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supply chain execution software

- facilitates desired performance of day to day operating tasks required to support customer demand

What are the four R's of sustainability?

- reuse - remanufacturing - reconditioning - recycling

What are the seven supply chain process enablers?

1) cross-chain visibility 2) agility 3) velocity 4) synchronization 5) adaptability 6) segmentation 7) optimization

The rail industry is comprised of the following two carrier types:

1) linehaul freight carriers 2) Shortline carriers

2PL

Asset-based logistics providers that physically move product through the supply chain (transport carriers of various modes).

why do stockouts occur?

Because of uncertainties in both demand and lead time

ordering cost

Refers to the expense of placing an order for additional inventory and does not include the cost or expense of the product itself.

True or False? Information is only useful if it can drive effective analysis and decision making

True

Quadrant model

Typically used to classify raw parts or components for a manufacturing firm, the quadrant model can also be used to classify finished goods inventories using value and risk to the firm as the criteria. Value is measures as the value contribution to profit; risk is the negative impact of not having the product available when it is needed

Inventory costs (Distribution tradeoff costs)

a higher number of stocking points increases the overall safety stock levels and inventory carrying costs in the supply chain

Augmented reality

an interactive experience where objects that reside in the real world are enhanced by computer-generated perceptual information

Inventory carrying costs

are those that are incurred by inventory at rest and waiting to be used

value-based costs

are those that are specifically out-of-pocket expenditures

the sanitation function of product handling

focuses on complying with regulator standards and maintaining worker morale

What is the "IT" gap?

the difference measured each year between the percentage of 3PL users indicating that "IT capabilities are a necessary element of 3PL expertise" and the percentage reporting that they are "satisfied with "3PL IT capabilities"

asset management

the effectiveness of an organization in managing assets to support demand satisfaction and including the management of all assets

asset turnover

the ratio of sales to total assets and indicates how the organization is utilizing its assets in relation to sales

Inventory status file

this file maintains inventory records so that the organization may subtract the amount on hand from the gross requirements, thus identifying the net requirements at any point in time

What are the objectives of materials handling?

to create a more productive, efficient, and safe operation

What is the goal of a multi-organizational supply chain?

to function as a single entity that produces and distributes the inventory needed to meet customer requirements

reconditioning

usually means returning used products to working order but not "good as new"

Four requirements for cognitive systems include the following:

- Adaptive- ability of systems to learn as information changes - Interactive- ease of use for those who are doing the analyses; likely will involve cloud capabilities - Iterative and stateful- identify additional data needs and relevant questions that can enhance the analysis - Contextual- involve a wide variety of inputs and sources of information

Value-Adding roles of Distribution Operations

- Assembly services - Inventory management and visibility - Product kitting, bundling, and unbundling - Product postponement - Production sequencing - Quality control - Recycling, repair, and returns management

Inserting distribution operations into the supply chain involve several factors:

- Balancing supply and demand - Protecting against uncertainty - Allowing quantity purchase discounts - supporting production requirements - fulfilling omni-channel demand - promoting transportation economies

Strategic Distribution Decisions

- Capability requirements - Network Design Issues - Facility Considerations

DRP develops a projections for each SKU and requires the following:

- Forecast demand for each SKU - current inventory level of the SKU - target safety stock - recommended replenishment quantity - lead time for replenishement

The oil system is made up of the following three primary types of pipelines:

- Gathering lines - Trunk lines - Refined product pipelines

The primary benefits of intermodalism include:

- Greater accessibility by linking the individual modes - Efficiency can be achieved without sacrificing service or quality or accessibility - Intermodal transportation facilitates global trade

Air carriers can also be separated on the basis of service capabilities:

- Integrated carriers- like FedEx and UPS provide door-to-door service, scheduled pickup and delivery windows, and the expedited service through their hub and spoke networks - Non-integrated carriers- provide on-demand, air-service only from airport to airport

Space may need to be allocated to three additional functions:

- an area may be needed for processing rework and returns - office space is needed for administrative and clerical activities - space for break areas, locker rooms, meeting rooms, equipment storage, and maintenance operations is needed

Supply chain event management (SCEM) tools

- collect data in real time from multiple sources across the network and creates a clear picture of how the supply chain is performing - allows companies to automate the monitoring of supply chain events as they occur on a day-to-day basis

Domestic water carriers

- compete with railroads for long-distance movement of low-value, high-density, bulk cargoes that mechanical devices can easily load and unload - primary commodities moved include: petroleum, coal, iron ore, chemicals, forest products, and other commodities

effective use of BA and BI capabilities drive a variety of supply chain benefits:

- greater accuracy in planning - reduction of bottlenecks - better knowledge of risks - creation of lean supply chains - greater financial success

Distinctives (Quadrant Model)

- high safety stocks - More then one stocking location - Produce to inventory

Criticals (Quadrant Model)

- high safety stocks - multiple stocking location - produce to inventory

To add logistics value from the seller's perspective, there are three basic alternatives to consider:

- increased service with a constant price to the customer - constant service with a reduced price - increased services with a reduced price

What are the major types of inventory costs?

- inventory carrying cost - ordering and setup cost - expected stockout cost - in-transit inventory carrying cost

What are several characteristics of a good measure?

