Supply Chain Management and Logistics
Supply chains have three structural dimensions:
horizontal, vertical, and the horizontal position of the focal company within the end points of the supply chain.
What supply-chain characteristic is essential for firms that strive to deliver goods to consumers as quickly and inexpensively as possible?
Efficiency
Use of intermediaries helps?
Everyone benefits because the intermediaries' financing costs are lower than the vendors' costs. Although such an arrangement requires trust and commitment on the part of suppliers, financial intermediaries, and manufacturers, it is a powerful way to align the interests of companies in supply chains.
Which of the following best increases product value for customers?
Firms effectively managing value chain activities
What does process mapping primarily enable a firm to do?
Analyze process inputs, outputs, and relationships
What is a key goal of process mapping?
-Improving processes to add value for customers -used to locate process flaws that are creating systemic problems. -enable analysis of the inputs, outputs and inter-relationships of each process to understand how processes interact in a system.
Supply-chain management (SCM) It has three principal components:
(a) creating the supply-chain network structure, (b) developing supply-chain business processes, and (c) managing the supply-chain activities.
How do the activities in the value chain contribute to end-customer loyalty and satisfaction?
-by focusing on the interrelated links in its value chain, a company can increase product quality, provide better service, and cut prices. In other words, it can improve its quality-service-price mix, thereby making its products more competitive. -also the sustainability nature of this mix. --The customer demand to know this information and choose products based on the information is another key component in supply chain management.
Variance may arise out of
-delays in expected time of customers orders -unexpected distractions of goods arriving damaged in a customers location -delivery to an incorrect location
The value chain analysis allows the firm to
-determine which parts of its operations create value and which do not. Knowing these issues is critical -Knowing these issues is critical because the firm earns above-average profits only when the value it creates is greater than the costs it incurs to create that value.
For companies competing on the basis of customer intimacy or product leadership, a focus on
-efficiency is not enough—agility is a key factor. -must be able to add and delete products and services as customer needs change;
by successfully managing its supply chain
-firm can produce better-quality products at lower cost and distribute them more effectively
What steps are in value chain?
-in the process of supply chain management—obtaining raw materials, manufacturing products, getting finished goods to customers and -Others take place outside the supply chain, particularly those associated with marketing and selling products and with providing customer support. -In addition, companies need to find ways of creating value by improving the internal operations—procurement, research and development, human resource management, and financial management—that support their primary value chain activities.
Total Quality Management (TQM)
-major forces witch contributes to logistics -reworking a customer's order sue to incorrect shipment or due to in transit damage is more costly than performing it right the first time
Companies that compete primarily on the basis of operational excellence typically focus on
-typically focus on creating supply chains that deliver goods and services to consumers as quickly and inexpensively as possible. -They invest in state-of-the-art technologies and employ metrics and reward systems aimed at boosting supply chain performance.
competitive advantage increasingly depends on integrating eight key supply chain processes—
1-customer relationship management, 2-customer service management, 3-demand management, 4-order fulfillment, 5-manufacturing flow management, 6-procurement 7-product development 8- commercialization, and managing returns—into an effective value delivery network
Which of the following facilitates supply-chain alignment?
Creating relationships based on shared risks and rewards
What is true of a company's value chain?
A company must monitor and improve its value chain to deliver high customer value.
What supply-chain characteristic is essential for firms that must be able to add or eliminate products when customer needs change?
Agility
is the key factor that companies competing on the basis of customer intimacy or product leadership should focus on. Customer-intimate companies must be able to add and delete products and services as customer needs change.
Agility
What is the fastest freight carrier? and cheapest
Air- but very expense, 10 times as much by air verse sea ship- but slow
maximize the supply chain's performance.
Aligning the interests of all the firms in a company's supply chain to the company's own interests is an important factor
In most firms, which of the following is responsible for process mapping?
Cross-functional teams
What is the best way for firms to identify core and supporting processes?
Documenting all information and material flows
How can companies achieve a sustainable competitive advantage?
By aligning their supply-chain infrastructure with their underlying value proposition
How can a company make its products more competitive?
