1: Supply Chain Management
Closed-loop supply chain
A manufacturer controls both the forward and reverse shipment of product.
make-to-order
A standard product design is used, but production of the final product is linked to the final customer's specifications
cross-docking
A technique whereby goods arriving at a warehouse from a supplier are unloaded from the supplier's truck and loaded onto outbound trucks, thereby avoiding warehouse storage.
Radio Frequency Identification (RFID)
A technology that uses radio waves to identify objects, such as goods in supply chains
strategic sourcing
Analyzing the procurement process to lower costs by reducing waste and non-value-added activities, increase profits, reduce risks, and improve supplier performance.
distribution strategy
Deciding whether to use centralized or decentralized distribution, and deciding whether to use the organization's own facilities and equipment for distribution or to use third-party logistics providers
network configuration
Determining the number and location of suppliers, warehouses, production/operations facilities, and distribution centers
measuring the supply chain ROI
Enables managers to incorporate economics into outsourcing and other decisions, giving them a rational basis for managing their supply chains.
vendor analysis
Evaluating the sources of supply in terms of price, quality, reputation, and service
product and service flow
Involves movement of goods and services from suppliers to customers as well as handling customer service needs and product returns
integrating IT
Produces real-time data that can enhance strategic planning and help businesses to control costs, measure quality and productivity, respond quickly to problems, and improve supply chain operations.
Delayed Differentiation
Production of standard components and subassemblies, which are held until late in the process to add differentiating features.
assemble-to-order
Products are assembled to customer specifications from a stock of standard and modular components
Disintermediation
Reducing one or more steps in a supply chain by cutting out one or more intermediaries
purchasing cycle
Series of steps that begin with a request for purchase and end with notification of shipment received in satisfactory condition.
vendor-managed inventory (VMI)
Vendors monitor goods and replenish retail inventories when supplies are low.
supplier certification
a detailed examination of the policies and capabilities of a supplier
responsive/ agile
a flexible supply chain that has the ability to quickly respond to changes in product requirements or volume of demand as well as adapt to supply chain disruptions
supply chain visibility
a major trading partner can connect to its supply chain to access data in real time
value chains
a term that reflects the concept that value is added as goods and services progress through the chain
supply chain strategy alignment
aligning supply and distribution strategies with organizational strategy and deciding on the degree to which outsourcing will be employed
inventories
are a key component of supply chain
supply chains
are lifeblood of any business organizations
supply chain managers
are people at various level of organization who are responsible for managing supply and demand both within and across business organizations
capacity planning
assessing long-term capacity needs, including when and how much will be needed and the degree of flexibility to incorporate
risk sharing
can mean contractual arrangements with supply chain partners that spread the risk
world class suppliers
certified suppliers are sometimes referred to as
receiving
checks incoming shipments of purchased items to determine whether quality, quantity, and timing objectives have been met, and it moves the good to temporary storage
avoidance
finding ways to minimize the number of items that are returned
lean supply chain
focuses on eliminating non-value-added activities to create an efficient, low-cost supply chain
business-to-business
growing portion of e-business
centralized purchasing
handled by one special department
data processing
handled by the accounting department, which keeps inventory records, check invoices, and monitors vendor performance
uncertainty and risk reduction
identifying potential sources of risk and deciding the amount of risk that is acceptable
flow management
important aspect of supply chain management
legal responsibilities
include being knowledgeable about laws and regulations of the countries where supply chain exist
ethical responsibility
include conducting business in ways that are consistent with the moral standards of society
economic responsibilities
include supplying product and services to meet demand as efficiently as possible
logistics management
includes management of inbound and outbound transportation, material handling, warehousing, inventory, order fulfilment and distribution, third-party logistics, and reverse logistics.
decentralized purchasing
individual departments or separate locations handle their own purchasing requirements
information technology
integrating systems and processes throughout the supply chain to share information including forecasts, inventory status, tracking of shipments, and events.