- is quantitative - is easy to understand - encourages appropriate behavior - is visible - is defined and mutually understood - encompasses both outputs and inputs - measures only what is important - is multidimensional - uses economies of effort - facilitates trust

WMS can also provide value-added capabilities and support a variety of supply chain activities such as:

- labor management - automated data collection - task interleaving - fulfillment flexibility - systems convergence - performance tracking

Two primary carrier types dominate the for-hire portion of the water industry, as follows:

- liner service - charter services

Generics (Quadrant Model)

- low/no safety stock - single stocking location - produce to order

Choosing modal options is a function of three factors

- modal capabilities - product characteristics - modal freight pricing

Carriers are not liable for freight claims if the damage is attributable to some uncontrollable factor such as the following:

- natural disaster or some other "act of God" - military attack or similar "act of public enemy" - government seizure of freight or "act of public authority" - Failure to adequately package the freight or other negligent "act of the shipper" - extreme fragility, perishability, or problematic "inherent nature of the goods"

Several benefits will be generated by effective product slotting:

- picking productivity - efficient replenishment - work balancing - load building - accuracy - ergonomics - proconsolidation

What are the primary software categories of SCM software?

- planning - execution - event management - business analytics (BA) - business intelligence (BI)

Logistics outputs that influence customer service

- product availability - order cycle time - logistics operations responsiveness - logistics system information - post-sale logistics support

Essential fulfillment capabilities and characteristics include:

- speed to market - customer proximity - facility flexibility - store fulfillment - inventory accuracy - technology upgrades

What do SRM goals include:

- streamlining and improving strategic information flows between the buyer and its suppliers - establishing governance and performance management models - increasing innovation either through process improvement, product development, or both

Service-oriented architecture (SOA)

A collection of services that communicate with each other. THis communication may involve either a simple transfer of data or it could involve a coordination of two or more services needed to coordinate some activity

The following are basic assumptions of the simple EOQ model:

1) A continuous, constant, and known rate of demand 2) A constant and known replenishment or lead time 3) All demand is satisfied 4) A constant price or cost that is independent of the order quantity 5) No inventory in transit 6) One item of inventory or not interaction between items 7) Infinite planning horizon 8) Unlimited capital

In traditional distribution operations, four primary functions are carried out:

1) Accumulation 2) Sortation 3) Allocation 4) Assortment

What are the top five workforce issues organizations are currently facing?

1) Attracting talent 2) Developing leaders 3) Retaining high performers 4) Enhancing employee motivation and engagement 5) Enhancing workforce performance

What are the six reasons for accumulating inventory?

1) Batching economies and/or cycle stocks 2) Uncertainty and safety stocks 3) Time/In-transit 4) Work-in-process stocks 5) Seasonal stocks 6) Anticipatory stocks

Two carrier types dominate the air transportation mode:

1) Combination carriers 2) Air cargo carriers

Calculating the cost to carry (or hold) a particular item in inventory involves three steps:

1) Determine the value of the item stored in inventory 2) Determine the cost of each individual carrying cost component and add them together to determine the total direct costs consumed by the item while being held in inventory 3) Divide the total costs calculated in the second step by the value of the item determined in the first step.

External distribution services should be considered for several reasons:

1) contracting for services alleviates capital investment in private distribution facilities 2) short-term commitments for capacity allows network flexibility

The air cargo industry faces numerous obstacles to profitable growth such as:

1) demand is waning for products, such as notebook computers and boxed software, which previously moved in a large volume via air 2) mode-shifting of freight from air to ocean and rail connections in Asia is limiting air freight growth 3) should the risks of weakening global economic activity, waning consumer confidence, or trade wars become reality, air cargo demand will fall

Two options are available for the product flow requirements of the supply chain:

1) direct shipments of goods from the manufacturer to retailer or retailer to consumer or 2) movement of goods through distribution facilities to customers

What are the four basic forms of the EOQ inventory model:

1) fixed quantity/fixed interval 2) fixed quantity/irregular interval 3) irregular quantity/fixed interval 4) irregular quantity/irregular interval

The square-root rule is based on several reasonable assumptions:

1) inventory transfers between stocking locations are not common practice 2) lead times do not vary, and thus inventory centralization is not affected by inbound supply uncertainty 3) customer service levels, as measured by inventory availability, are constant regardless of the number of stocking locations 4) demand at each location is normally distributed

To achieve a proper balance between service and cost, safety and productivity, volume and capacity, logistics professionals must effectively manage four critical dimensions of materials handling:

1) movement 2) time 3) quantity 4) space

Three criteria are commonly used to slot production within a distribution facility:

1) popularity 2) unit size 3) cube

There are three possible solutions for network design facilities:

1) private facilities 2) public facilities 3) contract facilities

Batching economies or cycle stocks usually arise from three sources

1) procurement 2) production 3) transportation

Supplier Relationship Management (SRM)

A controlled and systematic approach to managing an organization's sourcing activities for goods and services.

freight claims form

A document that the transportation buyer files with the carrier to recoup monetary losses resulting from the carrier's failure to properly protect the freight

Warehousing costs ((Distribution tradeoff costs))

