MGT 325 Ch. 10-11

bar code; bar coding; bar code; bar code information

A _____________ is what is referred to as an "automated data collection" system, or "auto-ID." In ____________, computer-readable codes are attached to items flowing through the supply chain, including products, containers, packages, and even vehicles. The ______________ contains identifying information about the item. It might include such things as a product description, item number, its source and destination, special handling procedures, cost, and order number. When the _____________________ is scanned into a company's computer by an electronic scanner, it provides supply chain members with critical information about the item's location in the supply chain.

supply chain; supply

A __________________ encompasses all activities associated with the flow and transformation of goods and services from the raw materials stage to the end user (customer), as well as the associated information flows. (aka The facilities, functions, and activities involved in producing and delivering a product or service from suppliers (and their suppliers) to customers (and their customers).) In essence, it is all the assets, information, and processes that provide "________." It is made up of many interrelated members, starting with raw material suppliers and including parts and components suppliers, subassembly suppliers, the product or service producer and distributors, and ending with the end-use customer.

poor, or comparatively low, inventory turnover; good (or poor) number of inventory turns; comparisons;

A ______________________________ indicates that a large amount of inventory is required to satisfy demand. In general, a _________________________ is relative to what is being achieved at various stages across a company and what the industry norm is. Only ____________ of inventory turns for companies within the same industry are meaningful. Comparing a supermarket to a car dealer is not meaningful; a supermarket sells fast-moving products so its inventory turns will be higher than a car dealer that sells slow-moving items.

value; collaborate; integrate

A common thread among these perceptions of supply, value, and demand chains is that of _________. _________ to the customer is good quality, a fair price, and fast and accurate delivery. To achieve ________ for the customer, the members of the supply chain must act as partners to systematically create ________ at every stage of the supply chain. Thus, companies not only look for ways to create _______ internally in their own production processes, but they also look to their supply chain partners to create ________ by improving product design and quality, enhancing supply chain performance and speed, and lowering costs. To accomplish these value enhancers, supply chain members must _______________ with each other and _________________ their processes.

e-auction

A company posts orders on the Internet for suppliers to bid on.

supply, demand, and product management; respond quickly and efficiently; operational and innovation excellence; Operational excellence; innovation excellence

A demand-driven value chain is considered to be a global supply chain that is organized according to three overlapping areas of responsibility: .... When these processes work together, are visible to each other, and communicate, then a company can ________________________ to opportunities that arise from customer or market demand (i.e., it is demand-driven and thus creates value for all parts of the supply chain). Key features of this vision of a supply chain are _____________________________. ___________________________ delivers products to customers as promised; while ____________________________ makes sure customers want what's being made and shipped by embedding innovation within operations and not isolating it in a lab.

spend analysis

A formal process usually incorporating software for analyzing spend data to lower procurement costs.

reliability, responsiveness, agility, costs, and asset management; customer-focused; internally; quantitative metrics; 250; strategic; processes; diagnostic

A primary feature of the SCOR model is a set of five performance attributes of a supply chain—_____________________________________________—that enable it to be analyzed and evaluated against other competing supply chains. Reliability, responsiveness, and agility are more _________________ attributes, while cost and asset management are more _________ focused. Associated with each performance attribute are various ______________________ that an organization can calculate to determine how well its supply chain is performing within its industry. There are over _____ SCOR metrics organized within a three tiered hierarchy according to level 1 (__________), level 2 (_________), and level 3 (____________).

sustainability; Sustainability; current or future generations; human and social resources; sustainability; not feasible; business objectives

Achieving _____________________, also referred to as "going green," has become one of the most visible recent trends in operations and supply chain management. ________________, according to the United Nations, is "meeting present needs without compromising the ability of future generations to meet their needs." Implicit in this definition is not depleting or abusing our natural resources like air, water, land, and energy in a way that's going to harm ____________________________. For businesses it also means sustaining _________________________. However, to many companies, _____________ means becoming environmentally friendly and socially conscious (i.e., "green") at the expense of competitiveness and higher costs. A common perception among many U.S. and European corporations is that requiring suppliers, especially in developing countries, to use green practices is _______________ because they do not face the same governmental, cultural, and social pressures; that green manufacturing will require costly new equipment and processes; and that the customer market for products designed with green attributes is "soft." As a result, companies often view social and environmental responsibility separately from _________________________.

