Exam 3 - SCM

Important capabilities offered by SRM systems include:

Automation, Integration, Visibility, Collaboration Optimization.

ISO 14000

a family of standards for environmental management established by the International Organization for Standardization

reciprocation

a rule that states that we should repay others for what they have given us -birthdays thank you -favors -politics(support the bill/political favor) -sales and marketing(free gift/product samples) use of Social Pressures

ISO 9000 certification is described best by which of the following? a. A series of management and quality assurance standards in design development, production, installation and services b. A prerequisite for obtaining ISO 14000 certification c. Developed by the International Organization for Standardization for environmental compliance d. A series of purchasing standards developed by Toyota in the 1970s

a. A series of management and quality assurance standards in design development, production, installation and services

Customers and suppliers must develop stronger relationships and partnerships based on: a. A strategic perspective b. Simplification c. A tactical perspective d. The profit leverage effect

a. A strategic perspective

Which of the following is NOT a step suggested in the Supply Chain Sourcing Strategy Framework? a. Compare supplier prices based on the lowest cost bid. b. Prioritize items based on ethical and sustainability opportunities and ease of implementation. c. Establish corporate ethical and sustainable sourcing policies. d. Expand focus to include other departments and customers.

a. Compare supplier prices based on the lowest cost bid.

According to the text, which of the following is one of the most effective supply chain integrative techniques? a. Early supplier involvement b. Single integrator solution c. Counterpurchasing d. Process integration

a. Early supplier involvement

6 behaviors of buying under influence

(carlss) consistency authority reciprocation liking social proof scarcity

Supplier Evaluation and Certification

- A process to identify best and most reliable suppliers - Sourcing decisions are made on facts and not on perception - Frequent feedback can help avoid surprises and maintain good relationships - Suppliers should be allowed to provide constructive feedback to the customer

Criteria Used in Certification Programs

- No incoming product lot rejections (e.g., less than 0.5 percent defective) for a specified time period. - No incoming non-product rejections (e.g., late delivery) for a specified time period - No significant supplier production-related negative incidents for a specified time period - ISO 9000/Q9000 certified or successfully passing a recent, on-site quality system evaluation - Mutually agreed-upon set of clearly specified quality performance measures - Fully documented process and quality system with cost controls and continuous improvement capabilities - Supplier's processes stable and in control

Keys to Successful Partnerships

- strong supplier relationships - building trust - shared vision and objectives - personal relationships - mutual benefits and needs - commitment and top management support - change management(new partnerships) - several steps to ensure better change management ----identify internal champions ----internal communication ----train and survey impact/business reviews -information sharing and lines of communicatoin -relationship capabilities (right tech.) -performance metrics(you cant improve what you dont measure) -continuous improvement(small improvements over time) -monitoring suppleir relationships (creativity, stability, communication, reliability, value)

Buying under the influence (3 questions)

-1500 influence attempts each day -judgemental heuristics -simple rules that shorten the time to make decisions -can easily be exploited by people who know how they work such as ---car salesman (used cars) ---phone silicitors (old people falling for tricks ----children selling candy

ISO 9000

-Developed by International Organization for Standardization (ISO) - series of management & quality standards in design, development, production, installation, & service. -Companies wanting to sell in the global market seek this certification

ethical policies include

-decide where all purchased goods originated and made -know suppliers workplace principles -inclusion of ethics for performance rating -independent certification of vendor compliances -report of supplier compliance to stakeholders -provision of detailed ethical sourcing expectations to suppliers

strategic response options

-exploit (maximize the strength of current position and use it to leverage results) -Balance(maintain) -Diversity(move away from current and to better position)

Integrity in your decisions and actions value for your employer loyalty to your profession

-impropriety -conflict of interest -influence -responsibilities to your employer -supplier and customer relationships -sustainability and social responsibility -confidential and proprietary info -reciprocity -applicable laws, regulations and trade -professional competence

Organizations that successfully implement supplier relationship management can

-improve quality, -reduce cost, -access modern technologies from their suppliers, -increase speed to market, -reduce risk, and -achieve high performance.

ethical sourcing practices include

-promoting diversity -discontinuing purchases from firms that use child labor or others -buying from firms in underdeveloped nations

