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Global Supply Chain Management > WEEK 2 > Flashcards

WEEK 2 Flashcards

1
Q

Name the six drivers to ashive strategic fit

A

Facilities, Inventory, Transportation (Logistics)
Information, sourcing, pricing (cross-functional drivers)

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2
Q

Goal of the drivers? Are they independet?

A

Increase supply chain surplus. Supplychain structure should sitibably deal with implied demand uncertainty.

The drivers are not independent. They interact with each other.

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3
Q

What is IKEAs SC tactic?

A

Low price, acceptible quality. Unsamble furnitures, low component varity.

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4
Q

Facilities. And the role in the supply chain?

A

The physical locations in the supply chain network where products is stored, assembled or fabricted.7

  1. Direct influence on the level of repsonsiveness.
  2. More facillites = less transpirtation costs but more facilities and inventory costs.

Example. IKEA vs Seven-Eleven

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5
Q

The three components of facillities decisions

A
  1. Capability
    - flexible or dedicated capacity?
    - product- or functional-focused facility?
    -cross-docking or storage?
  2. Location
  3. Capacity
  4. Facility-related metrics (processing time, quality losses, produt varity…)
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6
Q

Inventory and its role in supply chain?

A
  • To match supply and demand.
    All raw materials, work in process, and finised goods within a supply chain.

Role in the Supply Chain:
- Littles law
- Match the supply and demand
- Prodcuing in large quantaites to fullfill the future demand
- Increases the responsiveness!

Example: Amazon books.

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7
Q

What is Littles law?

A

I=DT

D= thoughout
T= material flow time
I= avarage inventory

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8
Q

What are the components of inventory decisions?

A
  • Cycle inventory
  • Safety inventory
  • Seasonal inventory
  • Level of product invenotry (can you promise?)
  • Inventory - related metrics avarafe (inventory, inventory turns, avarage safelty, seasonal invenotry)
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9
Q

Example of inventory

A

Amazon holds on avarage 100,000 units of books in stock

Sells 1000 a day

Little Law= 100,000/1,000=100 days on avarage in inventory

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10
Q

Transportation and role in supply chain?

A

Moves products between stages

Faster transportation = higher costs, but also higher level of responivness

Exmaple. Blu Nile uses FedEx

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11
Q

Components of transportatin decions

A
  • Design of transportation network
  • Choise of transportation mode
  • Transportation related metrics (avarage in-/outbound transportation costs, shipment size)
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12
Q

Information and role in supply chain?

A

Data and analysis concerning facilities, inventory, transportation, costs, prices and costumers thoughout the supply chain.

Role in the supply chain:
- Impoves utilization and coordination of supply chain assets and flows
-Increase responsiveness
-Reduce costs

For exmaple: Walmart is cross-docking, airlines has discounted flights. DHL centralized integrated system.

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13
Q

Components of information descions

A
  • Demand planning (clear time horizon)
  • Coordination sharing
  • Sales and operations planing
  • Information related metrics (forecast horizon, frequency of upates, forecasr error…)
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14
Q

What is sourcing and its role in Supply Chain?

A
  • To purchase goods
  • Responsive or efficent source (otherwise KFC case)
  • Internal source or third party
    Example Zara.
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15
Q

Components of sourcing decions

A
  • In-house or outsource
  • Supplier selection
  • Procurement
  • Source-relarted metrics (days payable, avarage purchase, price, supply clead time…)

Example: Boing 787 case

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16
Q

Pricing and its role in Supply Chain?

A
  • How much to charge the costumer
  • Influence costumer expectation
  • Match supply and demand
    Example: Amazone (diffrent shipping services)
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17
Q

Components of Pricing Decisions

A
  • Pricing and economies
  • Everyday low pricing vs high-low pricing (Appie vs Lidl)
  • Fixed price vs menu pricing
    -Source-related metrics (profit margins, pays sales outstanding…)
18
Q

Structuring drivers model

A

Competative Strategy —> Supply Chain Stategy —-> Drivers

19
Q

What is the role of distrobution in SC?

A

The steps taken to move and store a product from the supplier stage to the costumer stage in a supply chain. Key driver to profit.

Affects SC cost + costumer value

Tex.
raw materials from supplier–>manufacture, finnished products from manufactoe—>costumer

20
Q

Give example of distrobution in the cement industry. And successfull distrobutions:

A
  • Cement industry (India): Distribution cost is about 30% of production and sale.
  • The apparel retail industry: Distribution affects about 35% of the revenue.

Choise of distrobution can achive supply chain objectives from low cost to high responsiveness.

Walmart + Seven Eleven!

21
Q

Two phases of designing a distrobution network:

A
  • visulising the broad network (number of stages and their role)
    -specifying the details (location, capability, capacaty, demand allocation)

Examplr, new TV set implementation in Europe, where do you wany yo store and sell it? Mediamarkt?

22
Q

Example off companys and their distrobution network. P&G, Dell, HP, Gateway, Apple.