By providing the consumers with better service
GHB Corp. wants to cut down on transportation costs when delivering its consumer goods. It has been established that time is not a constraint for the delivery of these goods. Also, the destination locations are well connected by flights, roadways, railways, and waterways. In this case, which of the following modes of transport is GHB most likely to use?
Cargo shipping
Which of the following primarily helps firms to deliver the highest customer value?
Conducting a value chain analysis
When aligning a supply chain, what primarily helps prevent conflict?
Defining partner responsibilities
Which component of SCM focuses on the activities that produce a specific output of value to customers?
Developing supply-chain business processes
Which term refers to the position a firm occupies within a supply chain?
Horizontal position
Which term refers to the number of tiers across the supply chain?
Horizontal structure
How does process mapping primarily help a firm?
Identifying and correcting process flaws
What is the most difficult aspect of process mapping for most firms?
Identifying and improving core processes
What is the most common first step in process mapping?
Identifying core and supporting processes
What is the primary benefit of supply-chain alignment?
Improving supply chain performance
What is most necessary to create competitive advantage in today's supply chains?
Integrating key supply-chain processes
What is the primary goal of SCM?
Integrating production and distribution activities to create value for consumers
Which of the following best describes a supply chain?
Interconnected networks and businesses that work together to create a product
What is the flow and storage of materials throughout the acquisition process?
Logistics
Which term best describes activities that occur after a product is finished, such as selecting distribution outlets and responding to product orders?
Logistics management
What is the first step in creating supply-chain alignment?
Making data available to all firms
What is the disadvantage of cargo ships as a mode of transport?
Many markets are not accessible by water.
What are the components of the customer value triad?
Price, service, and quality
Which two terms best describe members of a supply chain?
Primary and supporting members
Which process is used as a starting point in terms of defining and understanding an organization's processes?
Process mapping
Which products are most consumers likely to select?
Products that provide the best price, service, and quality
Identify the activity involved in delivering value to customers which takes place outside the supply chain.
Providing customer support
Which of the following is most likely provided by a primary member of a supply-chain network?
Raw materials
Most people buy the product that gives them the
highest value, and they usually determine value by considering the three factors that many marketers call the customer value triad
Which would be the primary member of a company's supply-chain network structure?
Strategic business units that carry out value-adding activities
What is SCM?
Supply Chain management
Which term refers to the interconnected networks and businesses that are involved in creating a product?
Supply chain
Which of the following is a new and increasingly important factor in the value chain?
Sustainability
What is the purpose of using Gantt charts?
TThey allow the supply chain managers to make sure all pieces of the product are available by the time the actual production process begins.
Wilson Watch Company strives to deliver its products to consumers as quickly and inexpensively as possible. The firm uses metrics and reward systems to boost supply-chain performance. Which statement about Wilson Watch Company is most likely true?
The firm competes primarily on the basis of operational excellence.
Which statement is true about the supply-chain network structure?
The supply-chain network structure consists of member firms and the links between these firms.
Which transportation method is most commonly used for shipping products?
Trucks
Process mapping is
a good place to start in terms of defining and understanding an organization's processes. -Managers need to define, understand, and improve those processes that are most essential to their strategies and customer value proposition, support the mission, and contribute to improving the bottom line.
Cross-functional teams
a team of people familiar with the process will be assigned to map it; they may come from many parts of the organization -begin by taking a "high-level" view of the major core processes and then breaking those core processes into the sub-processes and sub-sub-processes.
product leadership companies must be able to
adapt their supply chains to changes in technology and to capitalize on new ideas.
growing faster than any other transportation mode
air
Primary members of a supply chain include
all autonomous companies or strategic business units that carry out value-adding activities in the business processes designed to produce a specific output for a particular customer or market.
logistics is considered
an essential operational activity for cost reduction and improved customer service
The objectives of RL (reverse logistics)
are cost reduction, environmental benefits and source reductions"
Ways companies align their partners' interests with their own is
by redefining the terms of their relationships so that firms share risks, costs, and rewards equitably. -involves the use of intermediaries,
Supporting members are
companies that simply provide resources, knowledge, utilities, or assets for the primary members of the supply chain -include those that lease trucks to a manufacturer, banks that lend money to a retailer, or companies that supply production equipment, print marketing brochures, or provide administrative assistance.