Sustainable Sourcing should focus on

-respecting human rughts & reducing poverty by profitable trading -working with the finite limits of planets resources -moving towards a low carbon economy

benefits from automating procurement activities

-significant cost savings as buyers move towards management processes by exception -greater procurement visibility from using SRM software

Obstacles to Process Integration Along the Supply Chain

-the silo mentality: reluctant to share info w/ employees of different division -Win/lose, poor supplier selection -NIH(not invented here) syndrome: avoid using or buying already existing products -relationships that rate on compatibility outperform others -SCM goals but align with firm goals -establish incentives -same values and similar goals -lack of trust -underestiamted trust -trust as one-way street -trust must be earned

5 Key Points of a SRM System (supplier relationship management)

1. Automation handles routine transactions 2. Integration spans multiple departments, processes, and software applications 3. Visibility of information and process flows 4. Collaboration through information sharing 5. Optimization of processes and decision making

The Weighted-Criteria Evaluation System

1. Select the key dimensions of performance mutually acceptable to both customer & supplier. 2. Monitor & collect performance data. 3. Assign weights to each of the dimensions. 4. Evaluate performance measures between 0 & 100. 5. Multiply dimension rating by weight & sum of overall score. 6. Classify vendors based on their overall score: Unacceptable, Conditional, Certified, & Preferred 7. Audit & perform ongoing certification review.

rights and duties

A theory stating that some actions are right in themselves without regard for the consequences.

Ethical Trading Initiative (ETI)

An alliance of organizations seeking to take responsibility for improving working conditions and agreeing to implement the ETI Base Code, a standard for ethical practices for the firms and its suppliers.

-professional competence

Develop skills, expand knowledge and conduct business that demonstrates and promotes the supply management profession -ethical standards -are skills, knowledge and attributes that are valued

Sustainable Sourcing should seek to

Grow revenues - new product intro Reduce costs - reduce resource efficiency Manage risk - link brand to social consciousness of consumer Build intangible assets - build responsibility

Standards in the ISO 9000 family

ISO9000:2015-basic concepts ISO 9001:2015 requirements QMS(qual man) ISO 9004:2009-more efficient and effective ISO 19011: guidance on internal and external audits

functional products

MRO(maintenance, repair and operations) items and other commonly low profit margins with relatively stable demands and high levels of competition

A company using a weighted-criteria evaluation system has established these 4 categories and the appropriate weight in parentheses: Reputation (0.20), Quality (0.35), Environmental (0.15), Cost (0.30). The scores for each category are shown below. Performance Measure Company A Company B Company C Reputation 75 70 75 Quality 80 90 85 Environmental 90 80 85 Cost 70 75 80

Multiply the dimension ratings by their respective importance weights and then sum to get an overall weighted score. Company A - (75 x .20) + (80 x .35) + (90 x .15) + 70 x .30) = 77.5. Company B - (70 x .20) + (90 x .35) + (80 x .15) + (75 x .30) = 80. Company C - (75 x .20) + (85 x .35) + (85 x .15) + (80 x .30) = 81.5.A company using a weighted-criteria evaluation system has established these 4 categories and the appropriate weight in parentheses: Reputation (0.20), Quality (0.35), Environmental (0.15), Cost (0.30). The scores for each category are shown below. Performance Measure Company A Company B Company C Reputation 75 70 75 Quality 80 90 85 Environmental 90 80 85 Cost 70 75 80 Answer: company C

supplier and customer relationships

Promote positive supplier and customer relationships -implement polices and procedures

Firms assess their sourcing capabilities because: a. Monitoring the purchasing function's performance, helps firms to continuously improve their products and processes b. Doing the right social and environmental things make economic sense c. They need to know the effect of external elements d. It allows them to maintain a variety of product options

a. Monitoring the purchasing function's performance, helps firms to continuously improve their products and processes

Transactional SRM: a. Tends to focus on short-term reporting and is event driven b. Focuses on long-term procurement strategies c. Helps organizations assess where they want to go in the future to meet their strategic purchasing goals d. Provides answers to questions such as: Which suppliers would make the company more profitable?