A larger number of facilities increase administrative and operational costs. Each warehouse will require its own leadership team, support personnel, technology, and administrative space that drives expenses upward

After an organization runs the MRP program, several basic outputs and reports will help managers involved in logistics and manufacturing. Included are records and information related to the following:

1) quantities the organization should order and when they should be ordered 2) any need to expedite or reschedule arrival dates of needed input quantities 3) canceled need for product 4) MRP system status

Several factors make the objective of identifying logistics solutions that will result in higher levels of customer service while reducing inventory investments

1) real-time order management systems 2) improved technologies to manage logistics information 3) more flexible and reliable transportation resources 4) improvements in the ability to position inventories so that they will be available when and where they are needed

Reducing the number of stockout points to two has two results:

1) redundant safety stocks are eliminated because now there are two quantities of safety stocks rather than eight 2) the organization has the option of further reducing inventories by consolidating C items into one of the two future facilities

ABC classification

1) select some criterion, such as revenue, for developing rank. 2) Rank items in descending order of importance according to this criterion and to calculate actual and cumulative total revenue percentages for each item

Bill of Materials (BOM)

specifies the exact amount of raw materials, components, and subassemblies needed to produce an independent-demand item. specifies when the individual inputs must be available for the production process

stockout cost

the cost associated with not having a product available to meet demand

Who first recognized the need to rank inventory items

H. Ford Dicky of General Electric

the square-root rule

Helps determine the extent to which inventories might be reduced through a consolidation strategy. Assuming that total customer demand remains the same, the square-root rule estimates the extent to which aggregate inventory need will change as an organization increases or decreases the number of stocking locations

Transportation modal accessibility disadvantage

Air, rail, and water carriers face accessibility limitation due to infrastructure issues. Poor customer adjacency to airports, rail lines, and waterways limit use of these modes unless intermodal service is used. In these cases, air, water, and rail carriers provide long distance linehaul services while trucks provide origin pickup and destination delivery services

Cost of lost sales (Distribution tradeoff costs)

An increase in the number of facilities improves inventory availability and order fill rates. Fewer customers will be compelled to find substitute products or suppliers, thus reducing defections and lost sales

Transportation costs (Distribution tradeoff costs)

An increase in the number of warehouse brings the warehouse closer to the customer and market area, reducing outbound transportation distance and costs

How do MRP systems meet their objectives

MRP systems meet their objectives by computing net requirements for each inventory item, time-phasing them, and determining their proper coverage

linehaul freight carriers

Provide service between major markets and customers within those markets

order picking

Selecting goods for customer orders

Which cost is frequently the largest component of inventory carrying cost?

The capital cost

True or False? Inventories create both an asset and a liability on the balance sheet

True

True or False? It is best for inventory to increase at a slower rate than GDP

True

True or false? Generally carrying inventory in transit usually costs less than carrying inventory in the warehouse

True

Third Party Logistics (3PL)

a broad range of instances where commercial organizations provide and/or manage logistics services on behalf of clients and customers

collaboration

a business practice that encourages individual organizations to share information and resources for the benefit of all

ABC analysis

a classification technique that assigns inventory items to one of three groups according to the relative impact or value of the items that make up the group

Intelligent order management

advanced distributed order management systems will orchestrate demand in real time from source to delivery to return. The applications may pally machine learning, AI, and analytics capabilities to create and automate rules for shipping, sourcing, tax collection, and logistics

resource productivity

affects distribution cost and the ability of the distribution center to maximize throughput on a consistent basis

Transit time advantage

air transportation is very fast for the linehaul move but loses some velocity as pickup and delivery activities must be handled by truck. Motor carriage is also relatively fast because it can provide more direct movement from origin to destination far more often than any other module

order-to-cash cycle

all of the activities that occur from the time an order is received by a seller until the seller receives payment for the shipment

storage equipment

allows companies to hold materials economically over a period of time

Software as a Service (SaaS) distribution model

applications are hosted by a vendor or service provider and made available to customers over a network

Business Analytics (BA)

applies to all technology-enabled problem-solving activities

the min-max management approach

applies when demand might be larger and when the amount on hand might fall below the reorder point before the organization initiates a replenishment order. In this case, the min-max approach increments the amount ordered by the difference between the reorder point and the amount on hand

Drivers

are defined as "compelling reasons to partner". Strategic factors that may result in a competitive advantage and may help determine the appropriate type of business relationship

Facilitators

are defined as "supportive corporate environmental factors that enhance partnership growth and development". Included in the main types of facilitators are corporate compatibility;management philosophy and techniques;mutuality of commitment to relationship formation; and symmetry on key factors such as relative size, financial strength, etc.

