w7 - Measurement and Analysis Flashcards
Process Improvement
What is Supply Chain Management?
A set of approaches used to efficiently integrate suppliers, manufacturers, warehouses, and stores to minimize costs while satisfying service level requirements.
What are the key steps in a supply chain?
- Raw material manufacturing (e.g., petrochemical processing, chemical manufacturing)
- Intermediate suppliers (e.g., plastic container production, packaging manufacturing)
- Final product manufacturing
- Distribution centers
- Retail stores
- Customer purchase
What is the difference between traditional and contemporary supply chain management?
- Traditional: A network of connected entities managing the flow of materials, information, and finances.
- Contemporary: A collaborative partnership to create value for customers and partners, focusing on a holistic approach.
Why is supply chain management challenging?
- Complex interdependencies with product development, finance, and marketing.
- Requires system-wide optimization with trade-offs.
- Presence of uncertainties and risks at every point (e.g., quality risk, disruption risk).
What are the classifications of global supply chains?
- Domestic supply chains
- International distribution
- International suppliers
- Offshore manufacturing
- Fully global supply chains
What are the risks associated with global supply chains?
- Operational risks: Quality risks, process non-conformance, logistical disruptions.
- Strategic risks: Misaligned incentives, data security, regulatory issues.
- Financial risks: Currency fluctuations, contract defaults.
What are strategies to manage risks in global supply chains?
- Closer coordination and partnerships
- Gaining local knowledge through collaborations
- Creating slack to buffer against disruptions
- Enhancing advanced sensing mechanisms
- Building flexibility and agility
What are the pillars of a supply chain strategy?
- Supply chain competencies (e.g., cost efficiency, responsiveness)
- Supply chain processes (e.g., coordination, quality control)
- Resource allocation (e.g., technology, partnerships)
- Basis of product competitiveness (e.g., positioning and differentiation)
What are the differences between functional and innovative products?
- Functional: Low customization, low risk of obsolescence, predictable demand, long product life cycle.
- Innovative: High customization, high risk of obsolescence, unpredictable demand, short product life cycle.
How does product type affect supply chain strategy?
- Functional products require cost-efficient supply chains.
- Innovative products require responsive and flexible supply chains.
- Functional products benefit from process standardization.
- Innovative products require slack capacity for adaptability.
What are the characteristics of an efficient supply chain?
- Low cost
- High-volume production
- Standardized production
- Low logistics costs
- High inventory turnover
What are the characteristics of a responsive supply chain?
- Flexibility is prioritized over cost reduction.
- Supplier selection based on speed and adaptability.
- Inventory buffers are maintained.
- Short lead times are critical.
- Product differentiation is delayed to allow customization.
What is the ‘Triple A’ supply chain model?
- Agility: Ability to respond to short-term changes.
- Adaptability: Ability to sense and adapt to long-term changes.
- Alignment: Ensuring all supply chain partners work toward shared goals.
What are strategies to build an agile supply chain?
- Promote information flow
- Develop collaborative relationships
- Design for postponement
- Build inventory buffers
- Establish dependable logistics systems
- Implement contingency planning
What are the key elements of supply chain alignment?
- Free information exchange with vendors and consumers
- Long-term partnerships over transactional relationships
- Clearly defined roles and responsibilities
- Equitable risk, cost, and benefit sharing
What are the types of supply chain contracts?
- Wholesale price contracts: Basic agreement where the retailer bears demand risk.
- Buyback contracts: Manufacturer agrees to repurchase unsold goods.
- Revenue-sharing contracts: Manufacturer and retailer share revenue and risks.
What is the formula for the optimal order quantity (Q*) in a wholesale price contract?
Q* = Mean demand (q) + z * [(Retail price - Wholesale price) / Retail price] * Standard deviation (s)
What are the primary decision factors influencing supply chain design?
- Cost of products
- Lead time of delivery
- Quality importance
- Frequency of product redesign
- Industry clock speed
- Product life cycle stage
What are the main strategies to build supply chain adaptability?
- Monitor global markets and supply sources
- Listen to consumer needs and trends
- Develop flexible product designs
- Implement flexible manufacturing processes (e.g., CAD/CAM/CNC)
What are the common reasons for misaligned supply chain incentives?
- Hidden actions: Unobserved changes in production or inventory levels.
- Hidden information: Lack of transparency in costs and market trends.
- Poorly designed incentives: Overemphasis on one metric (e.g., sales volume over profitability).
