Chapter 1 SCM

Two ways to view processes performed in a cycle chain:

1. Cycle view 2. Push/pull view

Examples of operational decisions:

1. Allocate inventory or production to individual orders 2. Set a date by which an order is to be filled 3. Generate pick lists at a warehouse 4. Allocate an order to a particular shipping mode and shipment 5. Set delivery schedules of trucks 6. Place replenishment orders

All supply chain processes can be broken down into 4 process cycles:

1. Customer order cycle 2. Replenishment cycle 3. Manufacturing cycle 4. Procurement cycle

All supply chain processes can be classified into 3 macro processes:

1. Customer relationship management (CRM) 2. Internal supply chain management (ISCM) 3. Supplier relationship management (SRM)

A typical supply chain may involve a variety of stages, including the following: (5)

1. Customers 2. Retailers 3. Wholesalers/distributors 4. Manufacturers 5. Component/raw material suppliers

The supply chain operations reference (SCOR) model provides a description of: (3)

1. Description of supply chain processes 2. Framework for relationships between these processes 3. Set of metrics to measure process performance

Examples of planning decisions:

1. Making decisions regarding which markets will be supplied from which locations 2. Subcontracting of manufacturing 3. Inventory policies to be followed 4. Timing and size of marketing and price promotions

Examples of CRM: (5)

1. Market 2. Price 3. Sell 4. Call Center 5. Order Management

Examples of SRM: (5)

1. Source 2. Negotiate 3. Buy 4. Design Collaboration 5. Supply Collaboration

Examples of ISCM: (5)

1. Strategic planning 2. Demand planning 3. Supply planning 4. Fulfillment 5. Field Service

Five stages of supply chain:

1. Supplier 2. Manufacturer 3. Distributor 4. Retailer 5. Customer

Each process cycle consists of six subprocesses:

1. Supplier stage markets product 2. Buyer stage places order 3. Supplier stage receives order 4. Supplier stage supplies order 5. Buyer stage receives supply 6. Buyer returns reverse flows to supplier or third party

What are the three decision phases in a supply chain?

1. Supply chain strategy or design 2. Supply chain planning 3. Supply chain operation

When a customer makes a purchase online from Amazon, the supply chain includes: (4)

1. The customer 2. Amazon's website 3. The Amazon warehouse 4. All of Amazon's suppliers and their suppliers

Three main decisions of supply chain strategy:

1. What the chain's configuration will be 2. How resources will be allocated 3. What processes each stage will perform

Examples of strategic decisions:

1. Whether to outsource or perform a supply chain function in-house 2. Location and capacities of production and warehousing facilities 3. Products to be manufactured or stored at various locations 4. Modes of transportation to be made available along different shipping legs 5. Type of information system to be used

What is a supply chain?

A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request.

Aims to generate customer demand and facilitate the placement of tracking orders.

CRM

If a business fails to adapt its supply chain to a ____ and ____, it will hurt its performance.

Changing environment & customer expectations

Supply chain design, planning, and operation decisions play a significant role in the success or failure of a firm. To stay competitive, supply chains must adapt to _____ and _____.

Changing technology & customer expectations

A supply chain is dynamic and involves the ________ of information, product, and funds among different stages.

Constant flow

As we move from the ___ to the ___, the number of individual orders declines and the size of each order increases.

Customer & supplier

All processes at the interface between the firm and its customers.

Customer relationship management (CRM)

This view is useful when considering operational decisions because it specifies the roles and responsibilities of each member of the supply chain and the desired outcome for each process.

Cycle view

In the customer order cycle, ___ is external to the supply chain and thus is uncertain, while in all other cycles ___ is uncertain but can be projected based on policies followed by the particular supply chain stage.

Demand & order placement

What is supply chain management?

Effective SCM involves the management of supply chain assets and product, information, and fund flows to grow the total supply chain surplus.

The goal during the operation phase is to:

Exploit the reduction of uncertainty and optimize performance.

Companies start the planning phase with a ___ of the coming year of demand and other factors.

Forecast

Decisions in a supply chain fall into these three categories based on the ___ of each decision and the _____ during which a decision has an impact.

