Week 1 & 2 - Supply Chain And Strategic Decisions Flashcards
Elements of Supply chain network (3)
- Suppliers > Manufacturer/assembler > distributor > retailer
- Suppliers to manufacturer is the physical flow
- Manufacturer/ assembler has information flowing to suppliers and distributors
Definition of supply chain management
Supply chain management encompasses the planning and management of all activities involved in sourcing and procurement, comversion and all logistics management activities
What is meant by Upstream supply chain?
Is the part of the supply chain that’s responsible for sourcing raw materials, procurement and operations
What is meant by downstream supply chain? (2)
- Is all about getting the final product to the end user
* Involves warehouse and inventory management, distribution and retail operations
What are the different functions of supply chain management? (5)
- Procurement management
- Operation management
- Logisitics management
- Planning
- Relationships management
What is procurement management?
Management of raw materials including quality and quantity
What is operations management?
Management of where products will be made, how they will be made and the batch sizes
What is logistics management?
Refers to warehousing and transportation of products
What is planning?
Involves anticipation of supply and demand uncertainties, volumes, inventory and network design
What is relationships management?
Refers to how all the companies in the supply chain work with each other
What are the Three C’s?
- Customers - needs seeking benefits at acceptable prices
- Competitors - assets and utilisation
- Company - assets and utilisation
Cost advantages in logistics and supply chain management (2)
- Economies of scale - enables fixed costs to be spread over a greater volume
- Increased efficiency and productivity - contributing to reduced unit costs
What is meant by Value advantage? (3)
- ‘customers don’t buy products they buy benefits’
- value advantage can be gained through product differentiation
- Value advantage can also be through customer service
Ways gaining a competitive advantage in supply chain (4)
- Service leader
- Commodity markets
- Cost leader
- Service and cost leader
What is a commodity market?
Tend to be more generic products and the cost is very similar to competitors prices e.g rice, eggs, milk etc
What is a service leader?
Don’t differentiate on cost but through customer service or brand image e.g Zara and Apple
What is a cost leader?
High cost advantage in the market but low value advantage e.g primark
Service and cost leader
High cost advantage and high value advantage e.g Samsung
Value advantage - logistics leverage opportunities (3)
- Tailored services
- Reliability
- Responsiveness
Cost advantage - logistics leverage opportunities (3)
- Capacity utilisation
- Asset turn
- Synchronous supply
Primary activities in the value chain (4)
- Inbound logistics
- Operations
- Outbound logistics
- Marketing and sales
Support activities in the value chain (3)
- Infrastructure
- Human resource management
- Technology development and procurement
Competitive advantage formula
Product excellence x process excellent
Customer value forumula (2)
- Perceived benefits / total cost of ownership
* Quality service / cost time
What is quality?
Is the functionality, performance and technical specification of the offer
What is a service?
A service refers to the availability of support and commitment provided to the customer
What is a cost?
Cost includes customer transaction cost, price and life cycle cost
What is time?
Is the time taken to respond to customer requirements e.g lead times
What are the guiding principles of successful supply chain management? (4Rs)
- Responsiveness
- Reliability
- Resilience
- Relationships
