Chapter 13

silo mentality lack of supply chain visibility lack of trust lack of knowledge

4 Obstacles to Supply Chain Integration

stockpiling backup suppliers supply redundancy IT systems risk management program

5 Way of Managing Supply Chain Risk

poor capacity planning excess inventory stockouts excess SC costs demand forecast updating order batching

6 Symptoms and Causes of the Bullwhip Effect

CRM CSM DM Order Fulfillment Manufacturing Flow Management SRM Product Development and Commercialization Returns Management

8 Key Supply Chain Business Processes

customer relationship management

CRM

Customer Service Management

CSM

demand management

DM

everyday low pricing

EDLP

supply chain visibility

Lack of _____ _____ _____ (information visibility) is a common supply chain process integration problem. It describes the inability to easily share or retrieve trading partner information

knowledge

Lack of _____ is an obstacle to supply chain integration and describes a lack of process and information system skills regarding the benefits of SCM among management and other employees within the firm and among partners

trust

Lack of _____ is an obstacle to supply chain integration and describes an unwillingness to work together or share information because of the fear that the other party will take advantage of them or use the information unethically

supplier relationship management

SRM

CSM

_ _ _ process imparts information to customers while also providing ongoing management customer relationships. The provided information may include product availability, shipping dates, order status and the product and service agreements

SRM

_ _ _ process manages product and service agreements with suppliers and develops close working relationships with key suppliers

CRM

_ _ _ process provides the firm with the structure for developing and managing customer relationship by identifying key customer segments, tailoring products/services to meet their needs, measuring customer profitability and firm's impact on customers.

DM

_ _ process is what balances customer demand and the firm's output capabilities, forecasting demand and coordinating with production, purchasing and distribution

key trading

_____ _____ Partners must be identified so they can eventually enable the successful sale and delivery of end products to end customers during Supplier Evaluation and Development.

demand forecast updating

_____ _____ _____ is the changing of method used to calculate a forecast and contributes to the Bullwhip Effect. Can be reduced with VMI, CPFR

manufacturing flow management

_____ _____ _____ process determines manufacturing process requirements to enable the right mix of flexibility and velocity to satisfy demand

Product development and commercialization

_____ _____ and _____ process develops new products frequently and gets them to market effectively, integrating suppliers and customers into the process to reduce time to market

forward buying

_____ _____ are activities that occur when buyers stock up to take advantage of low price offers. Also known as stockpiling

shortage gaming

_____ _____ is a strategy that occurs when buyers figure out the relationship between their orders and what is supplied and they then tend to inflate their orders to satisfy their real needs

order batching

_____ _____ is a type of inventory control that occurs when small orders are combined into one large order. It amplifies demand variability and adds to the use of safety stock. This contributes to the Bullwhip Effect. Can be reduced with information visibility and more frequent/smaller order sizes.

silo mentality

_____ _____ is the business mentality that causes a firm to act only in regard to a single department within the firm or a single firm with the supply chain (local optimization)

process integration

_____ _____ is the sharing information and coordinating resources to jointly manage a process or processes. It requires communication and cooperation from a variety of partners throughout the supply chain

collaborative education

_____ _____ is the training of supply chain partner employees to create a more successful supply chain with higher partner returns and to prevent the Lack of Knowledge supply chain integration obstacle.

returns management

_____ _____ process aka Reverse Logistics manages used product disposition, product recalls, packaging requirements and minimizing future product returns

Order Fulfillment

_____ _____ process meets customer requirements by synchronizing the firm's marketing, production and distribution plans

rationing

_____ can occur when demand exceeds a supplier's finished goods available and the supplier may allocate product in proportion to what buyers ordered

emergency

_____ sourcing is the act of maintaining a backup source of supply available to provide purchased items when the primary source has temporarily become unavailable

artificial

_____ variability is caused by Order Batching. This increases the Bullwhip Effect with artificial batching.