Topic 3 Flashcards
What is a supply chain?
A supply chain is the sequence of processes involved in converting raw materials into a final product and then distributing it to customers.
Types of business that is usually part if the supply chain.
The entities involved in the supply chain include producers, vendors, warehouses, transportation companies, distribution centers, and retailers.
What does procurement mean?
Procurement is the process of sourcing, purchasing, receiving, and inspecting all of the goods and services your business needs to operate – everything from raw manufacturing materials to software to office supplies. Explore solutions for procurement.
How Effective Procurement and Logistics Improve Business Efficiency
Effective procurement ensures that a business sources the right materials at the right time, in the right quantity, and at the best price. Logistics ensures these materials and finished products move efficiently through the supply chain. When both functions work well, they reduce delays, optimize inventory levels, and streamline operations, ultimately improving overall efficiency.
Impact of Procurement and Logistics on Unit Cost
Efficient procurement secures better pricing and quality materials, while effective logistics minimize transportation and storage costs. Together, they reduce expenses related to delays, wastage, and inefficiencies, which lowers the total cost per unit of production.
Benefits of Good Supplier Relationships in Supply Chain Management
A strong relationship with suppliers leads to better pricing, priority service, and improved reliability. Suppliers are more likely to offer discounts, flexible payment terms, and early access to new products or materials. This stability helps businesses maintain steady production and respond better to market demands.
Importance of Reducing Waste and Unnecessary Costs in the Supply Chain
Minimizing waste and unnecessary costs enhances profitability and sustainability. It reduces excess inventory, transportation inefficiencies, and material wastage, leading to lower operational expenses. Efficient cost management makes a business more competitive by allowing it to offer better prices or invest in growth opportunities.
What is meant by ‘job production’?
Job production is a manufacturing process where a single product is made individually, often customized to meet specific customer requirements. Each product is unique, and production is typically labor-intensive.
What is meant by ‘flow production’?
Flow production is more efficient and cost-effective because it benefits from economies of scale, leading to lower unit costs and higher production speed.
What Does ‘Lean Production’ Mean?
Lean production is a production approach focused on minimizing waste and maximizing efficiency. It aims to reduce excess inventory, time delays, and unnecessary costs while maintaining high-quality output.
Example of a Product Made by Flow Production
Cars produced on an assembly line, such as those made by Tesla or Toyota.
What is Meant by a Just-in-Time (JIT) Production Method?
Just-in-time (JIT) is a production strategy where materials and components are ordered and received only when needed, reducing inventory costs and waste. This method helps businesses operate more efficiently but requires a reliable supply chain.
Why a Business May Prefer a Just-in-Case (JIC) Approach Over JIT
A business may choose a Just-in-Case (JIC) approach to ensure it always has stock available, reducing the risk of supply chain disruptions. This is particularly useful for businesses facing unpredictable demand, unreliable suppliers, or long lead times.
Three Reasons Why Good Quality Products Benefit a Business
Customer Satisfaction & Loyalty – High-quality products lead to happy customers who are more likely to return and recommend the business to others.
Stronger Brand Reputation – A reputation for quality helps attract new customers and differentiate the business from competitors.
Reduced Costs & Returns – Fewer defective products mean lower costs associated with refunds, replacements, and complaints.
Two Costs Associated with Maintaining Quality Standards
Inspection & Testing Costs – Regular quality checks and testing require time, staff, and specialized equipment.
Training Costs – Employees need ongoing training to maintain high-quality standards in production and service.
Advantage of Spotting Quality Problems in the Production Process
Detecting quality issues early prevents defective products from reaching customers, reducing waste, rework costs, and potential damage to the company’s reputation.
What Does TQM Stand For? And What Does It Involve?
TQM (Total Quality Management) is a business philosophy that focuses on continuous quality improvement across all areas of an organization. It involves employee involvement, process optimization, and customer focus to ensure high-quality output.
One Advantage of TQM
Improved Efficiency – By continuously improving processes and reducing waste, businesses can operate more efficiently and lower production costs.
One Reason a Growing Business May Struggle to Maintain High Quality Standards
Scaling Challenges – As a business expands, maintaining consistent quality across multiple locations, suppliers, and production lines becomes more difficult, increasing the risk of errors.
Steps in a Sales Process
Identifying Potential Customers (Prospecting) – Finding and targeting potential buyers.
Approaching the Customer – Engaging with the customer to understand their needs.
Presenting the Product or Service – Demonstrating how the product meets the customer’s needs.
Handling Objections – Addressing any concerns or questions the customer may have.
Closing the Sale – Finalizing the transaction and confirming the purchase.
Follow-up and After-sales Service – Ensuring customer satisfaction and encouraging repeat business.
Why Good Product Knowledge Helps Sales Staff Provide Good Customer Service
When sales staff understand the features, benefits, and uses of a product, they can confidently answer customer questions, recommend suitable products, and build trust with customers, leading to a better overall experience.
One Way Sales Staff Can Engage Positively with Customers
Active Listening – By genuinely listening to customers’ needs and concerns, sales staff can provide more personalized recommendations and create a positive buying experience.
Why Good Customer Service is Important for Customer Loyalty
When customers receive excellent service, they feel valued and are more likely to return. Satisfied customers are also more likely to recommend the business to others, leading to long-term profitability.
How Poor Customer Service Can Lead to a Big Fall in Revenue
Unhappy customers may stop buying from the business and share negative reviews, damaging the company’s reputation. This can result in lost sales, reduced customer trust, and difficulty attracting new buyers.
