Flashcards
13. Supply Chain Management
Cards in this deck (22)
- 1What is a supply chain?A supply chain is the system of organizations, people, activities, information and resources involved in moving a product or service from supplier to customer.
- 2What is the role of supply chain activitiesSupply chain activities transform raw materials and components (or personal skill / knowledge) into a finished product (or customer attribute) that is delivered to the end customer. So: Suppliers -> Transforming organization(s) -> Customers
- 3What is the role of supply chain managers?Supply chain management integrates suppliers, factories, warehouses and retailers, so that merchandise is produced and distributed effectively in the right quantities, to the right locations and at the right time, to minimize total cost subject to satisfying service requirements.
- 4Today's supply chain challenges→ Global supply chains with long lead times, and multiple levels
→ Rising and shifting customer expectations
→ Increases in labor costs in developing countries
→ Increase in logistics costs
→ Competitive advantages: Specialization vs. cost - 5Supply chains and logistics decisionsBusinesses should consider inventory levels and positioning, transportation choices, supplier choices, structure (number of facilities, number of stages) and distribution flows
- 6The role of supply chain strategy- Supply chain strategy considers both suppliers and buyers / customers; the number of suppliers, the relationship closeness, customer involvement and integration of all of these.
- 7Which are the supply chain strategies?1. Efficiency: Aimed at creating the highest cost efficiency
2. Quality: Aimed at providing the best goods or services
3. Speed: Aimed at providing the best goods or services
4. Reliability: Aimed at providing the goods or services the most consistently
5. Responsive supply chains: Aimed at being responsive and flexible
6. Risk-hedging supply chains: Aimed at pooling and sharing resources to share risk - 8A type of supply chainTraditional Dyad (arms length, competitive)
Traditional Analysis (Internal Supply Chains)
• Focus on single business operations
• Objective: Minimize total costs of production and distribution operation
• Constraints: Fixed customer locations and transport modes with networks
• Decision: How many sites and where positioned? - 9Location issues→ Proximity to customers: Makes rapid delivery easier
→ Business climate: Can include presence of similar-size businesses, businesses in the same industry, and other foreign companies
→ Total costs: Object is to minimize overall costs
→ Infrastructure: Adequate road, rail, air, and sea transportation along with energy and telecommunications - 10The factor-rating system- The factor-rating system is most widely used (easy and flexible) and a list of factors is already developed (quantitative and subjective). A range of possible points are assigned to each factors and each site is rated against each factor. The sums of assigned points for each site are computed. The site with the most points is selected.
- 11What do supply chains include generally? (as opposed to the traditional dyad)The traditional dyad considers the buyer and the seller.
More generally, supply chains include both suppliers and customers and the importance of partnering close relationships between the seller, buyer and customer - 12Vertical integration- Vertical integration – Asset control and power: A single company acquires as much of the supply chain as possible
→ Ford Motor Company in the 1920s bought suppliers of parts and raw materials, transport systems, and set up their own distributors to sell and service their cars. - 13Process view of a supply chainCycle view: Processes in a supply chain are divided into a series of cycles, each performed at the interfaces between two successive supply chain stages
• The cycle view clearly defines processes involved and the owners of each process. It specifies the roles and responsibilities of each member and the desired outcome of each process. - 14Types of cycles1. Customer order cycle (customer-retailer)
2. Replenishment cycle (retailer-distributor)
3. Manufacturing cycle (distributor-manufacturer)
4. Procurement cycle (manufacturer-supplier) - 15The push / pull view of supply chainsProcesses in a supply chain are divided into two categories depending on whether they are executed in response to a customer order (pull) or in anticipation of a customer order (push)
• Supply chain processes fall into one of two categories depending on the timing of their execution relative to customer demand:
1. Pull: Execution is initiated in response to a customer order (reactive)
2. Push: Execution is initiated in anticipation of customer orders (speculative)
• The push / pull boundary separates push processes from pull processes. - 16The effect of supply chain dynamics and supply chain performance- Supply chain dynamics can wreak havoc on supply chain performance measures; actions of downstream supply chain members can affect the operations of upstream members.
- 17The bullwhip effectThe phenomenon in supply chains whereby ordering patterns experience increase variance as you proceed upstream in the chain.
- 18Outsourcing (backward and forward integration)- Outsourcing: A make-or-buy decision is a managerial choice between whether to outsource a process or do it in-house. Outsourcing means paying suppliers and distributors to perform processes and provide needed services and materials
→ Backward integration is a firm’s movement upstream toward the sources of raw materials, parts and services through acquisitions.
→ Forward integration is acquiring more channels of distribution, such as distribution centers (warehouses) and retail stores, or even business customers. - 19Offshoring (and its pitfalls)- Offshoring is a supply chain strategy that involves moving processes to another country. Factors that influence the offshoring decision include: Comparative labor costs, labor laws and unions, logistics / transport costs, tariffs and taxes, communications.
→ Pitfalls of offshoring include: Loss of control, time lags, technology transfer, difficulties integrating business processes, cultural issue and that terms of trade (exchange rates, etc.) vary over time - 20Offshoring considerations1. Quality of labor: Educational and skills levels must match needs (services – communication skulls and understanding)
2. Suppliers: Proximity of important suppliers
3. Transportation systems: Frequency, cost, volume
4. Other facilities: Location of other facilities can influence a location decision
5. Free trade zones: A closed facility into which foreign goods can be brought without being subject to the normal requirements
6. Political risk: risks in both the country of location and the host country influence the decision
7. Exchange risk: Risks of currency fluctuations affecting costs / profits
8. Government barriers: barriers in many countries are being removed – ownership requirements, capital transfers in and out particularly
9. Trading blocs: Firms locate within a block to take advantage of new markets or lower total costs - 21New or old service facilities?New service facilities are far more common than new factories and warehouses. They are much less expensive and expansion / contraction more frequent.
- 22Service location: Considerations→ Multiple sites close to customers
→ Location decision closely tied to the market selection decision (who and where are closely linked)
→ Decision is more about maximizing profits than minimizing costs
→ Critical for many services is easy access (cost in time as well as money) and that location may be the main promotion done (visibility)
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- Business and Management 2A (Operations Management) Flashcards on 13. Supply Chain Management, created by Nina Olsson on 02/08/2018.
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