days (or weeks) of supply; days of supply = average aggregate value of inventory/((COGS)/(365 days))

Another commonly used KPI is _______________________. This is a measure of how many days (or weeks) of inventory is available at any point in time. It is computed by dividing the aggregate average value of inventory by the daily (or weekly) cost of goods sold,

fill rate; Fill rates; High fill rates

Another frequently used KPI is ____________. _____________ are the fraction of orders placed by a customer with a supplier distribution center or warehouse that are filled within a specific period of time, typically one day. _______________ indicate that inventory is moving from the supplier to the customer at a faster rate, which thereby reduces inventory at the distribution center.

risk trade-offs; demand forecasts; product offerings

Another way to manage risks is to build _____________________ into product and service designs to include fewer parts and product variability. Reducing the number of product components allows a company to meet demand with fewer products and fewer suppliers. Having common product components that can be used in a lot of different products enables a company to pool its forecasts for component demand, resulting in fewer _____________________. (The more forecasts, the more chances for errors.) Reducing ___________________ can have the same effect—it's easier to forecast demand for a smaller number of product configurations than a larger number.

supply chain; value chain; value chain

Are there any differences among the various terms (the supply chain, value chain and demand-driven value chain)? The traditional view of a _____________ was that it focused somewhat narrowly on the activities and processes associated with material management and logistics that convert raw materials and subassemblies into a manufactured product—plan, source, make, and deliver. However, a _____________ (aka A more contemporary name for a supply chain.) is thought to have a broader focus with a more important and visible corporate presence that might also include such functions as customer management, new product innovation and launch, post-sales support, and change management. In this context, the ultimate goal of a ___________________ is the delivery of maximum value to the end user.

True

Companies also accumulate inventory because they may order in large batches to keep down order and transportation costs or to receive a discount or special price from a supplier. However, inventory is very costly. Products sitting on a shelf or in a warehouse are just like money sitting there not being used when it could be used for something else. It is estimated that the cost of carrying a retail product in inventory for one year is between 18% and 35% of what the item cost. Inventory-carrying costs are almost $500 billion per year in the United States. As such, suppliers and customers would like to minimize or eliminate it.

back upstream; demand variability; bullwhip effect; back upstream

Distorted information or the lack of information, such as inaccurate demand data or forecasts from the customer end can ripple _________________ through the supply chain and magnify __________________ at each stage. This can result in high buffer inventories, poor customer service, missed production schedules, wrong capacity plans, inefficient shipping, and high costs. This phenomenon, which has been observed across different industries, is known as the ______________________. It occurs when slight-to-moderate demand variability becomes magnified as demand information is transmitted ______________ in the supply chain.

True

Every time product items are sold that are equal to the average amount of money that was invested in those items, then the inventory has been turned. An item whose inventory is sold (i.e., turns over) once a year has higher holding costs (for rent, utilities, insurance, theft, etc.) than one that turns over twice, three times, or more in that same time period.

universally implemented; costly; Radio waves; diffused by water

However, RFID technology does have disadvantages. RFID technology is not yet __________________ across different logistics systems and companies, which makes it difficult to track items that move from one system to another. Using RFID is more _________ than using barcodes: Individual RFID tags are expensive relative to barcodes, and the readers are costly. _______________ don't go through metal and are _____________________.

natural disasters; operational issues

However, risks do not just evolve from __________________. Risks are also inherent in a variety of potential ____________________ including transportation and logistics disruptions; customer and supplier communication failures; product, processes, and supply chain design failures; changes in regulatory/customs documentation and environmental requirements; security issues and terrorism threats; data thefts and computer system breaches; marketplace changes; and supplier insolvency to name just a few of the many possible sources of risk.

reduced profits and competitiveness; sustainability; Green initiatives; reduce costs and increase revenues

However, there is a growing realization among many companies that the social and environmental benefits of developing sustainable products do not have to come at the expense of ______________________. As these companies have learned, _______________ can, in fact, be cost-effective and profitable and provide the impetus for product and process innovations. ________________ can lower costs because fewer resources are used, and additional revenues can result from better products or new businesses. Further, by designing products that can be recycled or reused, companies can reduce waste, thereby lowering costs. Thus, while a commitment to green practices can create a better image for companies among consumers (and the government), they can also _________________________________.

