Global Supply Chain Management

Define Fixed & Variable Costs and Discuss Pros & Cons with RAIL transportation

High FC & Low VC Pro: speed, dependability, capability

Define Fixed & Variable Costs and Discuss Pros & Cons with PIPELINE transportation

High FC & Low VC Pros: Dependability Cons: Limited Situations

Push philosophy

Materials are produced according to a planned forecast and moved to the next stage of the supply chain Relates to MTS

Vertical Integration

Ownership, or at least control, of upstream end of suppliers and downstream customers

Pros and Cons with Offshoring

+ Company still in control/own/manages process + lower wages, taxes & regulations - lack of control, monitoring, transportation costs/risks

Pros and Cons with Outsourcing

+ Cost Saving + Flexibility + Strategic Reasons + Lack of technology - Finding the right outsourcer - Resource demanding to monitor

Criteria for Selecting Outcourser

- Price/Cost Reduction - Reliability - Delivery lead time - Financial capability - Performance & trade record - Responsiveness - Record of CSR - Senior Management Attitude

Supply Chain View's 2 Dimensions of Value

1. Cost Savings 2. Service Enhancement

What are 4 causes of the Bullwhip Effect? Define and Describe

1. Non-Zero Lead times & Demand Signal Processing (time lag & lack of visibility of orders cause inaccurate upstream decisions) 2. Order Batching or Burbridge Effect (impacts of ordering in batches. Benefits Supply but not Demand. JIT overcomes this problem) 3. Price Variation (E.g. "3 for 2": generates sales but causes peaks & troughs in demand -> amplified upstream) 4. Rationing & Shortage Gaming (Over-ordering due to stock shortages; Houilhan effect)

Six Supply Chain Evolution Factors

1. Reduced Transport Intensity 2. Falling Product Prices 3. De-regulation of Transport 4. Productivity Improvements 5. Emphasis on Inventory Reduction 6. Changes in Company Structure

Failures of Outsourcing Relationships

50% fail - Late Delivery - Quality Consistency - Cost Realisations - Consistency of quality - Confidentiality

Consignment

A shipment of freight which is passed on from a manufacturer or other source

Name a few Transport Security Technologies

Access Control Biometrics; ID cards & fingerprint or retina scans Detection Systems; CCTV closed circuit television, Motion Detectors, X-ray & Gamma-ray

Demand Amplification

Amplification of demand Upstream in the supply chain; where Downstream activities create fluctuations in demand causing suppliers to overproduce

AEO

Authorised Economic Operator (an EU voluntary security initiative; designed to reflect US C-TPAT)

Horizontal Collaboration

Collaboration between competitors and other supply chain actors. More uncommon than vertical.

Virtual Organisations

Companies which outsource most major functions

Geocentricity

Company acts independent of geography

Polycentricity

Company adopts host country perspective

Cosignor

Company who SENDS the consignment

CM

Contract Manufacturers (First tier suppliers who manufacture products for OEMs

Define CC. When were they added to the SC?

Consolidation Centers. Added in 1990s Delivers from suppliers to DCs in full truckloads

Define the levels in a "top-down" perspective on SC Strategy

Corporate Strategy: financial & growth targets Business Unit Strategy: targets & perf for specific products/markets Functional Strategy: Specific departments of a firm

What were the three main developments of manufacturing?

Craft Production (low output vol, high customisation) Mass Production (high output vol, low customisation) Mass Customisation (high output & customisation)

Order Qualifiers

Criteria/performance expectations that a company must meet for a customer to even consider it as a possible supplier

Downstream

Customer end of supply chain

C-TPAT

Customs Trade Partnership Against Terrorism (Vol. Government-business to improve overall Int SC. States that shippers must send detailed info about the cargo & its origin 24hrs before arrival)

What are other names for the Postponement approach?

Delayed Product Configuration Delayed Product Differentiation Late Stage Customisation

Define the "Principle of Postponement" and it's pros

Delaying the customisation process as far Downstream as possible. Creates flexibility to cope with demand fluctuations and economies of scale

Agile Supply Chain

Demand-pull chain designed to cope with volatile demand. Structured to allow maximum flexibility & often incorporates postponed production. Manages surge demand.

