Chapter Ten: Extending the Organization -- Supply Chain Management Review Questions

Where are the customer's customers in a typical supply chain?

downstream

Where are the supplier's suppliers in a typical supply chain?

upstream

What is RFID's primary purpose in the supply chain?

Radio-frequency identification (RFID) uses electronic tags and labels to identify objects wirelessly over short distances. RFID's electronic product code (RFID EPC) promotes serialization or the ability to track individual items by using the unique serial number associated with each RFID tag. An RFID EPC tag can identify each specific item and allow item-level tracking to determine whether the product has passed its expiration date. Businesses can tell automatically where all its items are in the supply chain just by gathering the data from the RFID chips.

What is the bullwhip effect and how can it affect a supply chain and a firm's profitability?

The bullwhip effect occurs when distorted product-demand information ripples from one partner to the next throughout the supply chain. The misinformation regarding a slight rise in demand for a product could cause different members in the supply chain to stockpile inventory. These changes ripple throughout the supply chain, magnifying the issue and creating excess inventory and costs for all.

What are the five primary activities in a supply chain?

1. Plan: Prepare to manage all resources required to meet demand 2. Source: build relationships with suppliers to procure raw materials 3. Make: manufacture products and create production schedules 4. Deliver: Plan for transportation of goods to customers 5. Return: support customers and product returns

What is logistics and how does it impact the supply chain?

Logistics includes the processes that control the distribution, maintenance, and replacement of materials and personnel to support the supply chain. The primary value activities for an organization include inbound and outbound logistics. Inbound logistics acquires raw material and resources and distributes them to manufacturing as required. Outbound logistics distributes goods and services to customers. Logistics controls processes inside a company (warehouse logistics) and outside a company (transport logistics) and focuses on the physical execution part of the supply chain. Logistics includes the increasingly complex management of processes, information, and communication t take a product from cradle to grave.

What is materials management and how does it impact the supply chain?

Materials management includes activities that govern the flow of tangible, physical materials through the supply chain such as shipping, transport, distribution, and warehousing. In materials management, you focus on quality and quantity of materials as well as on how you will plan, acquire, use, and dispose of such materials. It can include the handling of liquids, fuel, produce, and plants and a number of other potentially hazardous items. Materials management focuses on handling all materials safely, efficiently, and in compliance with regulatory requirements and disposal requirements.

What is procurement and how does it impact the supply chain?

Procurement is the purchasing of goods and services to meet the needs of the supply chain. The procurement process is a key supply chain strategy because the capability to purchase input materials at the right price is directly correlated to the company's ability to operate. Without the right inputs, the company simply can't create cost-effective outputs.