improve processes and reduce costs; sustainability goals

Improving fuel efficiency in a distribution fleet, having employees telecommute, using eco-friendly packaging materials, building energy-efficient facilities, reducing the use of wooden pallets, and even turning the thermostat up in summer and down in winter are initiatives that ______________________________, and also achieve ________________.

quality improvement programs; wasted resources; quality management; profitability and competitiveness

Many companies already have __________________________ in place that require suppliers to adhere to continuous improvement goals of eliminating returned products, thus reducing waste; poor quality translates to ____________. The same ___________________ focus on reducing waste can work to achieve sustainability goals. The cost of poor quality can have a significant impact on a company's _________________________, and quality costs may often come from suppliers along the supply chain, including the cost of materials, labor, and resources for reworking defective products; the cost of shipping delays and customer service errors; and the cost of product replacement and waste.

Internet

No technology has a bigger impact on supply chain management, and business in general, than the ___________. Through the ______________ a business can communicate with customers and other businesses within its supply chain anywhere in the world in real time. The ____________ has eliminated geographic barriers, enabling companies to access markets and suppliers around the world that were previously inaccessible. By doing so, the ____________ has shifted the advantage in the transaction process from the seller to the buyer, because the Internet makes it easier for companies to deal with many more suppliers around the world in order to get lower prices and better service. The ___________ adds speed and accessibility to the supply chain. Companies are able to reduce or eliminate traditional time-consuming activities associated with ordering and purchasing transactions by using the ______________ to link directly to suppliers, factories, distributors, and customers. It enables companies to speed up ordering and delivery, track orders and delivery in real time, instantaneously update inventory information, and get instantaneous feedback from customers. This combination of accurate information and speed allows companies to reduce uncertainty and inventory. _____________ commerce is expected to exceed $6 trillion in this decade.

synchronize; uncertainty; variability; lateness and incomplete orders; poor-quality customer service; inventory

One of a company's main objectives in managing its supply chain is to _____________ the upstream flow of incoming materials, parts, subassemblies, and services with production and distribution downstream so that it can respond to uncertainty in customer demand without creating costly excess inventory. Examples of factors that contribute to _____________, and hence ________________, in the supply chain are inaccurate demand forecasting, long variable lead times for orders, late deliveries, incomplete shipments, product changes, batch ordering, price fluctuations and discounts, and inflated orders. The primary negative effects of supply chain uncertainty and variability are __________________________. If deliveries from suppliers are late or incomplete, they slow down the flow of goods and services through the supply chain, ultimately resulting in __________________________. Companies cope with this uncertainty and try to avoid delays with their own form of "insurance," ___________. (aka Insurance against supply chain uncertainty.)

in sync; supply chain integration; Information technology; Information sharing; Collaborative planning; Workflow coordination; supply chain performance

One of the keys to having a successful, efficient supply chain is to get the various supply chain members to collaborate and work together—that is, to get ___________. This level of coordination is referred to as __________________. ________________ is the key element in achieving supply chain integration through four areas—information sharing, collaborative planning, workflow coordination, and the adoption of new models and technologies. __________________ includes any data that are useful to other members of the supply chain such as demand data, inventory stocks, and production and shipping schedules—anything that can help the supply chain members improve performance. Information needs to be transparent (i.e., not hidden) and easily accessible online. ____________________ defines what is done with the information that is shared. _______________ defines how supply chain partners work together to coordinate their activities. Finally, adopting new business models and technologies is how supply chain members redesign and improve their _______________________.

Internet of Things (IoT)

One of the newest digital innovations affecting supply chain management is the ______________. ____ merges the digital world with the physical; it extends Internet connectivity beyond standard devices like desktops, laptops, smartphones, and tablets to a network of non-Internet physical devices and everyday objects like vehicles and home appliances, as well as components of machines. On a personal basis it can monitor our footsteps, heartbeats, home and office lighting, and temperature. However, it has been projected that the most significant impact of ______ will be in supply chain management. ____ can improve customer service with more and better information by providing the ability to track and monitor shipments in real time using RFID sensors. Connected devices and communication channels enable access to real-time transport status, including location, temperature, and diagnostics. This can increase the overall speed and reliability of supply chain movement. _____ has the capability to automatically recognize the need to order and restock on a machine-to-machine basis without human interaction; for example, a vending machine can reorder items immediately without waiting for a service person to check the machine and make the order. It can provide preventive maintenance using sensors and connected devices to monitor and react to machine issues before there is a failure, and it can order a replacement part and schedule maintenance, thus helping everything from vehicles to factories run longer. ______ can also control physical manufacturing facilities environments by controlling lighting and temperature.