a. Tends to focus on short-term reporting and is event driven

A program used to celebrate the achievements of the best suppliers is: a. The Supplier Recognition Program b. The Supplier Development Program c. The Evaluation and Certification Program d. The Top Quality Management Program (TQM)

a. The Supplier Recognition Program

Which of the following do organizations use in supplier evaluation and certification processes? a. Tracking service quality b. Inventory turnover ratio c. Logistics d. Consumer sales

a. Tracking service quality

Green purchasing is a practice aimed at ensuring that purchased products or materials meet environmental objectives of the organization such as: a. Waste reduction b. Aggregate planning c. Hedging inventories d. Ride sharing

a. Waste reduction

supplier development

activity buying firm takes to improve a suppliers performance and/or capabilities to better meet its needs 1/2 identify products and suppliers not meeting requirements 3 form a cross-functional team 4. meet w/ top managing of supplier 5. rank supplier development projects 6. define detailed agreements 7. monitor status and modify strategies

Analytic SRM

allows the company to analyze the complete supplier base

utilitarianism

an ethical act creates the greatest good for the greatest # of people

influence

avoid behaviors that may negatively influence SCM decisions -employee policies -gifts -business meals -relationships -product samples -political matters -advertising -market power -specifications

Reciprocity

avoid improper reciprocal agreements -don't make agreements for favors in return

Which of the following is NOT important in developing a successful supplier partnership? a. Mutual/compatible needs that result in a win-win situation for the partners b. Annual sales knowledge of the supplier c. Open communication and information exchange d. Creating value for all participants

b. Annual sales knowledge of the supplier

A firm decides to intentionally increase purchases from ethnic minority businesses. This decision can be considered: a. Illegal b. Ethical Sourcing c. Unitarianism d. Unethical

b. Ethical Sourcing

Environmental supplier certification programs can assist companies by doing which of the following? a. Identifying companies who are the most popular with consumers b. Identifying rogue suppliers before they can cause problems or disruptions in their supply chains c. Encouraging distributive negotiations in strategic alliance development d. Helping communities who are in jeopardy of plant closures

b. Identifying rogue suppliers before they can cause problems or disruptions in their supply chains

The Amazon Kindle and Tesla's Model S automobile are two examples of: a. Radio Frequency Identification (RFI) products b. Innovative products c. Cyclical products d. Functional products

b. Innovative products

One of the most basic and successful approaches for protecting trade secrets is to: a. Contribute to innovations b. Require employees and vendors to sign a nondisclosure agreement c. Increase the supplier base d. All of these choices are correct.

b. Require employees and vendors to sign a nondisclosure agreement

Which of the following is NOT a step used in maintaining a successful strategic alliance program? a. Reward suppliers as performance merits b. Supplier managing inventory at customers' site c. Provide continuous evaluation of alliance performance, visibility and support d. Facilitate the dissemination of information

b. Supplier managing inventory at customers' site

Which of the following hastened many organizations' plans to institute better supply chain strategies in the recent past? a. The ban on Muslim people from a select group of countries b. The British vote to exit the EU c. Volkswagen Group installing a secret device in cars that allows them to cheat on emissions tests d. Donald Trump being elected President of the U.S.

b. The British vote to exit the EU

An important measurement used in supply base rationalization initiatives would include which of the following? a. The number of second-tier suppliers used by the supplier deliveries b. The suppliers' greenhouse gas emissions c. The number of trucks owned by the supplier d. The number of employees at the supplier

b. The suppliers' greenhouse gas emissions

Which of the following terms refers to an act that creates the greatest good for the greatest number of people? a. Multinational b. Utilitarianism c. Social sustainability d. Corporate responsibility

b. Utilitarianism

SCM relationship challenge

because the new millennium, needs to select, develop, and maintain the Supply chain relatioships for the benefit and gain of all parties involved

One benefit from benchmarking sourcing practices is: a. Lower prices of goods and services, use of fewer buyers and lower administrative costs b. Savings in energy consumption and materials, lower distribution costs, and improved corporate image among regulators, customers and community c. Firms can learn through others experiences the methods and tools that work the best d. Larger market for products, economies of scale in purchasing and production, and lower labor costs

c. Firms can learn through others experiences the methods and tools that work the best

When evaluating supplier performance, the cost of certifying and training suppliers, is part of which major cost category? a. Post-transaction costs b. Transaction costs c. Pre-transaction cost d. All of these choices are correct.