Activities involved in supply chain management include
designing, planning, controlling, and leveraging logistics, as well as making sure the supply chain creates value to the ultimate user—the customer.
The components of supply management include
disposition/investment recovery, distribution, inventory control, logistics, manufacturing supervision, materials management, operations, packaging, procurement/purchasing, product/service development, quality, receiving, strategic sourcing transportation/traffic/shipping, and warehousing/stores.
Typical logistics activities
inbound and outbound transportation, warehousing, fleet management, materials handling, order fulfillment, demand planning, and management of third-party logistics providers.
Some examples of processes
include order fulfillment, supplier selection, and contract management.
Logistics management,
includes the "management of all activities that take place after a product is finished and approved for shipping, including finished goods inventory, selection of distribution outlets, response to product orders and all transportation between downstream parties, including returned goods"
Luu, Ng, and Chen (2003) studied project procurement selection priorities and identified budget and schedule as the most important considerations in the decision to outsource activities. This study of construction projects also identified other items that project managers must consider in developing a procurement strategy, including quality, risk, complexity, and flexibility.
including quality, risk, complexity, and flexibility.
minimum variance-
is an unexpected event that disrupts performance of the system
rapid response
is concerned with a firms's ability to satisfy customer service
High-level process mapping
is frequently used first to identify an organization's core and supporting processes.
(total) Inventory commitment
is the financial value of inventory deployed throughout the system
Turn velocity
is the rate of inventory usage over time
-logistics activities also must be effectively integrated with other key business functions of the organization, such as
marketing, sales, manufacturing, finance, and information technology, to enhance organizational performance.
To deliver high customer value, a company must
monitor and improve its value chain
life cycle support
most products are sold with guarantees that they will perform over a period of time
What key decisions need to be made to make a purchase or sale possible?
packaging containers documentation insurance storage inport and exporting regulations transport or move it-
reverse logistics activities
product returns, packaging reuse, minimization of waste and repairs that flow back into an outbound supply chain.
The supply chain is critical in creating value for the customer, because
profit depends on customers being able to conveniently shop at their local, fully stocked stores.
The Customer Value Triad is
quality, service, and price
Who can carry the most cargo?
ships, as many as 15,000 containers train- 250 containers
A supply chain constitutes a
system of organizations, people, activities, information, and resources involved in moving a product or service from the supplier to the customer
Business processes are
the activities that produce a specific output of value to the customer.
A prerequisite to creating alignment is
the availability of information so that all the companies in a supply chain have equal access to forecasts, sales data, and plans. -partner roles and responsibilities must be carefully defined so that there is no scope for conflict. -companies must align incentives so that when companies try to maximize returns, they also maximize the supply chain's performance
value chain is
the entire range of activities involved in delivering value to customers
logistics. is
the flow and storage of materials throughout the acquisition process, -"is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements"
The nature of the supply management profession can be further described as
the identification, acquisition, access, positioning, and management of resources and related capabilities the organization needs or potentially needs in the attainment of its strategic objectives
supply chain network structure consists of
the member firms and the links between these firms.
The first dimension, horizontal structure, refers to
the number of tiers across the supply chain.
The third structural dimension is the company's horizontal position.
the position that a firm occupies within the supply chain. -company can be positioned at or near the initial source of supply, be at or near the ultimate customer, or be somewhere between these end points of the supply chain.
movement consolidation
to decrease the transportation cost it is desirable to achieve
what is most products moved by
trucks, but they emit c02 gas, not the greenest solution
detailed maps are
used to identify the inputs, each step of the process as it currently exists, and the outputs associated with each step.
Process flow costing,
which tracks those process costs across functions for each process using activity-based costing, also can be used.
vertical structure
with few companies at each tier level, or a many suppliers or customers at each tier level.