Just-in-time systems (JIT)

are designed to manage lead times and eliminate waste. is an operating concept based on delivering materials in the exact amounts at the precise times that organizations need them, thus minimizing inventory costs

Intermodal trains

are special types of unit trains that focus on the long-distance or linehaul movement of intermodal containers and trailers

inventory service costs

items such as insurance and taxes that are present in many states

Needs assessment

knowledgable managers must properly diagnose the situation, their needs assessment must address the links between effective business processes, appropriate technology, and supply chain performance

charter services

lease ships to customers on a voyage or time basis and follow routes of the customers choosing

shipping

loading goods for delivery to customer

Vendor-managed inventory system (VMI)

manages inventories outside of an organization's logistics network, it is used by an organization to manage its inventories held in its customer's distribution centers

resource efficiency

measures compare distribution activity completion time versus engineered time standarda

trunk lines

measuring from 8 to 24 inches in diameter, bring crude oil from extraction points to refineries

metric

more complex to define and usually involves a calculation or a combination of measurements, often in the form of a ratio

Vertical collaboration

most typically refers to collaboration among buyers and sellers in the supply chain. These include traditional linkages between firms in the supply chain such as retailers, distributors, manufacturers, and parts and material suppliers. Transactions between buyers and sellers can be automated, and efficiencies can be significantly improved

modal cost disadvantage

motor carriage and air transportation are high-cost modes. On average, motor carriage is about 10 times more expensive than rail, and air service is more than twice the cost of motor carriage. Despite the premium paid for these modes, the faster speed can result in lower inventory investment and holding costs leading to a net lower landed cost.

Transportation modal accessibility advantage

motor carriage, because of its inherent ability to provide service to virtually any location. Given the road networks in most countries, motor carriage is more accessible to sellers and buyers than any other mode for domestic transportation

modal reliability advantage

motor carriers and air carriers have the lowest variability relevant to average transit time. Numerous carriers in both modes regularly achieve on time delivery performance in the 98 percent or greater level

unit trains

move an entire block of railcars carrying a single commodity from the origin to a single destination. This eliminates the need to stop for time-consuming rail yard classification activities

air cargo carriers

move freight, packages, letters, and envelopes

Less-than-truckload (LTL)

move multiple shipments ranging from 150 pounds up to 15,000 pounds in each trailer. National carriers use a hub-and-spoke network of local and regional terminal facilities to sort and consolidate shipments moving to a particular market area. Regional LTL carriers focus their efforts on a particular area of the country.

transport equipment

moves materials from one location to another within a distribution center

Put-away

moving goods into storage locations

replenishment

moving product from storage locations to picking slots

reuse

often requires disassembly, which is a systematic method of separating a product into constituent parts, components, subassemblies, or other component parts. The parts or components may be reassembled for reuse after cleaning, checking, and repair, or the individual components may be reused

replenishment time consists of several components:

order transmittal, order processing, order preparation, and order delivery

modal safety advantage

pipelines, air transportation and motor carriage have excellent reputations for product safety. Their equipment provides excellent ride quality and protection from the elements. Faster transit times also reduce the opportunity for theft and other mishaps

prescriptive (supply chain analytics maturity model)

prescribing what needs to be done

the maintenance function of product handling

preventative maintenance of equipment and timely repairs of problems also promote safe working conditions in the distribution center

shortline carriers

provide the local and regional links between individual customers and the national rail network of the Class 1 railroads.

asset utilization

provides an objective assessment of how intensively distribution managers are working their resources

modal safety disadvantage

rail and water lag the product protection area. Goods moving via rail encounter a great deal of vibration created by steel wheels on steel track, swaying, and jarring from freight cars being coupled at speed of up to 10 miles per hour. Water transportation often exposes goods to the elements, excessive movement, and rough handling during the loading and unloading process

Transit time disadvantage

rail, water, and pipeline are extremely slow with average transit speeds of 22 miles per hour, 5 to 9 miles per hours, and 3 to 4 miles per hour respectively

setup cost

refers more specifically to the expense of changing or modifying a production or assembly process to facilitate line changeonvers

terms of sale

clarify the delivery and payment terms agreed upon by a seller and buyer

digitization

collects all transactional data from these silos into an electronic state in a data base, creating common access to data sources across the supply chain

identification and control equipment

collects and communicates information that is used to coordinate flow of materials within a facility and between a facility and its suppliers and customers

intermodal transportation

combines the use of two or more of the basic modes to move freight from its origin to destination

index

combines two or more metrics into a single indicator

5PL

companies that aggregate demands of 3PLs into bulk volumes to negotiate better rates with logistics service providers

Quantum computing

computers with operating principles that are based on quantum mechanics will provide unprecedented computational and modeling power. Supply chain managers will be able to use these computers to harness the overwhelming amount of supply chain data to model more scenarios and achieve breakthrough performance

Materials Requirement Planning (MRP)

consists of a set of logically related procedures, decision rules, and records designed to translate a master production schedule into time-phased net inventory requirements and the planned coverage of such requirements for each component item needed to implement this schedule

Manifest trains

contain a mixture of equipment and freight for multiple customers

information

data that has been gathered, processes, organized, and structured in a given context

Digital supply chain twin

digital representation of the relationships between all the relevant entities of an end-to-end supply chain- such as products, customers, markets, distribution centers/warehouses, plants, finance, attributes, and weather. It creates end to end visibility by being in sync with the real-world supply chain to greatly enhance situational awareness and increases the quality and speed of decisions

liner services

employ a wide variety of ships in their fixed-route, published- schedule service. These carriers transport individual shipments for their customers, including containers, pallets, and other unit loads

remanufacturing

essentially means that a product or part is returned to the market as "good as new." Auto parts, tires, and electronics are frequently remanufactured.