DFM

Design for Manufacture (designing products that can be assembled efficiently and cheaply)

Bullwhip Effect

Distortion of orders along supply chain. Where small fluctuations in end consumer demand result in amplification of demand upstream

Define DC. When did they emerge?

Distribution Centers. Emerged 1970s Efficiently deal with cargo. Large warehouse where various suppliers store products

Define Efficient Supply Chain and Responsive Supply Chain. Who suggested these two different types of SCs?

Efficient: for Functional Products Responsive: for Innovative Products Suggested by Professor Marshall Fischer.

EPOS data

Electronic Point of Sale (electronic available data that captures sales to customers)

ESI

Environmental Separation Index (measures difference b/w working environments of outsourcer and outsourcee companies)

What are the main problems for SC with the Bullwhip Effect?

Excessive inventory -> Consumes Warehouse Capacity -> Cost Implications -> Products may never be used

Define FGP

Factory Gate Pricing (retailer takes control of delivery to their DCs) Pros: Single point of control, increase SC visbility

FTK

Freight Tonne Kilometers (macro measures of volumes of freight being transported)

FCL

Full Container Load

LPI

Global Logistics Performance Index (measures logistics performance per country by 6 dimensions; customs, infrastructure, international shipments, logistics competence, tracking&tracing, timeliness)

Internal Integration

Integration between business functions with a single organisation

External Integration

Integration of business process across more than one organisation in supply chain

Backward Integration

Integration with selected first & second tier suppliers

Forward Integration

Integration with selected first-tier customers or service providers. Uncommon within second-tier

Forward & Backward Integration

Integration with suppliers & customers. "Total" integrations is rare but theoretically ideal

ITU

Intermodal Transport Unit (freight moves within a loading unit- moves in different modes but remains within unit at all times)

Define ISPS Code

International Shipment & Port Security Code (Mandatory security initiative from 1 July 2004 applies to all countries members of IMO) Prevents and detects security threats

Why is this perspective criticized?

It does not take a cross-functional approach but instead separates the activity into functional silos

JIT

Just-in-time Inventory Management (Idea of making do with the minimum possible level of inventory holding)

Describe the "Taxonomy for selecting global supply chain strategies"

LEAN: Short lead time + Predict. Demand Continous Replenishment AGILE: Short lead time + Unpredict. Demand Quick Repsonse. Postponement Approach. ZARA LEAN: Long lead time + Predict. Demand Plan and Execute. More planning required LEAGILE: Short lead time + Unpredict. Demand Post-postonenent "Hybrid Strategy" Combines Lean and Agile logistics philosophies. Decoupling stage: Stage between LEAN and AGILE

Define/Discuss main difference between Lean and Agile strategies?

Lean: Manages base demand. Forecast-driven approach. Focuses on Functional Products; predictable demand, long product life cycles, low variety and long lead times. Agile: Manages surge demand. Demand-driven approach. Focuses on Innovative Products; unpredictable demand, short product life cycles, high variety and short lead times.

LCL

Less than full Container Load

LSCI

Linear Shipping Connectivity Index (measures costal countries access to container shipping services)

LSPs

Logistics Service Providers (Various types of companies that provide logistics services)

Re-labeling view

Logistics has been re-labeled by SCM

Unionist View

Logistics is part of the wider entity SCM

Define Fixed & Variable Costs and Discuss Pros & Cons with AIR transportation

Low FC & High VC Pros: Super Speed Cons: limited weight, dependent on other forms of transportation to/from airport (AirTrucking)

Define Fixed & Variable Costs and Discuss Pros & Cons with ROAD transportation

Low FC & Medium VC Pro: speed, flexibility, availability, dependability, frequency Cons: low volume and weight

Pull philosophy

Materials are only produced and moved when required Relates to MTO Prevents stock piling & inefficiency

MTO

Make-to-Order (Producing product only to meet actual customer demand)

