Week 2 - Supply Chain Analytics

Question 1

What is Supply Chain Analytics? (Kalaitzi and Tsolakis, 2022)

Answer 1

Are a set of capabilities and qualitative/quantitative techniques utilised to analyse traditional data and big data to inform decision-making in operations to achieve improved supply chain performance and competitive advantage

Question 2

Adoption factors in Supply Chain Analytics

Answer 2

Use the Technological, organisational, environmental (TOE) framework

Question 3

Technological factors in supply chain analytics

Answer 3

Involves the digitalisation of operations using IT systems which is necessary to enable visibility of supply chain flows

Question 4

Organisational flows in supply chain analytics

Answer 4

There is a need for computational power and equipment and the staff skills to apply data analysis techniques such as linear programming, simulation and machine learning

Question 5

Environmental factors in supply chain analytics (2)

Answer 5

• Uncertainty in the operational environment along with market volatility
• Dictate that supply chain actors need to implement analytics to generate insights over anticipated customer behaviour to enable organisational flexibility and match supply to demand

Question 6

5 Benefits of Supply Chain Analytics

Answer 6

• Improves organisational performance to help gain a competitive advantage by achieving transparency and visibility and close collaboration with suppliers
• Supply chain innovation can be achieved by accessing timely and meaningful data
• Improve the efficiency of internal and external processes, reduces inventory costs, reduced errors
• Enables resilience across the supply chain
• Enables sustainability by capturing and offering the correct information for decision-making on sustainability issues

Question 7

What are the two main elements of the supply chain?

Answer 7

• Physical flow
• Data flow

Question 8

What is the physical flow in supply chains? (2)

Answer 8

• Is the flow of the movement of goods from raw materials to finished product
• However may also occur due to product recalls, repairs, reuse, reassembly, remanufacture, repurpose, destroyed

Question 9

What are the data flows in supply chain?

Answer 9

This data can be transformed through analytics to support physical flows

Question 10

3 Challenges in Supply chains

Answer 10

• Very complex so must understand the impact each decision may have on the whole supply chain
• Each individual organisation is aiming to gain their own efficiencies and has different objectives
• Supply chains are dynamic

Question 11

What is the balance scorecard approach?

Answer 11

Is an approach to incorporate the interests of a broader range of stakeholders through performance measures across four perspectives financial, customer, business process and learning/growth

Question 12

Importance of the balance scorecard approach

Answer 12

Provides a way of translating strategy into action by serving organisational performance measures from strategic objectives

Question 13

What is the role of critical success factors in the balance scorecard?

Answer 13

To provide a guide to determine what needs doing well in order to implement a strategy and fulfil the organisational vision

Question 14

Example of deriving operational measures from strategic objectives:
Strategic level - CSF, Measure, Target
Operational level - Increase individual performance, measure, target

Answer 14

• Strategic level: increase individual performance (CSF), Staff productivity (measure), increase Availability by 5% (Target)
• Operational level: Sickness and absence process (Increase individual performance), Average days lost per year (measure), Reduction in days lost (Target)

Question 15

Supply chain operations reference model (SCOR)

Answer 15

Question 16

Level 1 of Supply chain operations reference model (SCOR) hierarchy (2)

Answer 16

• Major processes
• define the scope, content, and performance targets of the supply chain

Question 17

Level 2 of Supply chain operations reference model (SCOR) hierarchy (2)

Answer 17

• Process categories
• Defines the operations strategy, process capabilities are set

Question 18

Level 3 of Supply chain operations reference model (SCOR) hierarchy (3)

Answer 18

• Process elements
• Defines the configuration of individual processes
• Focus is on processes, inputs/outputs, skills, performance, best practises, and capabilities

Question 19

Level 4 of Supply chain operations reference model (SCOR) hierarchy (2)

Answer 19

• Improvement tools/activities
• Use of kaizen, lean, TQM, six sigma, benchmarking

Question 20

Supply-chain decision making framework (Chopra, 2019)

Answer 20

Question 21

Examples of logistical drivers (5)

Answer 21

• Production
• Storage and movement of goods
• Facilities
• Inventory
• Transportation

Question 22

Examples of cross-functional drivers (4)

Answer 22

• Every supply chain activity
• Information
• Sourcing
• Pricing

Question 23

6 Supply chain drivers

Answer 23

• Facilities
• Inventory
• Transportation
• Information
• Sourcing
• Pricing

Question 24

Role of Facilities - Supply chain drivers (2)