What does it take to have an area of core competency?

expertise, strategic fit, and ability to invest

sortation

focuses on assembling like products together for storage in the distribution facility, processing, or transfer to customers

allocation

focuses on matching available inventory to customer orders for a SKU

The safety function of product handling

focuses on preserving the health and welfare distribution employees via an ergonomically sound working environment

materials handling

focuses on the activities, equipment, and procedures related to the movement, storage, protection, and control of materials in a system

Customer Relationship Management (CRM)

focuses on the practices, strategies, and technologies that companies use to manage and analyze customer interactions and data throughout the relationship lifecycle - CRM software consolidates customer information in a database so business users can more easily access and manage it

aggregate cost efficiency

focuses on the total distribution spending versus goal or the cost of goods sold

recycling

generally refers to the secondary use of materials. It usually includes glass bottles, cans, newspapers, corrugated materials, tires, etc. The recycling is usually performed for individual households by municipal government agencies

Cross-Docking Process

goods flow from receiving to shipping with minimal interim sorting, thus eliminating storage and order picking, two costly and time consuming activities, from the fulfillment process

Small package carriers

handle shipments up to 150 pounds and move multiple shipments on a single van or truck. They use networks similar to LTL carriers to move freight efficiently throughout the country. UPS, FedEx Ground, and the USPS are the primary U.S. small package ground carriers

truckload (TL) carriers

handle single shipments that use the full cubic capacity of the trailer or exceed 15,000 pounds. TL carriers provide direct service, picking up the load at the origin point and delivering it directly to the destination without stopping at freight-handling terminals

What is the key to a successful DRP approach

having accurate demand forecasts by SKU by distribution center

supply chain planning appplications

help organizations evaluate requirements for materials, capacity, and services so that effective fulfillment plans and schedules can be developed

Enterprise Resource Planning (ERP)

incorporate internal and external systems into a single unified solution that spans the enterprise. Includes the software that supports business functions and processes, computing hardware for hosting and executing software applications, and back-end network architecture for data communication across and within information systems

What are some primary benefits of ERP linked systems?

increased efficiency through greater visibility, decreased costs through streamlined or automated processes, remote information access via paperless options, better informed decision making through enhanced knowledge, and stronger inventory management through greater accuracy control

return on equity

indicates the return the stockholder are realizing on their equity in the organization

understanding

information that has been examined and studied in the context of specific business situations

fixed order quantity model

involves ordering a fixed amount of product each time reordering takes place (FOQ is frequently referred to as the two-bin model).

assortment

involves the assembly of customer orders for multiple SKUs held in the distribution facility.

accumulation

involves the receipt of goods from a variety of sources

digital control tower (DCT)

is a data gathering tool, continually updating information, assessing risks, surveying supplier business continuity plans, and reviewing mitigation strategies

Perfect Order Index (POI)

is established by multiplying the results of four KPI measurements: complete orders (100% fill rate), damage-free condition, documentation accuracy, and on-time dispatch

positioning equipment

is used to handle material at a single location so that it is in the correct position for subsequent handling, machining, transport, or storage

Air transportation

is used to ship small quantities of high-value, low weight goods. Primary commodities handled by this mode include electronics, pharmaceuticals, perishable seafood and flowers, and designer apparel

the asset protection function of product handling

seeks to shield organizations from merchandise theft and fraud

Pareto's law

separates the "trivial many" from the "vital few"

1PL

shippers or receivers of product moved through supply chain

Transportation Management Systems

software used to plan freight movements, do freight rating and shopping across all modes, select the appropriate route and carrier, and manage freight bills and payments

Capital cost

sometimes called the interest or opportunity cost, this cost type focuses on the cost of capital tied up in inventory and the resulting lost opportunity from investing that capital elsewhere

What is a drawback of VMI?

sometimes the supplier use VMI to push excess inventory to a customer distribution center at the end of the month in order to meet monthly sales quotas

What is a primary appeal to ERP?

the ability of ERP systems to update and share accurate information across business processes

freight bill

the carrier's invoice for the fees charged to move the shipment. The freight bill list the shipment, origin and destination, cosignee, items, total weight, and total charges

modal cost advantage

the cost of transportation service varies greatly between and within the modes. In general, pipeline, water, and rail service are low-cost transportation methods. They move large quantities of product over extremely long distances at very reasonable rates, creating a very low cost per ton-mile for their customers. The tradeoff, of course, is slow speed.

responsiveness

the speed at which the supply chain provides products to customers

public warehousing

the traditional warehousing outsourcing distribution option. A public warehouse rents out space to individuals or firms needing storage capacity on a short-term, transactional basis

weighted average cost of capital (WACC)

the weighted average percent of debt service of all external sources of funding, including both equity and debt

Contract Warehousing

they dedicate space, labor, and equipment to a client's specific product needs with the goal of providing integrated, accurate distribution services

storage space costs

they either increase or decrease as inventory levels rise and fall.

descriptive (supply chain analytics maturity model)

this level incorporates available data to answer questions such as what, where, and when certain supply chain activities, processes, or events are happening

predictive (supply chain analytics maturity model)

this level of inquiry takes a significant step forward in that the predictive stage focuses on questions such as what are the results if certain errors occur

the fixed order interval approach to inventory management

this technique involves ordering inventory at fixed or regular intervals; generally the amount ordered depends on how much is in stock and available at the time of review

variable-based costs

those that are specifically out-of-pocket expenditures

What is the fundamental goal of the warehouse management system?