procurement

Purchasing goods and services from suppliers, or _______________, plays a crucial role in supply chain management.

procurement

Purchasing goods and services from suppliers.

product management

R&D, innovation, engineering, and product development

On-demand (direct-response) delivery

Requires the supplier to deliver goods when demanded by the customer.

information; inventory; information; information technology

Supply chain managers like to use the phrase "in modern supply chain management, _________________ replaces _____________." Although this statement is not literally true—companies need inventory at some point, not just information—____________ does change the way supply chains are managed, and these changes can lead to lower inventories. Without _______________________, supply chain management would not be possible at the level it is currently being accomplished on a global basis.

buffer (or extra) inventory

Supply chain members carry _____________________ at various stages of the supply chain to minimize the negative effects of uncertainty and to keep goods and services flowing smoothly from suppliers to customers. For example, if a parts order arrives late (or does not arrive at all) from a supplier, the producer is able to continue production and maintain its delivery schedule to its customers by using parts it has stored in inventory for just such an occurrence.

information sharing; third party; blockchain; third-party validations; blockchains; Blockchains; Blockchains

Supply chains generally lack trust among members, which greatly inhibits ________________, so creating trust among supply chain members (as blockchains appear to do) would be a significant benefit. It has initially been attractive to financial institutions because it enables users to securely send money (or other information) directly to one another without a ___________ that typically slows the transaction process. So for a financial transaction that might involve a bank, a ____________ would eliminate the time (hours and sometimes days) required for the bank to verify the transaction and the fees the bank might charge. If ________________ are not required, processes (including supply chains) can speed up with correspondingly more security. For supply chains, ___________ have the potential to improve the way transactions are conducted and items are tracked. ______________ provide a means to have more consistent and secure record keeping of transactions that helps avoid the disputes over the accuracy of transactions that can often occur between supply chain members. They can facilitate billing and payment processing. _____________ also enable more accurate real-time tracking of product movement (i.e., orders and deliveries between suppliers and customers) because of more accurate and secure record keeping.

collaboration, cooperation, and communication; information; rapid flow of information; goals; trust; quality and timeliness; communication; information

Supply chains require close __________________________________ among members to be effective. Suppliers and their customers must share ____________. It is the ______________________ among customers, suppliers, distributors, and producers that characterizes today's supply chain management. Suppliers and customers must also have the same _________. They need to be able to ______ each other. Customers need to be able to count on the __________________ of the products and services of their suppliers. Furthermore, suppliers and customers must participate together in the design of the supply chain to achieve their shared goals and to facilitate _______________ and the flow of ___________________.

Continuous replenishment

Supplying orders in a short period of time according to a predetermined schedule.

supply chain; procurement; production; distribution; integrates

The __________________ is also an integrated group of business processes and activities with the same goal—providing customer satisfaction. These processes include the _____________ of services, materials, and components from suppliers; ______________ of the products and services; and __________________ of products to the customer, including taking and filling orders. Information and information technology tie these processes together; it is what "______________" them into a supply chain.

bullwhip effect; actual demand; stockpile extra inventory; security blanket of inventory; stable; small; increase its own demand; reduces its own demand; manufacturer; share information; transparency

The ____________________ is created when supply chain members make ordering decisions with an eye to their own self-interest and/or they do not have accurate demand information from the adjacent supply chain members. If each supply chain member is uncertain and not confident about what the __________________ is for the succeeding member it supplies and is making its own demand forecast, then it will ____________________ to compensate for the uncertainty. In other words, they create a ____________________________. Demand for the end user is relatively ________ and the inventory is ________. However, if slight changes in demand occur, and the distributor does not know why this change occurred, then the distributor will tend to overreact and ____________________ or, conversely, ________________________ too much if demand from its customer unexpectedly drops. This creates an even greater overreaction by the __________________ who supplies the distributor and the suppliers who supply the manufacturer. One way to cope with the bullwhip effect is for supply chain members to _______________________, especially demand forecasts. If the supply chain exhibit ______________, then members can have access to each other's information, which reduces or eliminates uncertainty.

cost of goods sold

The ______________________ is only for finished goods, valued at cost, not the final sale price (which might include discounts or markups).

supply chain operations reference (SCOR) model; SCOR model; six; linked and compared; Deming Wheel (PDCA cycle); Six Sigma DMAIC steps

