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Global Supply Chain > Week 1 > Flashcards

Week 1 Flashcards

1
Q

What is a supply chain?

A
  • A set of organisations
  • managing movement of flows: information, products, and funds
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2
Q

What is supply chain management?

A
  • coordinate suppliers, manufactures, and stores
  • guarantee customers satisfaction
  • maximize profits or service level
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3
Q

Direct Sale

A
  • supplier -> assembly plant -> customer
  • through website or own store
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4
Q

Indirect Sale

A

through retailers (ex. Media Markt)

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5
Q

To maximize SC surplus (equation)

A

SC surplus = consumer value - SC cost

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6
Q

Consumer surplus

A

consumer value- price

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7
Q

SC profability

A

price- SC cost
- total profit to be shared across al stages of the supply chain
- measured by total profitability, not profits at individual stages

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8
Q

Consumer value

A

the maximum amount the consumer is willing to pay for a product

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9
Q

Objective of SC

A

increase total SC profitability

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10
Q

Decision Phases in SC

A
  • strategy or design
  • planning
  • operation
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11
Q

Strategy or Design

A
  • how to structure the SC over next couple years
  • long-term
  • expensive to reverse
  • must take into account market uncertainty
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12
Q

Strategy or Design Decisions (ex.)

A
  • whether to outsource or preform in-house operations
  • locations and capabilities of facilities
  • production to be made or stored at various locations
  • modes of transportation
  • information systems
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13
Q

Planning

A
  • decisions over next quarter or year
  • goal: maximize SC surplus over the planning horizon
  • must be considered:
    — demand uncertainty
    — exchange rates
    — competition over time horizon
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14
Q

Planning decisions (ex.)

A
  • which markets to be supplied from which locations
  • subcontracting, backup locations
  • inventory polices
  • timing and size of market promotions
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15
Q

Operation decisions

A
  • daily or weekly decisions
  • goal: to maximize SC surplus over the planning horizon
  • supply chain configuration is fixed and operating policies are determined
  • less uncertainty (short- term horizon)
  • must be considered
    — demand uncertainty
    — exchange rates
    — competition over time horizon
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16
Q

Operations decisions (ex.)

A
  • allocation orders to inventory or production
  • set delivery schedules
17
Q

SC views

A
  • SC is a sequence of processes
  • cycle view
  • push/pull view
18
Q

Cycle view

A
  • customer ↓ customer order cycle
  • retailer ↓ replenishment cycle
  • distributor ↓ manufacturing cycle
  • manufacture ↓ procurement cycle
  • supplier
  • each cycle consists of 6 smaller sub-processes
19
Q

Cycle view sub-processes

A
  • supplier markets product
  • buyer places order
  • supplier receives order
  • supplier supplies order
  • buyer receives supply
  • buyer returns reverse flows
    (buyer and supplier are relative terms)
20
Q

Push/Pull view of SC

A

push or pull depends on the timing of the SC

21
Q

Pull

A
  • execution is initiated in response to a customer order
  • expensive items which are customisable
22
Q

Push

A
  • execution is initiated in anticipation of customer orders: based on forecasts rather than actual demand
  • commonly used items (milk)
  • same exact product produced
23
Q

Push/Pull boundary

A
  • goal: identify an appropriate boundary such that SC can match supply and demand effectively
  • small items are produced beforehand so everything is not made from scratch after the order (ex. cars)
24
Q

Push/Pull Cycle

A
  • Push Processes:
  • Supplier ↓ procurement cycle
  • manufacturer ↓ replenishment cycle
  • Pull Processes (customer order arrives)
  • Store ↓ customer order cycle
  • customer
25
Q

Competitive Strategy

A

defines, relative to its competitors, the set of customer needs that it seeks to satisfy through its products and services
ex. large variety or products, delivery times, online/stores

26
Q

Value Chain

A

all the functions in the value chain have their own strategy in order to execute the company’s strategy
new product development → marketing and sales → operations → distribution → service

27
Q

Supply Chain strategy

A

defines the nature of all the functions, specifies what each function should do particularly well
includes design decisions on inventory, transportation, operating facilities, and information flows

28
Q

Achieving Strategic fit

A

the competitive and supply chain strategies must have aligned goals
supply chain design, process and operations should support these goals
ex. if they market quick delivery, transportation must be quick as well

29
Q

Demand uncertainty products

A

Innovative products
ex. phones → changes in trends, outdated models, popularity

30
Q

Demand certain products

A

functional products that are will always be used, stable demand
ex. salt, milk

31
Q

Implied demand uncertainty

A

how supply can react to uncertain demands
ex. quantities initially supplied, response time, product variety, availability, price, rate of innovation
AH immediately restocks empty shelves while Aldi waits for next delivery

32
Q

Supply Uncertainty

A

electricity is a functional production but supply may have breakdowns
fashion is an innovative product but supply is stable
stable: manufacturing process is mature and established
evolving: manufacturing process is in early development and rapidly changing

33
Q

SC responsiveness includes ability to

A

respond to wide range of quantities demanded
meet short
deliver quickly
handle large variety of products
build highly innovative products
high service level
handle supply uncertainty

34
Q

Disadvantages of high response times

A

higher costs in transportation, not constantly using all resources (trucks)

35
Q

The responsiveness spectrum

A

production scheduled every couple of
months: steel
weeks: clothing, automotive parts
several times a day: &eleven

36
Q

Efficient/responsive and function/Innovative matches

A

Efficient and Functional
Responsive and Innovative

Global Supply Chain (9 decks)

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