to achieve high levels of control, inventory accuracy, and productivity through directed picking, directed replenishment, and directed put-away

What is a primary goal of big data?

to help organizations better understand the information that resides within the data and to focus attention on those factors that are most relevant to making well-informed supply chain decisions

What is the main objective of slotting?

to minimize product handling and employee travel in the building

What is the underlying rationale for DRP

to more accurately forecast demand and to explode that information back for use in developing production schedules

Receiving

transferring goods into the facility from the transport network

Supply chain managers can choose from among five modes of transportation:

truck, rail, air, water, and pipeline

cognitive (supply chain analytics maturity model)

typically introduces social context and meaning into the analytical processes, as well as a very high-level mathematical and statistical capabilities

data

unorganized facts that need to be processed

measure

used to denote any quantitative output of an activity or a process

the "push" approach

uses inventory replenishment techniques in anticipation of demand to move products

Business Intelligence (BI)

uses more structured data from traditional enterprise platforms provides views into the current state of an organization via transactional data from operational activities, supply chain processes, and financial transactions

gathering lines

very small pipelines, usually from 2o to 8 inches in diameter

cross chain visibility

visibility tools provide quick access to global supply chain information, generate supply chain alerts, support management by exception, and facilitate trading partner collaboration. Greater visibility helps companies mitigate disruptions, achieve agility, increase speed, meet customer demands, and make data-driven decisions

modal reliability disadvantage

water carriers and rail carriers. Historically, they have been slow and consistent, but with the capacity and congestion challenges, they have become less consistent. As a result, some customers have reduced their use of these modes when possible

transit time

Total elapsed time to move goods from origin to destination

JIT philosophy differs from customary inventory management in multiple ways:

- JIT attempts to eliminate excess inventories for both the buyer and the seller - JIT systems typically involve short production runs and require production activities to change frequently from one product to another - JIT minimizes wait times by delivering materials and products when and where an organization needs them - the JIT concept uses short, consistent lead times to satisfy the need for inventory in a timely manner - JIT-based systems rely on high-quality incoming parts and components and on exceptionally high-quality inbound logistics systems - the JIT concept requires a strong, mutual commitment between the buyer and the seller, one that emphasizes quality and seeks win-win decisions for both parties

What are three key execution tools in the transportation management system?

- Load tendering - Status tracking - Appointment scheduling

Distribution key performance indicators (KPI's)

- Order accuracy and order completeness - Timeliness - Perfect order index - Distribution cost efficiency - Asset utilization - Aggregate cost efficiency - Resource productivity - Resource efficiency

What types of information may become available as a result of a logistics audit?

- Overall business goals and objectives, including from a corporate, divisional, or logistics perspective - Needs assessment to include requirements of customers, suppliers, and key logistics providers - Identification and analysis of strategic environmental factors and industry trends - Profile of current logistics network and the firm's positioning in respective supply chains - Benchmark, or target, values for logistics costs and key performance measurements - Identification of "gaps" between current and desired measures of logistics performance (qualitative and quantitative)

What are some transportation management system analytical tools?

- Performance analysis - Freight bill auditing

What are some implementation issues with supply chain management software?

- Potentially useful software will become "shelfware" if it is difficult to install, poorly linked to other tools, or too cumbersome to use - data standardization - application integration

What are some critical transportation management system planning applications?

- Routing and scheduling - Load planning

The primary tradeoffs and relationships for internal efficiency targets to be met include:

- Space vs. equipment - Equipment vs. people - People vs. space

Shortcomings of MRP-based approaches include the following:

- Their application is computer intensive, and making changes is sometimes difficult once the system is in operation - Both ordering and transportation costs might arise as an organization reduces inventory levels and possibly moves toward a more coordinated system of ordering product in smaller amounts to arrive when the organization needs it - They are not usually as sensitive to short-term fluctuations in demand as are order point approaches - They frequently become quite complex and sometimes do not work exactly as intended

The principal advantages of most MRP-based systems include the following:

- They attempt to maintain reasonable safety stock levels and to minimize or eliminate inventories whenever possible - They can identify process problems and potential supply chain disruptions long before they occur and take the necessary corrective actions - Production schedules are based on actual demand as well as on forecasts of independent demand items - They coordinate materials ordering across from multiple points in an organization's logistics network - They are more suitable for batch, intermittent assembly, or project processes

Benefits of digitization and smart technology combine to create an integrated supply chain ecosystem include:

- Transparency - Communication - Collaboration - Flexibility - Responsiveness

Information must display a variety of these key characterisitcs:

- accuracy - accessibility - relevancy - timeliness - transferability - usability - reliability - value

Commodities

- adequate safety stocks - more than one stocking location - produce to inventory/produce to order

How do the carrying costs differ for inventory in transit?