The __________________________ is a supply chain diagnostic tool that provides a cross-industry standard for supply chain management. The purpose of the _____________ is to define a company's current supply chain processes, quantify the performance of similar companies to establish targets to achieve "best-in-class" performance, and identify the practices and software solutions that will yield "best in class" performance. It is organized around a set of ____ primary management processes—plan, source, make, deliver, return, and enable. These processes provide a common set of definitions, or building blocks, that SCOR uses to describe any supply chain, from simple to complex. This allows supply chains for different companies to be _________________. The closed-loop nature of these processes is similar to the _____________________ and the _____________________.

average aggregate value of inventory; average aggregate value of inventory =SUM(avg inventory for item i) x (unit value i)

The ______________________________ is the total value (at cost) of all items being held in inventory, including such things as raw materials, work-in-process (WIP), and finished goods. It is computed by summing, for all individual inventory items, the product of the average number of units on hand in inventory at any one time multiplied by the unit value:

forecast; plans and schedules; Parts and materials; stored; external or internal customers; transform

The delivery of a product or service to a customer is a complex process, encompassing many different interrelated processes and activities. First, demand for a product or service is _________, and ____________________ are made to meet demand within a time frame. The product or service can require multiple suppliers (who have their own suppliers) who prepare and then ship parts and materials to manufacturing or service sites. __________________ are transformed into final products or services. These products may then be _________ at a distribution center or warehouse. Finally, these products are transported by carriers to ________________________. However, this may not be the final step at all, as these customers may ______________ the product or service further and ship it on to their customers. All of this is part of the supply chain—that is, the flow of goods and services from the materials stage to the end user.

downstream; back upstream; 80%

The impetus for, and commitment to, sustainability generally comes from _______________ in the supply chain and moves __________________ to include suppliers. Companies have found that suppliers can account for as much as ____ of the resources consumed in a product's supply chain. Companies must work with and guide suppliers to reduce the inefficient use of resources, reduce the use of raw materials, reduce waste, and recycle. Suppliers can be coerced into using green practices by threats, demands, or incentives, or a combination.

increase value; demand-driven value chain

The objective of supply chain management is to ___________________ for any part or all of the chain. In reality, all of these names have come to mean approximately the same thing to most people, and the terms are frequently used interchangeably—a supply chain is a _____________________, and vice versa.

Outsourcing

The purchase of goods and services from an outside supplier.

sourcing

The selection of suppliers.

raw material providers; upstream supply chain members; downstream supply chain members; information

The supply chain begins with suppliers, which can be as basic as _____________________. These suppliers are referred to as ________________________________, while the distributors, warehouses, and eventual end-use customers are referred to as ______________________________. Also note that "___________________" is the "heart and brains" of the supply chain.

e-marketplaces

Websites where companies and suppliers conduct business-to-business activities.

risk; "lean" supply chains; extra inventory

When supply chains stretch over long distances and multiple locations around the world, uncertainty, and therefore _______, increase. In _________________________, there is little redundancy and slack (i.e., inventory), so when disruptions occur—natural or otherwise—the effects can cascade through the supply chain, slowing or stopping normal operations and eventual customer order fulfillment. As suggested previously, one way to offset uncertainty is by carrying _______________ at various points along the supply chain; however, as we have also noted, this is an expensive solution for handling uncertainty and risk. Instead, a number of innovative companies with top supply chains have begun to engage in formal "risk management" to cope with supply chain uncertainty.

barcode; radio frequency identification (RFID); RFID; RFID; RFID "tag"; RFID scanners; Electronic Product Code (EPC); RFID; RFID tags; RFID readers; RFID; RFID

While a __________ is the most commonly used auto-ID system, a more technologically advanced system is _______________________. ________ technology uses radio waves to transfer data between a reader (that is, a scanner) and an item such as a shipping container or a carton. ________ consists of a tiny microchip and computer, often a small, thin ribbon, which can be put in almost any form—for example, between layers of cardboard in a box or on a piece of tape or a label. An ___________________ stores a unique identification number. ______________ transmit a radio signal via an antenna to "access" the tag, which then responds with its number. The tag could be an _________________________, which could be linked to databases with detailed information about a product item. ________ has several advantages over barcodes. ____________ do not need a direct "line of sight" to read, and many tags can be read simultaneously over a long distance. When products arrive at a location, such as a retail store, shipping dock, or warehouse, each barcode has to be scanned individually, whereas __________________ placed at an entry site (like a door) can scan a whole pallet of different products automatically and instantaneously. As such, _______ provides complete visibility of product location, is faster, reduces labor usage, and is more accurate than barcodes. With barcodes it is difficult to know how much product is in a store; however, RFID readers inside a store (or warehouse) can continuously monitor what is available, and when the inventory reaches a certain level it can be reordered. When items are stored in a warehouse, the barcode on the item to be stored has to be scanned as well as the barcode fixed to the location; _______ eliminates these steps.

