SCM 311 ku exam 1

What is a physiological transformation?

A process where a sick patient receives medical care and advice to become a well patient.

What is a physiological transformation in operations management?

A process where a sick patient receives treatment, such as medication or medical care, to become well.

How does the banking system serve as an example of a supply chain?

ATMs (retail outlets), banks (distribution centers), and the Treasury Department (manufacturer) demonstrate a cash supply chain with specific operational decision

Why is accurate inventory management important in supply chains?

Accurate inventory systems update levels with each transaction, preventing issues such as confirming orders for out-of-stock items and reducing stockouts.

What activities are included in the supply chain according to the Supply Chain Council?

Activities range from sourcing raw materials and components, delivering them to factories, manufacturing products, and then delivering the final products to customers. It also includes handling returns, repairs, or disposals.

How does the ASCM Dictionary define supply chain management?

As the global network used to deliver products and services from raw materials to end customers through a flow of information, physical distribution, and cash.

What are the advantages and limitations of bar codes in supply chain management?

Bar codes improve tracking and inventory but are limited to one-dimensional scanning and require specific reading sequences

What is an example of physical transformation in operations management?

Converting materials into a final product, such as building a house or assembling a computer from subassemblies (e.g., Dell's assemble-to-order business)

What new uncertainties arise in supply chains due to the advent of the Internet?

Customers ordering from various platforms and retailers batching orders

How is entertainment considered a transformation process?

Customers seek entertainment, pay for it, and experience it, with the output being their satisfaction or dissatisfaction based on the quality of entertainment.

What is the primary function of distribution in the supply chain?

Distribution involves the physical movement of products, including receipt, storage, picking, and shipping, with a focus on speed.

What systems need to be integrated for successful supply chain management?

Distribution management, inventory management, inbound transportation, production management, and warehouse management systems.

What is Electronic Data Interchange (EDI)?

EDI is the electronic communication of business transactions such as orders and invoices between organizations, using standard formats for data exchange.

Provide a historical example of warehousing.

Early examples include food storage by prehistoric humans and Joseph's warehouses for Pharaoh in Egypt around 1718 BC.

What does a systemic approach to operations management involve?

Examining inputs, transformation processes, and outputs within a system that includes sourcing, manufacturing, distributing, and consuming products and services.

What key role does operations management play in overcoming challenges?

It helps businesses navigate crises like the dot-com bust, economic downturns, and pandemics by focusing on efficiency and adaptability.

What is the benefit of taking a holistic view of the supply chain?

It highlights the importance of partnering with suppliers to improve quality and performance across the entire supply chain.

How did the COVID-19 pandemic affect the public's understanding of supply chains?

It increased awareness due to panic buying and shortages, though it often led to inaccurate blaming of supply chains for issues.

How did e-commerce impact the organization of distribution centers?

It introduced the need for single item picking areas and returns processing areas.

What is the systems approach in operations management?

It involves viewing every step in production and supply processes as interconnected, from raw materials to product delivery and disposal.

Why is supply chain management considered vital to a company?

It is crucial for the company's survival and success, making it essential to thoroughly study.

What does the APICS Operations Body of Knowledge say about supply chain management?

It is the balancing or synchronizing of supply with demand.

What is the Bull Whip Effect in supply chain management?

It is the phenomenon where small changes in customer demand lead to larger fluctuations in inventory levels up the supply chain.

What is the Cash-to-Cash Cycle time?

It measures the time between receiving payment for products and paying suppliers; a negative cycle means suppliers are paid after customer payments are received.

Why is it important for students to study operations management?

It provides tools and techniques applicable across all business sectors, helping understand business operations and optimize long-term success.

How does digital information flow help in managing supply chain uncertainties?

It reduces uncertainties by providing accurate and timely information.

What is the Bull Whip Effect in supply chains?

It refers to the distortion of information along the supply chain, impacting forecasting and increasing risks.

How does electronic commerce impact order cycle times?

It shortens order cycle times by enabling online orders, leading to faster processing, increased customer satisfaction, and more commerce.

How does leadership differ from management in the operations management system?

Leadership involves guiding and inspiring people, whereas management focuses on ensuring processes and systems are maintained.

How did Lowe's and Home Depot use supply chain management for competitive advantage?

Lowe's used it as an edge, while Home Depot revamped its supply chain to regain top market position.

How do machines contribute to the operations management system?

Machines are used to transform materials into products, and there is a strong link between machine quality and material quality.

Why is management important in the operations management system?

Managers ensure the system functions properly, preventing issues and improving product quality and operational efficiency.