- the capital cost of carrying in transit generally equals that of carrying inventory in a warehouse. If the organization owns the inventory in transit, the capital cost will be the same - storage space cost generally will not be relevant to inventory in transit since the transportation service provider typically includes equipment (space) and necessary loading and handling costs within its overall transportation price - may require additional insurance while in transit - obsolescence or deterioration costs are lesser risks for inventory in transit because the transportation service typically takes only a short time

Warehouse Management System (WMS)

- the core software used to manage fulfillment processes - primarily functions as a software control system that improves product movement and storage operations through efficient management of information and completion of distribution tasks

Facility considerations for privately owned and operated facilities

- the organization must determine the size of the facility in the distribution network - the interior layout of the facility - product locations within the facility

What are the goals of CRM software?

- to improve business relationships with customers, promote retention, and drive sales growth

carrier selection is based on a variety of shipment criteria and carrier capabilities:

- transit time - average and reliability - equipment availability and capacity - geographic coverage - product protection - freight rates

The seven "R's" definition of logisitcs

- using the right method - to provide the right amount - of the right material - at the right place - at the right time - in the right sequence - in the right position - in the right condition - at the right cost

A number of objectives must be kept in mind during the planning process for an organization's design of the interior of the distribution facility:

- utilization of the facility's cubic capacity - product protection - proper use of automation and materials-handling equipments is an important goal - product flexibility - continuous improvement - product placement within the facility

Demand forecasts for the facility can be used to create a rough estimate of space requirements as follows:

1) Develop a demand forecast; prepare an estimate in units for a relevant sales period by product category. Then the company will need to determine each item's order quantity, usually including some allowance for safety stock 2) Convert the demand into cubic capacity requirements based on product case sizes. Also, add 10 to 15 percent to the capacity needs for seasonal demand spikes and future growth. This provides basic estimate of storage space requirements 3) Add space needs for aisles and other fulfillment activities devote up to one-third of total space to these non-storage functions

What are the golden rules for success?

1) Get sponsorship of senior leaders 2) Choose the right technology solutions 3) Select an implementation leader who applies strong project management methods 4) Choose the right consultants to support implementation 5) Staff the project team with the best and brightest people 6) Manage "scope creep" to avoid implementation delays 7) Secure adequate resources for training and post-go-live support

What are some product handling functions?

1) Inventory control 2) safety, maintenance, and sanitation 3) asset protection 4) performance analysis 5) information technology

Inventory costs are important for three reasons:

1) Inventory costs represent a significant component of logistics costs in many organizations 2) The inventory levels that an organization maintains at nodes in the logistics network will affect the level of service the organization can offer its customers 3) Cost tradeoff decisions in logistics frequently depend on and ultimately impact inventory carrying costs

rail equipment can be organized into loads and transported in one of the three following primary ways:

1) Manifest trains 2) Unit trains 3) Intermodal trains

What are the three mega technology themes?

1) Mobility 2) Digitization 3) Automation

Process Model for forming Logistics Relationship:

1) Perform Strategic Assessment 2) Decision to form relationship 3) Evaluate alternatives 4) Select partners 5) Structure operating model 6) Implementation and continuous improvement

The Seven Immutable Laws of Collaborative Logistics:

1) Real and recognized benefits to all members 2) Dynamic creation, measurement, and evolution of collaborative partnerships 3) Co-buyer and co-seller relationships 4) Flexibility and security 5) Collaboration across all stages of business process integration 6) Open integration with other services 7) Collaboration around essential logistics flows

Product handling typically involves five primary processes:

1) Receiving 2) Put-away 3) Order picking 4) Replenishment 5) Shipping

There are two key to achieving an accurate, productive flow of goods in the facility:

1) Receiving clerks must be well trained to evaluate incoming goods and match product with carrier counts, vendor documentation, and the purchase order 2) Coordination of the receiving and put-away operations is needed

What are the seven principles of supply chain management?

1) Segment customer based on needs 2) Customize Logistics Network 3) Listen to Market Signals and plan accordingly 4) Differentiate products closer to customers 5) Source strategically 6) Develop supply chain technology strategy 7) Adopt channel-spanning measures

When a product is not available to meet demand, several consequences might occur

1) The customer might be willing to wait and accept a later shipment 2) The customer might decide to purchase a competitor's product in this instance, resulting in a direct loss of profit and revenue for the supplier 3) The customer might decide to permanently switch to a competitor's product, thus resulting in the loss of future profits and revenues for the supplier

What are the three principle supply chain information requirements that support effective decision making?

1) The information in a system must meet quality standards to support fact-based decision making 2) THe information must readily flow within and between organizations 3) The information must support multiple types of supply chain decisions

To compete at a high level to pursue supply chain technology capabilities to achieve personalization at a scale, a company must succeed on three fronts

1) The system must facilitate excellent performance across the plan, buy, make, move, and return processes of a supply chain 2) A cohesive network of integrated technologies, skilled people, and robust processes must be established 3) Common risks must be identified and mitigated to maximize the return on technology investments

There are three general types of for-hire carriers:

1) Truckload (TL) carriers 2) Less-than-truckload (LTL) carriers 3) Small package carriers

In traditional distribution operations, four primary functions are carried out:

1) accumulation 2) sortation 3) allocation 4) assortment

The basic principles underlying the concept of VMI:

1) the supplier and its customer agree on which products are to be managed using VMI in the customer's distribution centers 2) an agreement is made on reorder points and economic order quantities for each of these products 3) as these products are shipped from the customer's distribution center, the customer notifies the supplier, by SKU, of the volumes shipped on a real time basis 4) the supplier monitors on-hand inventories in customer's distribution center, and when the on-hand inventory reaches the agreed upon reorder point, the supplier creates an order for replenishment, notifies the customer's distribution center of the quantity and time of arrival, and ships the order to replenish the distribution center

What are the four principal categories for performance metrics?