Inventory; buffer; costly; lowering inventory levels (and costs); key performance indicators (KPIs) or metrics

______________ is a key element in supply chain management. On one hand, it enables a company to cope with uncertainty by serving as a _________ between stages in the supply chain. Inventory allows items to flow smoothly through the system to meet customer demand when stages are not in sync. On the other hand, inventory can be very __________. Thus, it is important for a company to maintain an efficient supply chain by __________________________ as much as possible. In order to accomplish this objective, several numerical measures, also called _________________________________________, are often used to measure supply chain performance. Three of the more widely used key performance indicators are inventory turnover, inventory days of supply, and fill rate.

Blockchains

_______________ are a recent information technology innovation that is expected to have significant implications for supply chain management. A ____________ is a digital distributed (or shared) ledger that can be programmed to record financial and other transactions that is incorruptible and secure. The name ________________ comes from information that is lumped together (i.e., in blocks) and put in chronological order (i.e., in chains). Each block is time-stamped and given a digital fingerprint linked to the digital fingerprint of the previous block, thus creating the chain. The information stored in the encrypted ledger can be viewed by anyone with access, which enables the validity of every transaction to be verified by all users in the _______________ network. So if someone tries to hack the system, the verified users can recognize the invalid action.

Supply chains; physical good; human resources and support services; tiers; definable

________________ for services are sometimes not as easily defined as they are for manufacturing operations. Since the supply chain of a service provider does not always provide the customer with a ________________, its supply chain does not focus as much on the flow of physical items (material, parts, and subassemblies) through the supply chain. It instead may focus more on the _____________________ necessary to provide its own service. The supply chain of a service provider also tends to be more compact and less extended than a manufacturing supply chain. It generally does not have as many _______ of suppliers, and its distribution network is smaller or nonexistent. However, supply chains of service companies are ________________ and can be effectively managed using many of the same principles. Service companies and organizations have suppliers (who have suppliers), and they distribute their products to customers (who may have their own customers).

Information; real-time, online communications; enablers; enabler

_________________ is the essential link between all supply chain processes and members. Computer and information technology allows ___________________________ throughout the supply chain. Technologies that enable the efficient flow of products and services through the supply chain are referred to as "______________," and information technology has become the most important ______________ of effective supply chain management.

Bar code technology; bar codes; scanners; point-of-sale data; instantly transmitted; Point-of-sale data

__________________ has had a huge influence on supply chain management, and it is used by thousands of companies in different situations. Package delivery companies like FedEx and UPS use ________________ to provide themselves and customers with instantaneous detailed tracking information. Supermarkets use __________ at cash registers to read prices, products, and manufacturers from Universal Product Codes (UPCs). When bar codes are scanned at checkout counters, it also creates ____________—an instantaneous computer record of the sale of a product. This piece of information can be ____________ throughout the supply chain to update inventory records. _______________ enable supply chain members—suppliers, producers, and distributors—to quickly identify trends, order parts and materials, schedule orders and production, and plan for deliveries.

Risk pooling; pool risks; single location; demand variability; shorten lead times

___________________ is an approach to managing risks in which an attempt is made to aggregate risks to reduce the impact of individual risks. One way to _____________ is to combine inventories from multiple at-risk locations into a few, or one, location, like a warehouse or distribution center, in a more risk-free environment. It is well known that it is more economical to hold inventory at a _______________ than to disperse it across a number of customer locations. Doing so reduces the overall inventory investment needed to achieve a target service level across all the customers supplied by a distribution center, which, in effect, reduces ___________________. Adding a distribution center between a supplier and a customer can also ____________________, which is another way to pool risks (i.e., it's more costly to meet variations in demand from several locations than from one).

