Operations Management - Ch 10 Supply Chain Management

What are 2 basic ways to improve supply chain structure?

1) Change structure - products and services offered, tye types and locations of facilities, process technology and layouts, and vertical integration. 2) Change infrastructure - roles and responsibilities of employees, suppliers and how they are managed, systems, information systems, production and inventory control, and quality control systems.

What is the total supply chain cost?

1) Cost of materials and components from suppliers 2) Producer added fabrication and assembly cost 3) Logistics to ship materials cost 4) WIP between firms in the supply chain and the shipped FG inventory to the customer cost

What are the 5 ways to improve supply chain infrastructure?

1) Cross functional teams 2) Partnerships 3) Setup time reduction 4) Information systems 5) Cross docking

Changing and improving supply chain structure can be accomplished in a number of ways. What are the 5 ways?

1) Engaging in forward and backward integration 2) Pursing major process simplification 3) Changing the configuration of factories, warehouses, or retail locations 4) Pursing major product redesign 5) Working with third-party logistics providers

What are the general 3 types of e-procurement services?

1) Online catalogs listing products, prices, specifications, sales, and delivery terms. 2) Third party auctions for buyers and sellers. 3) Private exchanges conducted by major corporations.

What are the 2 fundamental processes being affected dramatically by the internet?

1) Order placement 2) Order fulfillment

How do we measure supply chain performance of quality?

1) Product or service performance 2) Conformance to specifications 3) Customer satisfaction

What are the four system dynamics in supply chains?

1) Supply chain is a highly interactive system. Decisions in each part of the chain affect the other parts. 2) There is an accelerator (bull whip) effect 3) Even with perfect information, replenishment lead times will lead to an accelerator effect. 4) The best way to improve a supply chain is to reduce the total replenishment time and to feed back actual demand information to all levels.

How do we measure supply chain performance of flexibility?

1) Time to change volume of output by a fixed amount 2) Time it takes to change the mix of products or services delivered.

How do we measure supply chain performance of time?

1) Total throughput time 2) Cash to cash cycle

How do we measure supply chain performance for delivery?

1) on time delivery on entire order 2) Fill Rate 3) Lead time

What is E-procurement?

Allows company to interact electronically with its suppliers through B2B connections.

What is B2C?

Business to consumer.

What are three key decisions typifying the responsibilities of the logistics function?

Choice of transportation, packaging and materials handling, and the location and management of storage points.

What is functional silos?

Different departments managing different aspects of the supply chain.

What is off-shoring?

Firm moves work performed internally to another facility beloning to the same firm but in another country.

What is demand management?

Flip side of supply management, refers to decisions that are taken to affect the quantities demanded of one or more products that are served by a supply chain. Decisions undertaken by marketing and include mechanisms such as what products and product features to offer, what pricing should be, how products are promoted, etc.

What is cash to cash cycle time?

Measure how quickly a firm is paid by its customers relative to how quickly it has to pay its suppliers. Cash to cash cycle time = Days in inventory + days in AR - Days in AP

Can increasing the cash to cash cycle time improve a firm's profitability?

No, decreasing it will If it is decreased, it means the company gets its money before it has to pay its suppliers.

What does Forward and backward integration mean?

Ownership within the supply chain. Example: manufacturer buys a wholesale firm and distributes its products only through the wholesaler (forward integration). Manufacturer buys a supplier company (backward integration). One firm owns the entire supply chain (total vertical integration).

What are the use of partnerships?

Partnerships start with a commitment by both firms to establish a long-term business relationship that will be mutually beneficial. Trust must be developed. Establish teams of employees.

What is the use of cross functional teams?

Provide coordination that is lacking across the various departments and functions of a business.

What does purchasing do?

Sources inputs into the transformation process of the firm from other for-profit and nonprofit organization. 1) Make or buy 2) Supplier management strategies for sourced items 3) Supplier qualifications and selection 4) Ongoing supplier evaluation and relationships 5) Strategic partnerships with suppliers 6) Supplier involvement in design 7) Sourcing strategy

What is cross docking?

Supplier's shipments are taken from various docks at the warehouse when they arrive and transferred directly to a walmart truck at another dock. Items do not spend time in the warehouse's inventory.

What is Supply Chain Management?

The design and management of seamless, value-added processes across organizational boundaries to meet the real needs of the end customer.

What is Supply Chain?

The set of entities and relationships that cumulatively define materials and information flows both downstream towards the customer and upstream towards the very first supplier.

What is supply base reduction?

Too many suppliers and are reducing the number of suppliers by one half or more.

What does logistics do?

Typically responsible for the actual movement and storage of goods across organizations in a supply chain. 1) Transportation mode 2) Materials handling and warehousing 3) Packaging 4) Storage locations within a supply chain 5) Shipping policies 6) Third-party logistics providers

What is outsourcing?

Work that traditionally performed internally is delegated to another firm.

What is the accelerator (bull whip) effect?

is an observed phenomenon in forecast-driven distribution channels. It refers to a trend of larger and larger swings (variability) in inventory in response to changes in demand, as one looks at firms further back in the supply chain for a product.

What is demand chain management?

is the management of upstream and downstream relationships between suppliers and customers to deliver the best value to the customer at the least cost to the demand chain as a whole.

What is reverse logistics?

the movement, storage, and disposal of goods that are returned by the customer.

What is global sourcing?

the practice of procuring needed goods and services without being constrained to geographic regions.