MTS

Make-to-Stock (Producing product which is placed in storage)

Define and Describe the Four Stages an Outsourcer-Outsourcee Relationship can move across

Master-Servant Stage: outsourcer sets rules and expectations and the outsourcee delivers. Low cost is the main driver. Consultative Stage: "consult-client". Factors such as quality/reliability/responsiveness are main drivers. Peer-to-Peer Stage: Ideal stage. More synergistic long-term relationship creating "win-win" situations for both parties. Competitive Stage: Original outsourcee company takes the lead and starts to compete with the outsourcing company

Define Fixed & Variable Costs and Discuss Pros & Cons with WATER transportation

Medium FC & Low VC (economies of scale) Pros: Large volume & weight Cons: Speed, depends on other transportation to/from port

Aggregated Procurement

Method for selecting suppliers based on their capabilities rather than individual suppliers tendering for particular orders

Directional Imbalances

Mismatches in the volumes or types of freight moving in opposite directions in a freight market

NDC

National Distribution Center

Solutions to Offshoring

Nearshoring - move closer to home country Backshoring - move back to home country

Supply Chain

Network of organisations that are involved through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of the ultimate consumer

Order Winners

One ore more criteria that leads to the selection of a particular outsource by an outsourcing company

Order-losing Sensitive Qualifiers

Order qualifiers that are more critical than other order qualifiers in terms of the outsourcer's requirments

OEM

Original Equipment Manufacturer (companies that produce the final branded products. last stage of assembling pieces already produced by CMs)

Intersectionist view

Overlap between parts of both logistics and SCM, but also parts that are separate

Which Seven Key Areas does TPS focus on eliminating waste?

Overproduction Waiting Transportation Inappropriate Processing Unneccessary Inventory Unnecessary Motion Defects

Derived Demand

People or Freight do not travel for sake of making a journey, travel for other reason

Decoupling point

Point at which the "base product" moves form the shared platform stage to the customised product stage.

5 Modes of Transport

Pipeline, Water, Road, Rail, Air

Logistics

Planning, implementing and controlling procedures for the efficient and effective transportation and storage of goods including services for the purpose of conforming to customer requirements Getting the Right product in the right way quantity quality destination customer price

Supply Base Rationalisation

Process of reducing or rationalising the number of suppliers in a supply network, typically to reduce complexity --> and cost

Lean Production

Pull-based value stream of activities with level production and just-in-time inventory management Manages base demand.

Deregulation

Reduction/removal of various government-imposed barriers that hinder competition in markets

Traditionalist View

Regards SCM as a subset of logistics

RDC

Regional Distribution Center

Collaboration

Relationship between supply chain partners developed over a period of time

Transport cost sensitivity

Relationship of transport costs to freight value. High sensitivity= minor changes in transport rates will have a major impact on transport choice decisions Value - to- volume has increased

Material Substitution

Replacement of physical product by virtual product

How is supply chain integration and collaboration linked?

SC Integration enables collaboration. Integration is product and process oriented whilst collaboration is focused on relationships.

SLA

Service Level Agreement (identifies performance)

SKU

Stock-Keeping unit (unique version in terms of size, packaging of a particular product type)

Upstream

Supplier end of supply chain

Silo

Teams or business functions operating in isolation to others

Outsourcing

The transfer of management and delivery process to a third party

Glocalisation

Thinking on a GLOBAL scale but adapting to LOCAL wants as appropriate

Ethnocentricity

Thinking only in terms of your home country environment

Offshoring

Transfer of specific processes to lower cost locations in other countries

Agile

To cope with volatility in demand

TPS

Toyota Production System (Production system designed by Toyota to eliminate waste in seven key areas)

Lean

Value is added at each stage of the process & steps that do NOT add value are eliminated

Manufactures have realised the benefits of producing products on shared and common platforms. What are these products called?

Vanilla Product Base Product Semi-Processed Products Core Products Grey Product Generic Product

Transport cost penalty

low value, high volume - high cost penalty high value, low volume- low cost penalty