Answer 24

• Are the physical location in the supply chain where product is stored and made
• Firms can Increase responsiveness by increasing facility numbers making them more flexible or increase capacity

Question 25

Example metrics in facilities (6)

Answer 25

• Capacity - maximum processing amount
• Utilisation - amount of capacity in use
• Quality - amount of losses due to defects
• Flow time - processing time through the facility
• Product variety - number of different products processed
• Service Level - proportion of products completed on time

Question 26

Role of inventory - supply chain drivers (2)

Answer 26

• All the raw materials, work in progress and finished goods within a supply chain
• High levels of inventory can increase responsiveness

Question 27

Example metrics for inventory (3)

Answer 27

• Average inventory
• Average safety inventory - to avoid stock-outs
• Fraction time out of stock

Question 28

Role of transportation of supply chain drivers (2)

Answer 28

• Entails moving inventory from point to point in the supply chain
• Transportation responsiveness can be increased by faster transportation methods (e.g air), multiple warehouses

Question 29

Examples metrics for transportation (3)

Answer 29

• Average inbound/outbound transportation cost
• Average inbound/outbound shipment size
• Proportion transported by mode

Question 30

Role of information in supply chain drivers (2)

Answer 30

• Vital in ensuring the matching of capacity with demand e.g an airline using pricing to fill seats and using sales data for planning
• Information includes data and analysis concerning facilities, inventory, transportations, costs, prices and customers throughout the supply chain

Question 31

Example metrics for information (3)

Answer 31

• Forecast horizon - how far in advance the forecast is made
• Forecast error - the difference between the forecast and actual demand
• Variance from plan - difference between planned production values and actual values

Question 32

Role of sourcing - Supply chain drivers (2)

Answer 32

• Is the choice of who will perform a particular supply chain activity such as production, storage or transportation
• A company may have a mix of production facilities in high cost locations that are responsive and production facilities in low cost locations (e.g Zara)

Question 33

Example metrics for sourcing (4)

Answer 33

• Average purchase price
• Supply quality
• Supply lead time
• Percentage of on-time deliveries

Question 34

Example metrics for pricing (4)

Answer 34

• Profit Margin
• Day sales outstanding - average time between when a sale if made and when the cash is collected
• Average sales price
• Average order size

Question 35

6 steps for data analytics methodology for the supply chain (Tipi, 2021)

Answer 35

• Step 1 - data identification
• Step 2 - Data collection: though RFID devices, questionnaires and surveys
• Step 3 - Data preparation
• Step 4 - Data analysis
• Step 5 - Results validation and verification: model may be reconstructed, verified and validated
• Step 6 - Implementation of results

Question 36

3 Dimension of business analytics

Answer 36

• Domain - Area of application such as SCA, web analytics, financial analytics etc
• Orientation - Whether descriptive, predictive or prescriptive analytics
• Technique - which analytic technique is employed such as linear programming, simulation etc

Question 37

What is descriptive analytics?

Answer 37

This is the use of reports and visual displays to explain or understand past and current business performance

Question 38

What is predictive analysis?

Answer 38

is the ability to predict future performance to help plan for the future

Question 39

What is prescriptive analysis?

Answer 39

is the ability to recommend a choice of action from predictions of future performance

Question 40

What do descriptive models used for SCA include? (3)

Answer 40

• Data visualisation - Permits data to be summarised and easily understood
• Statistical analysis - the analysis can be extended by calculating moving average values to indicate sales trend
• Simulation

Question 41

What are predictive models used for SCA include: (4)

Answer 41

• Probabilistic - Bayesian network, Markov chain, Monte Carlo simulation
• Machine learning/data mining - artificial neural network, decision trees, clustering-based heuristics, support vector machines
• Statistical analysis - linear regression, multiple linear regression
• Simulation

Question 42

What are prescriptive models used for SCA include: (5)

Answer 42

• Probabilistic - Markov decision process
• Mathematical programming - linear programming
• Evolutionary computing - genetic algorithms
• Simulation - discrete even simulation
• Logic-based models - association rules, decision rules

Question 43

What is the difference between prescriptive models, predictive models and descriptive models?

Answer 43

• Descriptive models - Looks at what has happened, why it has happened and what is happening now
• Predictive models look at what might happen in the future
• Prescriptive models allow for the best course of action to be recommended