What is a common misconception about supply chain issues during and after the COVID-19 pandemic?

Many blame the supply chain for shortages, whereas issues may also result from poor forecasting and company overreaction.

What lesson does operations management teach about business competition?

Many companies aim not only to make a profit but also to outcompete and potentially eliminate their competition.

What is the role of materials in the operations management system?

Materials such as raw materials, components, or assemblies are transformed into final products or services.

What is involved in a communications transformation process?

Messages or words are transformed into understood messages, leading to actions based on that understanding.

Why is money considered an input in the operations management system?

Money is essential for purchasing materials, hiring workers, and maintaining operations; without it, production stops.

What does the movement/storage transformation process involve?

Moving goods from one point to another in the supply chain or storing them until they are moved again.

How does multi-sourcing differ from single sourcing?

Multi-sourcing involves using multiple suppliers for the same product or service, while single sourcing involves choosing only one supplier.

What were the shortcomings of NAFTA?

NAFTA faced issues with the "free" movement of Mexican truckers across the US-Mexico border.

How does operations management relate to supply chain management?

Operations management and supply chain management are intertwined; successful operations rely on an efficient supply chain from suppliers to customers.

What does operations management encompass in a business?

Operations management includes planning, design, production, supply chain management, customer service, and handling product returns.

What are the new functions in the latest version of the SCOR model (2023)?

Orchestrate, Plan, Synchronize, Order, Source, Transform, Fulfill, Return, Regenerate.

What is the average size of a new distribution center today?

Over one million square feet.

What role do people play in the operations management system?

People operate machines, manage processes, and move products, requiring leadership rather than just management.

How did EDI function before the Internet, and how is it used now?

Previously, EDI was transmitted via private networks in set formats. Today, online systems convert transaction information into EDI formats for processing orders.

What is a key benefit of Free Trade Zones (FTZs) in the US?

Products can be imported, assembled, and exported without paying tariffs.

Why is sourcing important in supply chain management?

Purchased supplies account for a significant portion of manufacturing costs, making it essential to choose the right suppliers and cultivate strong relationships for better performance.

Which disciplines are integrated into operations management?

Quality management, industrial engineering, and inventory management are among the disciplines integrated into operations management.

What are the benefits and challenges of RFID tags in supply chains?

RFID tags offer quicker and more accurate inventory management but are expensive, have limited compatibility with some products, and faced security issues until 2018.

What tracking technologies are commonly used in supply chains?

Radio Frequency Identification (RFID) tags and bar codes.

What is single sourcing, and what are its advantages and disadvantages?

Single sourcing is using one supplier out of multiple options. Advantages include strong partnerships, but disadvantages include risk if the sole supplier faces issues.

What is sole sourcing, and why might it be used improperly?

Sole sourcing is when only one supplier is available, often due to patents or scarcity. It can be misused to bypass competitive bidding regulations.

What is the difference between sourcing and outsourcing?

Sourcing involves selecting suppliers for raw materials or services, while outsourcing is a strategic decision to transfer non-core processes to external providers.

How have the lines between Supply Chain Management (SCM) systems and Enterprise Resource Planning (ERP) programs changed?

They have become blurred due to the need for integrated information systems.

How do batched orders impact suppliers?

They make it harder for suppliers to forecast demand accurately.

How can advanced information systems affect inventory levels in the supply chain?

They reduce the need for excessive inventory by improving the accuracy of information, which helps lower supply chain costs.

What were the limitations of IBM 80 card column punch cards for inventory?

They were cumbersome, required transporting physical cards, and were prone to errors.

What was the initial objective of offshoring and global expansion?

To cut costs and control more of the supply chain from sourcing to manufacturing in lower-cost countries.

What is the primary goal of this chapter on supply chain management?

To provide insights into what a supply chain is and how it impacts daily life.

What was the result of Wal-Mart's expansion into Germany?

The expansion failed due to cultural mismatches, and Wertkauf, a similar German discount chain, was ultimately closed.

What happens in the exchange of goods transformation process in retail?

A customer exchanges cash or credit for a product or service, resulting in the customer receiving the product/service and the retailer gaining the ability to procure more goods.

What cybersecurity risk was highlighted in 2024?

A global system shutdown caused by an untested update to a security company's systems.

What is the significance of a systems approach to business survival?

A long-term focus and systems approach in operations management are crucial for planning and surviving future business cycles.

What examples illustrate world-class communications systems in supply chains?

FedEx's tracking system for packages, planes, and trucks, and BNSF railroad's system for monitoring and communicating with trains.

What is the role of fulfillment centers in e-commerce?