Frequency & time frame

The goal of supply chain operations is to:

Handle incoming customer orders in the best possible manner.

Aims to fulfill demand generated by the CRM process in a timely manner and at the lowest possible cost.

ISCM

With push/pull view, the process in a supply chain are divided into two categories, depending on whether they are executed _______ or ________.

In response to a customer order or in anticipation of customer orders

With pull processes, execution is initiated ____, while with push process, execution is initiated ____.

In response to a customer order; in anticipation of customer orders based on a forecast

The three macro processes manage the flow of __, __ and __ required to generate, receive and fulfill and customer request.

Information, product, and funds

Push processes are: (also called speculative)

Initiated & performed in anticipation of customer orders & operate in an uncertain environment because customer demand is not yet known.

Pull processes are: (also called reactive)

Initiated by a customer order & operate in an environment in which customer demand is known.

With cycle view, the processes in a supply chain are divided into a series of cycles, each performed at the ____________.

Interface between two successive stages of the supply chain

Because retailing in the U.S. is largely consolidated, _____ such as distributors does little to reduce costs as opposed to India, where they have millions of small retail outlets which limits the amount of inventory they can hold.

Intermediaries

All processes that are internal to the firm.

Internal supply chain management (ISCM)

Because operational decisions are being made in short term, there is _______ about demand information.

Less uncertainty

The objective of every supply chain should be to ____________.

Maximize the overall value generated

The goal of the supply chain planning phase is what?

Maximize the supply chain surplus that can be generated over the planning horizon given the constraints established during the strategic or design phase.

Most supply chains are actually ___, as several suppliers and distributors are involved.

Networks

Firms should structure a supply chain organization that mirrors the macro processes and ensures good communication and coordination among the _________.

Owners of processes that interact with one another.

The supply chain is a sequence of ___ and ___ that take place within and between different stages and combine to fill a customer need for a product.

Process & flows

Within each cycle, the goal of the buyer is to ensure ___ and to achieve ___ in ordering.

Product availability & economies of scale in ordering

Each stage in a supply chain is connected through the flow of ___, ___, and ___.

Products, information, & funds

For most profit-making supply chains, the supply chain surplus will be strongly correlated with ___.

Profits

This view is useful when considering strategic decisions relating to supply chain design because it categorizes processes based on the appropriate initiations and anticipations.

Push/pull view

Within each organization, such as a manufacturer, the supply chain includes all functions involved in ___ and ___ a customer request.

Receiving & filling

Aims to arrange for and manage supply sources for various goods and services.

SRM

The primary purpose of any supply chain is to _________ and _________.

Satisfy customer needs & generate profit for itself

The push/pull boundary in a supply chain _______.

Separates push processes from pull processes.

A firm must ensure that the supply chain configuration supports its ___ and increases the ___ during the supply chain strategy or design phase.

Strategic objectives & supply chain surplus

The higher the supply chain profitability, the more ___ the supply chain.

Successful

All processes at the interface between the firm and its suppliers.

Supplier relationship management (SRM)

The failure of many online businesses can be attributed to their inability to design appropriate supply chains or manage ____ effectively.

Supply chain flows

The time frame is weekly or daily with what phase?

Supply chain operation

The time frame considered is a quarter of a year with what phase?

Supply chain planning

During this phase, a company decides how to structure the supply chain over the next several years.

Supply chain strategy or design

Decisions are typically made for long term and are expensive to alter on short notice with what phase?

Supply chain strategy or design phase

Supply chain success should be measured in terms of ___ and not in terms of the profits at an individual stage.

Supply chain surplus

Supply chain surplus equation

Supply chain surplus = Customer value - Supply chain cost

For any supply chain there is only one source of revenue: ___.

The customer

What is supply chain profitability?

The difference between the revenue generated from the customer and the overall cost across the supply chain.

What is consumer surplus?

The difference between the value of the product and its price.

What is supply chain surplus (value)?

The difference between what the value of the final product is to the customer and the costs the entire supply chain incurs in filling the customer's request.

The detailed process description of a supply chain in the cycle view is useful when considering operational decisions because it clearly specifies _______.

The roles of each member of the supply chain