c. Pre-transaction cost

Which of the following is NOT a key area to focus on, in order to establish sustainable sourcing, as identified by a U.K. Food Industry Group on Ethical Trade? a. Work within the finite limits of the planet's resources b. Respect human rights and reduce poverty by creating profitable trading c. Procurement rationalization d. Move towards a low carbon economy

c. Procurement rationalization

____________ involves streamlining the processes and communications between the buyer and supplier using software applications that enable these processes to be managed more efficiently and effectively. a. Supplier Certification Program b. Corporate Social Responsibility c. Supplier Relationship Management d. Performance Measurement

c. Supplier Relationship Management

Hormel Food Corporation's No. 1 Award program differs from other programs because: a. Qualification for the award include green recovery criteria b. They provide cash incentives to the recipients c. The award is given out once every five years d. The award is given out bi-annually

c. The award is given out once every five years

A benefit to the firm for utilizing a supplier recognition program would be: a. Suppliers are more likely to lower their product costs b. It will increase the supply base c. The award recipients can serve as role models for a firm's other suppliers d. It will lead to the silo-effect

c. The award recipients can serve as role models for a firm's other suppliers

stage 5: improvement

choosing the right relationship (the minimum relationship needed) SCM relationship challenge obstacles to process integration along the supply chain trust communication compatibility (similarities in culture, financial practices, power, values) cooperation (SRM 'counter-parties to collaboration commitment (integration can't occur w/out it) collaborative relationships

In a recent U.S. retailer survey, _____ of respondents claimed their organizations were either currently enhancing their ethical sourcing capabilities or planned to do so in the future. a. 50% b. 80% c. 75% d. 92%

d. 92%

The term "benchmarking" as used in business firms is: a. A system of performance metrics that seeks to motivate suppliers to perform better b. A system of marking defective inbound inventory so it can quickly be identified for return to the supplier c. A program where suppliers compete for contracts, but those companies who are outbid are provided advice for winning future contracts d. A practice where companies attempt to learn and apply the best practices of other companies

d. A practice where companies attempt to learn and apply the best practices of other companies

According to the text, which of the following is TRUE? a. One result of an effective supplier certification program is an increase in the supplier base b. One of the most basic and successful approaches to protecting trade secrets is threat of litigation c. About 75% of companies recognize excellent performance with supplier awards and appreciation banquets d. About 50% of companies recognize excellent performance with supplier awards and appreciation banquets

d. About 50% of companies recognize excellent performance with supplier awards and appreciation banquets

Benefits for organizations that successfully implement supplier relationship management can include: a. Reduced costs b. Increased speed to market c. Improved quality d. All of these choices are correct.

d. All of these choices are correct.

Successful partnerships have the potential to: a. Create a competitive advantage for the firm b. Improve material flows between buyers and suppliers c. Contribute to innovations d. All of these choices are correct.

d. All of these choices are correct.

Which of the following can be a result of successful strategic supplier alliances? a. Better market penetration b. Access to new technologies and knowledge c. Higher return on investment d. All of these choices are correct.

d. All of these choices are correct.

The Ethical Trading Initiative (ETI) is: a. The largest and most visible international trade initiative dealing with the global rules of trade between nations. b. A group of organizations attempting to implement the SCOR model. c. An agreement to remove trade and investment barriers among the U.S., Canada and Mexico. d. An alliance of organizations agreeing to implement the ETI Base Code.

d. An alliance of organizations agreeing to implement the ETI Base Code.

SRM software allows buyers to focus on more strategic and value-added activities such as: a. Time utility b. Simplification c. Risk pooling d. Collaborative planning

d. Collaborative planning

Which of the following is NOT a key factor for developing a successful supplier partnership? a. Shared vision and objectives b. Information sharing and lines of communication c. Personal relationships d. Developing efficient processes that will remain unchanged for the duration of the partnership

d. Developing efficient processes that will remain unchanged for the duration of the partnership