bullwhip effect
inventory oscillations become progressively larger looking backward through the supply chain
financial flow
involves credit terms, payments, and consignment and title ownership arrangements
risk management
involves identifying risks, assessing their likelihood of occurring and their potential impact, and then developing strategies for addressing those risks.
information flow
involves sharing forecast and sales data, transmitting orders, tracking shipments, and updating order status
Collaborative Planning, Forecasting, and Replenishment (CPFR)
is a contractual agreement used to achieve supply chain integration by cooperative management of inventory in the supply chain by major supply chain partners
recovery
is a function of the severity of the impact and the plans that are in place to cope with the event
location of inventories
is an important factor for effective material flow through the chain and for order fulfillment
ERP software
is an integrated system that provides for systemwide visibility of key activities and events in areas such as a supplier relationships, performance management, sales and order fulfilment, and customer relationships
greening the supply chain
is generating interest for a variety of reasons, including corporate responsibility, regulations, and public pressure.
accounting
is responsible for handling payments to suppliers and and must be notified promptly when goods are received in order to take advantage of possible discounts
managing the supply chain
is the process of planning, implementing, and controlling supply chain operations
reverse logistics
is the process of transporting returned items
demand chain
is the sales and distribution portion of the value chain
supply chain management
is the strategic coordination of business functions within a business organization and throughout its supply chain for the purpose of integrating supply and demand management.
third-party logistics
is the term used to described the outsourcing of logistics management
collaboration joint planning coordination
keys to supply chain success
operations
main source of requests for purchased materials, and close cooperation between these units and the purchasing department is vital if quality, quantity, and delivery goals are to be met.
supply chain
major source of risk
products and services
making decisions on new product and services selection and design
risk avoidance
means not dealing with suppliers in a certain area
being agile
means that a supply chain is flexible enough to be able to respond fairly quickly to unpredictable changes or circumstances, such as supplier production or quality issues
strategic partnering
occurs when two or more business organizations that have complementary products or services that would strategically benefit the others agree to join so that each may realize a strategic benefit
traffic management
overseeing the shipment of incoming and outgoing goods
strategic partnerships
partnership choices, level of partnering, and degree of formality
make-to-stock
production is based on a forecast, and products are sold to the customers from finished goods stock
engineer-to-order
products are designed and built according to customer specifications
order fulfillment
refers to the process involved in responding to customer orders
e-business
refers to the use of electronic technology to facilitate business transactions
risk reduction
replacing unreliable suppliers
`supplier code of conduct
requires suppliers to maintain safe working conditions, treat workers with respect and dignity, and have production processes that do not harm workers, customers, or the environment
purchasing department
responsible for obtaining the materials, parts, and supplies and services needed to produce a product or provide a service
gatekeeping
screening returned goods to prevent incorrect acceptance of goods
supply component
starts at the beginning of the chain and ends with the internal operations of the organization
demand component
starts at the point where the organization's output is delivered to its immediate customer and ends with the final customer in the chain
supply component demand component
supply chain has two components
value chains
supply chains are sometimes referred to as
resiliency
the ability of a business to recover from an event that negatively impacts the supply chain
event-response capability
the ability to detect and respond to unplanned events
purchasing interfaces
the connecting link between the organization and its suppliers
logistics
the part of a supply chain involved with the forward and reverse flow of goods, services, cash, and information
supply chain
the sequence of organizations - their facilities, functions, and activities - that are involved in producing and delivering a product or service
inventory velocity
the speed at which goods move through a supply chain
information velocity
the speed at which information is communicated in a supply chain
supplier forums
to educate potential suppliers about the organization's policies and requirements to enhance opportunities for receiving contracts
website order fulfillment
two essential features of e-business
gatekeeping avoidance
two key elements of managing returns
near-sourcing
using nearby suppliers shorten the supply chain
design and engineering
usually prepare material specifications, which must be communicated to purchasing
suppliers
work closely with purchasing to learn what materials will be purchased and what kinds of specifications will be required