1) time 2) quality 3) cost 4) miscellaneous or support

What are the goals of the MRP system?

1) to ensure the availability of materials, components, and products for planned production and for customer delivery; 2) maintain the lowest possible inventory levels that support service objectives 3) plan manufacturing activities, delivery schedules, and purchasing activities

The College-Industry Council of Material Handling Education classifies materials-handling equipment into five major categories:

1) transport equipment 2) positioning equipment 3) unit load formation equipment 4) storage equipment 5) identification and control equipment

Four major elements underlie the theoretical JIT concept:

1) zero inventories 2) short, consistent lead times, 3) small; frequent replenishment quantities 4) high quality, or zero defects

4PL

Firms that provide broader scope of services to help manage elements of the supply chain

Lambert, Emmelhainz, and Gardner's partnership model

Incorporates the identification of "drivers" and "facilitators" of a relationship. It indicates that for a relationship to have a high likelihood of success, the right drivers and facilitators should be present

How is inventory value calculated?

Inventory value is calculated by multiplying the number of units in the container times the manufactured cost of each item divided by 365 days

Full collaboration

Is the dynamic combination of both vertical and horizontal collaboration. Only with full collaboration do dramatic efficiency gains begin to occur. With full collaboration, it is intended that benefits accrue to all members of the collaboration

What is the most widely used mode of transportation in the U.S. domestic supply chain?

Motor carriage

combination carriers

Move freight and passengers, with cargo loaded in belly of the aircraft

reorder point

The minimum stock level at which an order must be placed

inventory risk cost

This cost reflects the very real possibility that inventory dollar value may decline for reasons beyond an organization's control.

Manufacturing Resource Planning (MRP II)

a technique used to plan and manage all the organization's resources and reaches far beyond inventory or even production control to all planning functions of an organization

Distribution Requirements Planning (DRP)

a widely used and potentially powerful technique for outbound logistics systems to help determine the appropriate level of inventory to be held to meet both cost and service objectives. DRP determines replenishment schedules between an organization's manufacturing facilities and its distribution centers

Master Production Schedule (MPS)

based on actual customer orders as well as on demand forecasts, the master production schedule drives the entire MRP system. The MPS details exactly what independent demand items an organization must produce and when they ar eneeded

MRP program

based on the independent item need specified in the MPS and on information from the BOM, the MRP program first disaggregates the end-product demand into gross requirements for individual parts and other materials

disruptive innovation

based on the theory that new entrants coming into an existing market can gain footholds in areas neglected by incumbent companies

There are four major components of inventory carrying cost:

capital cost, storage space cost, inventory service cost, and inventory risk cost

Refined Product Pipelines

carry petroleum products- gasoline, jet fuel, home heating oil, and diesel fuel- from refineries to large fuel terminals with storage tanks in almost every state in the country

Horizontal collaboration

refers to relationships that may be buyer to buyer and/or seller to seller, and in some cases even between competitors. Essentially, this type of collaboration refers to business arrangements between firms that have parallel or cooperating positions in the logistics or supply chain process. A horizontal relationship may be thought of as a service agreement between two or more provider firms based on trust, cooperation, shared risk and investments, and following mutually agreeable goals

frugal innovation

refers to the belief that many emerging and developing markets are driving innovation of simple, no-nonsense products and services that replicate more complex offerings available in the developed markets

Reliability

refers to the consistency of the transit time provided by a transportation mode

the "pull" approach

relies on customer orders to move product through a logistics system

Mobile internet (MI) and communication technologies

represent the combination of mobile computing devices, high speed wireless networks, and associated applications

unit load formation equipment

restricts materials so that they maintain their integrity when being moved or stored as a single load

costs

the expenditures associated with operating the supply chain

flexibility

the flexibility of the supply chain in responding to marketplace changes to gain or maintain competitive advantage

What is a major benefit of VMI

the knowledge gained by the supplier of real-time inventory levels of its products at its customer location

What is railroad transportation primarily used for?

the long distance movement of low-value goods

hurdle rate

the minimum rate of return on new investments

bill of lading (BOL)

the most important transportation document. The BOL provides all the information the carrier needs to accomplish the move, stipulates the transportation contract terms, including the scope of the carrier's liability for loss and damage, acts as a receipt for the goods the shipper tenders to the carrier and in some cases shows certificate of title to the goods

What do the primary facility operations focus on?

the movement and storage of product

order cycle time (OCT)

the number of late deliveries per 100 shipments

reliability

the performance of the supply chain in delivering the correct product, to the correct place, at the correct time, in the correct condition and packaging, in the correct quantity, with the correct documentation, to the correct customer

slotting

the placement of product in a facility for the purpose of optimizing materials handling and space efficiency