Week 7: Supply chain integration coordinated product and supply chain design Flashcards
Name the three characteristics of an efficient supply chain?
- Physical function
- Minimize costs and maximize smooth flow of goods
- Matches functional product
Name three characteristics of a responsive supply chain?
- Market mediation function
- Quickly react to changing market demands
- Matches innovative product
Name two elements of Fisher’s supply chain strategies?
- Supply chain should align with type of product
- Mismatch between two can cause problems
Name 8 elements of an efficient supply chain?
- Constant demand based on forecasing
- Long product life cycle
- Low contribution margin
- Allows for longer lead time
- Long-term suppliers
- Make-to-stock production
- Finished goods inventory
- Supplier selection focuses on low cost, on-time delivery, constant quality
name three elements of a push supply chain?
- Production and distribution based on long-term forecasts ( economies of scale)
- Manufacturing forecast is based on retail orders
- Varability of orders received from retailers is greater than variablity in customer demand
Name 8 elements of a responsive supply chain?
- Demand fluctuates based on customer orders
- Short product life cycle
- High contribution margin
- Shorter lead time, on quoted date
- Supplier depends on product life cycle
- Make-to order or assemble-to-order production
- Parts, components, subassembly inventory
- Supplier selection focuses on flexibility, fast delivery and high quality
What are the consequences of manufacturing forecasts based on retail orders?
- Longer time to react to changes in the market
- Potential obsolescence of inventory
What are the consequences of a greater variability in orders received from retailers than variability in customer demand?
- Larger safety stock levels
- Inefficient resource utilization due to uncertainty about whether to produce and transport for peak or average demand
- Higher production, transportation and inventory costs
What is the main characteristic of a pull supply chain strategy?
- Production and distribution driven by actual demand
- Firms operate without holding inventory, respond directly to customer orders
- Fast flow of information is key
Name three potential advantages of a pull supply chain strategy?
- Lower inventory levels and costs
- Improved resource utilization
- Reduced system costs
Name two potential disadvantages of a pull suply chain strategy?
- Not feasible when lead times are long
- No advantages of economies of scale
When should firms use a push-pull supply chain strategy?
- When production lead times are long and demand uncertainty is high
What is the push-pull boundary and its implications?
interface or point of transition between two supply chain strategies
- Push strategy is applied where economies of scale can be leveraged, and earlier stages of production can be prepared
- Pull strategy is applied when demand uncertainty is high, so operations are driven by realized demand rather than forecasts
What is a development chain?
- Focus on new or refined product design, sourcing decisions, internal capabilities and manufacturing approach
Name two considerations for the location of the push-pull boundary?
- If placed too close to customer: unnecessary (and costly) inventory
- If placed too far from customer: long lead times for customer
What are the three key considerations of a supply chain?
- Demand uncertainty and variability, the bullwhip effect
- Economies of scale in production and transportation
- Lead time, with additional considerations due to globalization
What are the three key considerations in a development chain?
- Technology clock speed, the rate at which technology evolves in a particular industry
- Make/Buy decisions, determining what to produce internally and what to source from external suppliers
- Product structure: terms of level of modularity and integrality within a product
What is a modular product?
product assembled from variety of modules, with several options available for each module
What is a modular process?
Each product undergoes a discrete set of operations, having semi-finished products inventory between operations. Products are differentiated by different subsets of manufacturing operations
What is part standardization?
the use of common parts to manufacture multiple products in order to reduce inventory levels and part costs. Excessive part commonality can limit product differentiation
What is process standardization?
start by producing generic or family product, which is then differentiated into specific products later in manufacturing process, which helps to address demand uncertainty for each product. Delayed differentiation can take place after the manufacturing stage
What is procurement standardization?
common equipment is used to produce different products. Procurement of equipment is therefore not dependent on demand for each individual product, which is particularly beneficial when equipment is costly.
What are the characteristics of mass production?
efficient, high volumes, limited variety of items
What are the characteristics of craft production?
high cost, low volumes, wide variety of items
What is mass customization?
building ability to customize large volume of products and deliver them at close to mass production prices. Delay product differentiation for specific customer until latest point possible in supply chain.
What two elements positively enable mass customization?
- Modular product and process design
- Agile supply network
