-Information
-Sourcing
-Pricing
What is the mean and standard deviation for a pool of N stores?
- Mean= mean * N
-S.D= S.D *N^1/2
What is the benefit of inventory pooling?
It decreases the annual total-inventory related cost due to economies of scale and reduced demand uncertainty
What are the benefits of location pooling?
-Reduces demand uncertainty
-Maintain the same service level with less inventory
-Maintain a higher service level with the same inventory
-Maintain a higher service level with the same inventory
What are the drawbacks of location pooling?
-Increases delivery time
-Increases transportation costs
What are alternatives to location pooling?
-Virtual pooling
-Drop shipping
What is product pooling?
This is when a universal design is used to meet demand for multiple distinct products
What are the benefits of product pooling?
-Less demand uncertainty
-Economies of scale may reduce production costs
What are the drawbacks of product pooling?
-Loss of product variety and functionality
-May be expensive due to extra products or extra quality
-Cannot serve different market segments with different brands or prices
What are the alternatives to product pooling?
-Leverage substitution
-Common components
What is lead time pooling?
Delayed differentiation
What are the benefits of delayed differentiation?
-Easier to forecast total demand than the demand of each model
-Easier manufacturing process
-Lower overall inventory
-Lower value of in-transit inventory
What are the drawbacks of delayed differentiation?
-Requires investments to instal local capability at distribution centres
-Possible delays in responding to demand
What is capacity pooling?
Flexible manufacturing
What are the benefits of capacity pooling?
-Alleviating supply-demand mismatches
-Higher sales
-Higher capacity utilisation
What are the drawbacks of capacity pooling?
-More expensive tools/ equipment
-More setups
What is the impact of location pooling on pipeline inventory?
Location pooling has no impact on pipeline inventory as this depends on Little’s Law