A

P&G:
-direct distrobution to large supermarkets
- extra stage when distrobutiong to small players

Dell: direct delivery to vostumer
HP: sale trhough retailers

Gateway: (direct delivery from factory) - bank rupt
Apple - sale through retailers

23
Q

Distrobution tactics for small vs. big players?

A

Smaller players has contacts more close by, however big players has huger transportation and therefore they can afford distrobution center closer by.

24
Q

What happened with Giant?

A

Had their wearhouse very far away, changed to have it in Lelystad.
Saved money on it in the end!

Restructer your network to keep up with the flactuating market.

25
Q

Give example on factors that influenced your distrobutuion network design.

A
  • Response time - barnes & noble stores
  • Product variety - amazon
  • Product avalibilty
  • Costumer experience
  • TIme to market
  • Order visability
  • Returnability -
26
Q

How do you evaluate the performance of a distrobution network?

A
  • Costumer value
  • Costs of meeting costumer needs
27
Q

What SC costs gets mainly affected when changing the distrobution network design?

A
  • Inventories
  • Transportation
  • Facillities and handeling
  • Information

(AKA the supply chain drivers)

28
Q

Make a picture of the distrobution network design graph. Describe:

A

y-axel - Required Number of facillities

x- axel - Desired responsetime

Graph goes down from y -axel to x-axel.

Depends on your compentition strategy. Customers with
longer response time
tolerance =
fewer number of
facilities.

Customers with
shorter response
time tolerance = larger number of
facilities.

29
Q

Describe the graph regarding the relation between inventory costs and number of facillites

A

Kolla bild.
Graph increases a lot in beginning and flattens out a bit more later on.

  • When you increase the number of facillities, the invenotry costs increaseas.
  • Firms try to combine their
    facilities to fewer number.

Tex. With a fewer numbers of
facility Amazon turns
inventory twice as frequently
as Barnes & Noble.
Amazon has less facilities, but Barnes & Nibles has more stores.

30
Q

Descibe the graph of the relation of facilities and transportation cost:

A

Transportation cost decreases among larger numbers of facillities.

HOWEVER:

The curve goes up after a while as there is more
need for transportation. The demand does not change. The small trucks gert exchanges to smaller trucks–> increases price.

It is a fine line!

31
Q

What factors influences the transportation costs?

A
  • Inbound transportation costs.
  • Outbound transportation costs.
32
Q

Outbound transportation costs per unit tend to be higher thaninbound costs, why?

A

Need smaller veichals - business looses economies of scale. Inbound can bring in a huge amount, however the stores cant store to much + chant drive huge trucks in the cities for exmaple.

33
Q

Drop-shipping

A
34
Q

Number of facillities and facility cost. Draw the graph of their relation.

A

Starts in the middle of the y -exes, increases more in the end.

Facility costs decrease as
the number of facilities is
reduced:
* Fixed cost due to installing
facility,
* Economies of scale with
fewer facilities.

35
Q

Total logistic cost?

A

Total logistics cost = inventory + transportaton + facilitiy cost

36
Q

Does having more facilities make sence?

A

It all depend on your compitative strategy to choose your
number of facillities. Check slide 19.

37
Q

Distribution network choices from the manufacturer to the end
consumer. There are two key decisions:

A
  • Will product be delivered to the costumer locastion or picked up from a prearagned site?
  • Will product flow through an intermediate location?
38
Q

There are 6 different design options for a distrobution network. Name these six. One of these may be used:

A
  1. Manufacturer storage with direct shipping,
  2. Manufacturer storage with direct shipping and in-transit merge,
  3. Distributor storage with carrier delivery,
  4. Distributor storage with last-mile delivery,
  5. Manufacturer/distributor storage with customer pickup,
  6. Retail storage with customer pickup
39
Q

Manufacturer storage with direct shipping. Write up the stages. Advantage + disadvanteges.

A

Product is shipped directly from manufacturar to the end costumer

Advantage: The retailer carries not inventory, manufacturer can postpone c

40
Q

3 steps towards a Zone of strategic fit

A

For a high level of performance, companies should move their competitive strategy (and
resulting implied uncertainty) and supply chain strategy (and resulting responsiveness) toward
the zone of strategic fit.

  • Assign roles to different areas of the SC to ensure an aropriate level of strategic fit. Depending on what your compatitave strategy is.
  • Last step is to find match SC responsiveness with the
    implied uncertainty from demand and supply.
41
Q

Manufactorstorage with direct shipping - describe inventory, transportation, facilities and handeling, information.

A

Inventory: Lower cost due to aggregation. Benefit if low demand, high valued products, costumized products.

Transportation: Higher costs due to increased distance and disaggregate shipping.

Facillities and handeling: Lower facillities costs due to aggreagtion. Saving handelung cost if manufactorer can handel small shipments from productionline.

Information: Significant investment in information infrastucture to intigrate manufactorer and retailer.

42
Q

LEARN THE OTHER ONES ON PAPER!

A

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Global Supply Chain Management (2 decks)

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