Fulfillment centers focus solely on handling e-commerce orders rather than mixing them with brick-and-mortar store support.

What did Peter Drucker predict about logistics and distribution in 1982?

He predicted they would be critical for cost reductions and competition in the future.

What unexpected outcome sometimes resulted from global expansion?

Higher costs due to transportation and supply chain inventory, leading to a push for reshoring or nearshoring.

How does the exchange of goods serve as a transformation process?

In retail, the transformation happens when a customer exchanges cash or credit for a product or service, stimulating future manufacturing processes.

What are the risks associated with extended global supply chains?

Increased complexity, risk of interruptions, and forecasting distortions (Bull Whip Effect)

What are the key components of the operations management system approach?

Inputs, transformation processes, and outputs (goods or services).

Why is supply chain management important to operations management?

It accounts for most company expenses and is often the primary interaction with customers outside the website.

What theoretical benefits does electronic commerce offer to supply chains?

It can reduce prices and costs through increased competition, reduced travel expenses, and automation of manual processes.

What does Thomas Friedman's "The World Is Flat" discuss about supply chains?

It discusses how globalization and digital connectivity have leveled the playing field for companies.

What does Thomas Friedman's "The World Is Flat" discuss regarding globalization?

It discusses how globalization and the Internet have leveled the competitive playing field.

How does working with suppliers strengthen the supply chain?

It ensures that suppliers are not the weakest link by understanding their needs and establishing long-term relationships.

How did Home Depot's expansion into China turn out?

It failed due to a lack of understanding of the market and culture.

How has the European Union (EU) Free Trade Agreement performed?

It has been successful, though tested by Brexit; the EU continues to function effectively even without the UK.

How has the term "supply chain" been used in media and advertising post-pandemic?

It has been used to explain shortages, even though actual distribution centers may be well-stocked.

How has globalization impacted operations management?

It has lengthened operations management chains and sometimes aimed to cut costs, though this goal hasn't always been achieved.

Why is operations management essential for business success?

It helps businesses meet customer needs, maximize profit, and outcompete rivals through efficient processes and management.

Why are centralized and coordinated information systems crucial in modern supply chains?

They are critical for tracking and managing all aspects of the supply chain, ensuring successful operations.

How does the visibility of supply chains change during normal operation versus during disruptions?

Supply chains are often invisible when everything works right but become noticeable when things go wrong.

What incident highlighted the importance of cash flow in supply chains?

The 2001 anthrax scare in Washington DC, where payments sent to a closed Post Office caused financial issues for an electric company.

What is an example of a Free Trade Zone in Panama?

The Colón Free Trade Zone (Zona Libre, Colón) supports global shipments without customs duties.

What is the SCOR model and what functions does it include?

The SCOR model, developed by the Supply Chain Council, provides a cross-industry standard for supply chain operations, originally including Plan, Source, Make, and Deliver; later updated to include Return.

What is the USMCA?

The United States-Mexico-Canada Agreement signed in November 2018 to address NAFTA's shortcomings.

What is the focus of Thomas Friedman's book The World is Flat?

The globalization of companies and their operations and supply chains, including the impact of outsourcing and offshoring.

What does the Operations Management/Supply Chain Management Star illustrate?

The interrelations between operations management, supply chain management, and other business disciplines.

What is the main goal of operations management?

The main goal is to transform inputs into finished goods and services while optimizing resources and processes.

What is necessary for cost savings from automation?

The new system must be properly implemented and effective; an ineffective ERP system may not yield cost savings.

When did the term "supply chain management" first appear publicly?

The term first appeared in The Financial Times in 1989, but was discussed in earlier papers by Oliver and Webber in 1982.

What are the drawbacks of sophisticated supply chain information systems?

They are vulnerable to cyber security risks and require effective delivery capabilities; a good website alone is not sufficient for success.

What should SCM information systems provide to ensure customer satisfaction?

Visibility throughout the supply chain and the ability for customers to track their orders.

How does Wal-Mart use EDI in its supply chain management?

Wal-Mart uses EDI to transmit point-of-sale data to headquarters and suppliers, helping to reduce the Bull Whip Effect and streamline inventory management.

How do warehousing and distribution centers differ?

Warehouses focus on storage, while distribution centers emphasize the rapid movement of goods through the supply chain.

Why is cash flow an important aspect of supply chain management?

Without effective cash flow, companies cannot pay suppliers or maintain operations, even if the supply chain design is excellent.

Can there be multiple transformation processes in the operations management chain?

Yes, the operations management chain may include more than one transformation process depending on the system's complexity.