Identifying and selecting environmentally and socially conscious suppliers is one trend followed by firms utilizing: a. Cloud-based forecasting b. The continuous review system c. Collaborative planning d. Ethical and sustainable sourcing

d. Ethical and sustainable sourcing

All of the following are important capabilities offered by SRM software EXCEPT: a. Automation b. Visibility c. Optimization d. Human Resource Management

d. Human Resource Management

For continuous improvement to succeed, employees must first: a. Be compensated for making suggestions b. Identify areas that are not working c. Understand transaction costs d. Identify areas that are working

d. Identify areas that are working

Which of the following should NOT be used as assessment criteria to evaluate the purchasing department's performance? a. Contributing to new product developments b. Participating in value engineering/value analysis efforts c. Optimizing the supply base d. Lowering inventory turnover rates

d. Lowering inventory turnover rates

Which of the following is a criteria generally found in certification programs: a. No negative income b. Planned order releases c. Non-disclosure agreements d. No incoming nonproduct rejections over a specified time

d. No incoming nonproduct rejections over a specified time

According to the text, which of the following two approaches are used in deciding whether or not an action is ethical? a. Supplier involvement and environmental performance b. Critical quality and corruption framework c. General Agreement on Tariffs & Trade (GATT) and leverage purchasing d. Utilitarianism and rights & duties

d. Utilitarianism and rights & duties

Consistency

desire to be consistent with what we have said or done in the past hobgoblin of little minds -automatic response -sales and marketing ("pin them down" -politics(petitions) -purchasing(signed purchase order) the pit in the stomach feeling i would do it again if i was to go back in time

conflict of interest

ensure personal or business do not conflict with lawful interests of your employer -potential conflics -guidance on conflicts -conflict of interest statements -secondary business/employer -personal business -investments -inside info -outside activites

green purchasing

ensures products or materials meet environmental objectives ex. waste reduction, hazardous material

ethical sourcing

is that which attempts to take into account the public consequences of organizational buying or bring about positive social change through organizational buying behavior

Corporate Social Responsibility (CSR)

is the practice of business ethics

Strategic Sourcing

managing the firm's external resources to support firm's long term goals

fair trade products

manufactured or grown by disadvantaged producer in a developing country

Social Proof

most powerful when observing people just like us -sales and marketing(testimonials) -consultants(client listings) 95% of people are imitators -doing what others are doing is ok -no one helps because they think others will -optimal when people are most vulnerable such as unsure about themselves, unfamiliar situations

-applicable laws, regulations, and trade

obey the letter and spirit of laws

scarcity

opportunities are more valuable when they are less available -rare value(collectors) -limited numbers(whether true or not) -time limits (deadlines/buy now or lose deal) IMPLICATIONS -children's reactance ---terrible twos -teens reactance ---Romeo and Juliet effect competition or a new scarcity that was there all along The joy is in the possessing of it not the process

trust

portrayed as a static element once achieve no further work fluid and dynamic developed over time, 1 situation at at time

impropriety

prevent the intent and appearance of unethical relationships, actions and communications -business professional -avoid negative impacts relationships in business

-confidential and proprietary info

protect confidential and proprietary info -contracts -products -organizational plans -wages salaries -make sure to mark confidential info

Modern goals include

reducing: -dependencies on foreign suppliers -delivery cycle times -carbon footprint Improving: -quality -customer service -ethical reputations

authority

saying "yes" to the person who looks like they have authority -structure keeps society together -types of authority (titles, size, status, clothing) -can create blind obedience -exploiting power ----politics - Nazis ----sales - the connotation of authority rather than real authority often overlooked tactics dress to play the part

-sustainability and social responsibility

social responsibility and sustainable practices in supply management -anti-corruption -diversity and inclusiveness -supply base -environment -ethics and business conduct -financial integrity and transparency -global citizenship

segmentation of suppliers

strategic suppliers(handful: can add long-term value) preferred suppliers(10-100:positively selected, managed and measured) regulated suppliers(10-10,000: greatest #, least value)

Sustainability

the ability to meet the current needs of humanity without compromising the ability of future generations to meet their needs 3p's People Planet Profit

business ethics

the application of ethical principles to business situations

strategic alliance

the goal: -maximize value co-creation assure availability nature of relationship: -high value co-creation potential -interdependent -long-term -teams -share resources -shares risks and rewards

Transactional Relationship

the goal: -minimize costs -assure availability nature of relationship: -low value co-creation value -arms-length -short-term transitionary minimal investments

-responsibilities to your employer

uphold responsibilities using reasonable care and granted authority to deliver value to employer

transactional SRM

used to track supplier interactions such as order planning, order payment and returns

liking

we prefer to say yes to people we like -physical attraction -similarity -compliments -familiarity ---sales-we buy because we like the brand or person(marry kay party) ---marketing through celebrities most of the time unconsciously responding