E-business; e-business; labor costs and time

___________________ replaces physical processes with electronic ones. In __________, supply chain transactions are conducted via a variety of electronic media, including electronic data interchange (EDI), email, electronic funds transfer (EFT), electronic publishing, image processing, electronic bulletin boards, shared databases, bar coding, fax, automated voice mail, CD-ROM catalogs, the Internet, websites, and so on. Companies are able to automate the process of moving information electronically between suppliers and customers. This saves both ___________________.

Risk management; building resiliency (or continuity)

___________________ requires due diligence to evaluate and anticipate the likelihood and possible impact of unexpected supply chain disruptions, which can be operational, economic, marketplace, or natural, and plan ahead for them. In recent years as a result of a global economic downturn and several natural disasters, including an earthquake in Japan, floods in Thailand, and a volcanic eruption in Iceland, companies have altered their approach to supply chain management to incorporate formal ongoing risk management processes to identify and plan for possible disruptions. This is referred to as _____________________________ into the supply chain. These processes include identifying circumstances in advance that could cause disruptions, monitoring events worldwide to anticipate disruptions, and developing contingency plans for the occurrence of disruptions, including a pool of alternative suppliers, logistics providers, and energy sources to fall back on when disruptions occur.

Inventory turnover (or turns); Inventory turns = COGS/Avg Aggregate value of inventory

_______________________ is computed by dividing the cost of goods sold (i.e., the cost of annual sales) by the average aggregate inventory value:

Enterprise resource planning (ERP); ERP software; ERP; ERP

__________________________ is software that helps integrate the components of a company, including most of the supply chain processes, by sharing and organizing information and data among supply chain members. It transforms transactional data like sales into useful information that supports business decisions in other parts of the company. For example, when data such as a sale becomes available in one part of the business, it is transmitted through _____________, which automatically determines the effects of the transaction on other areas, such as manufacturing, inventory, procurement, invoicing, distribution, accounting, and on suppliers. Through these information flows, _____ organizes and manages a company's supply chain. Most ______ vendors, systems handle external, Web-based interactions and have software specifically for supply chain management called "SCM."

Electronic data interchange (EDI); data exchange; EDI; bullwhip effect; EDI

___________________________ is a computer-to-computer exchange of business documents in a standard format, which has been established by the American National Standards Institute (ANSI) and the International Standards Organization (ISO). It creates a ________________ that allows trading partners to use Internet transactions instead of paper when performing purchasing, shipping, and other business. _____ links supply chain members together for order processing, accounting, production, and distribution. It provides quick access to information, allows better customer service, reduces paperwork, allows better communication, increases productivity, improves tracking and expediting, and improves billing and cost efficiency. EDI can be effective in reducing or eliminating the ______________. With _______, supply chain members are able to share demand information in real time and thus are able to develop more accurate demand forecasts and reduce the uncertainty that tends to be magnified at each upstream stage of the supply chain.

Supply chain management (SCM); separate (stand-alone) entity; combined and coordinated effort

_____________________________ focuses on integrating and managing the flow of goods and services and information through the supply chain to make it responsive to customer needs while lowering total costs. Traditionally, each segment of the supply chain was managed as a __________________________ focused on its own goals. However, to compete in today's global marketplace, a company has to count on the __________________________ of all members of the supply chain.

Collaborative planning, forecasting, and replenishment (CPFR); CPFR; discrepancies; CPFR; CPFR; Sharing forecasts

____________________________________ is a process for two or more companies in a supply chain to synchronize their individual demand forecasts in order to develop a single plan for meeting customer demand. With _______, parties electronically exchange a series of written comments and supporting data, which includes past sales trends, point-of-sale data, on-hand inventory, scheduled promotions, and forecasts. This allows participants to coordinate joint forecasts by concentrating on differences in forecast numbers. They review the data together, compare calculations, and collaborate on what is causing ____________________. If there are no exceptions, they can develop a purchase order and ship. _________ does not require EDI; data can be sent via spreadsheets or over the Internet. _________ is actual collaboration because both parties do the work and both parties share in fixing the problems. _______________ in this type of collaborative system can result in a significant decrease in inventory levels for both the manufacturer and distributor since it tends to reduce the "bullwhip effect" and thus lower costs.

Globalization and the evolution of information technology

have provided the catalysts for supply chain management to become the strategic means for companies to manage quality, satisfy customers, and remain competitive.

supply management

manufacturing, logistics, supply planning, and sourcing

demand management

marketing, sales, demand planning, and service