Supply Chain Management Ch. 1

Strategic Partnerships

"working very closely with our supply base to pick the right few, and then get much deeper within the relationship with those critical few."

Lean Production System

"Just-in-time" or "Toyota Production System", results in faster delivery times, lower inventory levels and better quality.

Third-Party Logistics Provider (3PL)

A company contracted to provide logistical services for a firm (FedEx, UPS).

Fourth-Party Logistics Provider (4PL)

A company hired to manage all of a firm's logistics and supply chain management capabilities.

Vertically Integrated Firm

A firm whose business boundaries include former suppliers and/or customers.

Global Supply Chains Advantages

A larger market for products; economies of scale in purchasing and production; lower labor costs; a supply base of potentially cheaper, higher-quality suppliers; and the generation of new product ideas from foreign suppliers and employees.

Supply Chain

A supply chain consists of the flow of products and services from raw materials suppliers, component and intermediate manufacturers, final product manufacturers, wholesalers and distributors, and retailers. Connected by transportation and storage activities, and integrated through information, planning, and integration activities.

Distribution Network

After designing and building, this ensures successful product delivery. There is a trade-off between the cost of the distribution network's design and customer service.

Supplier Certification

Allows buyers to assume the supplier will meet certain product quality and service requirements cover by the certification, thus reducing duplicate testing and inspections and the need for extensive supplier evaluations.

Right-Shoring

Combination of on-shore, near-shore and far-shore operations into a single, flexible, low-cost approach to SCM.

Supplier Evaluation

Determining the capabilities of suppliers. Potential suppliers are evaluated for a future purchase and when existing suppliers and periodically evaluated for ongoing performance purposes.

Operating Exposure

Government intervention or political instabilities causing supply disruptions, security concerns and potential changes in subsidies, tariffs and taxes; and failure to identify foreign customer needs and local reactions to products.

Reverse Logistics Activities

Intermediate and end customers may need to return products, obtain warranty repairs or may just throw products away or recycle them.

Customer Resource Management

Strategies regarding how to meet delivery due dates, how to successfully resolve customer complaints, how to communicate with customers and how to determine the logistics services required.

Bullwhip Effect

Supply chain forecasting, safety stock and production problems. Ripple effect, messing one part up messes up other aspects of the supply chain.

Process Integration

The coordination and integration of these processes among the focal firm and its key supply chain trading partners.

Six-Sigma Quality

A total quality management strategy, ensures continued quality compliance among suppliers and with internal production facilities.

Material Requirements Planning (MRP)

Controlling or managing inventory software system.

Supplier Management

Encouraging or helping the firm's suppliers to perform in some desired fashion, and there are a number of ways to do this.

Global Supply Chain Disadvantages

Fluctuating exchange rates affecting production, warehousing and purchasing and selling prices, or operating exposure.

Supply Chain Performance Measurement

Helps firms keep track of their supply chain mgmt. efforts; crucial to know whether certain strategies are working as expected-or not-before financial drains on the organizations.

Benchmarking

Improve over competitors' performance through trial & error (trying new ideas), increased knowledge of supply chain processes. Looking for ways to economize.

Inventory Visibility

MRP systems automatically generate an order with the manufacturer who sells the product, reducing the likelihood of stockouts or excess inventory.

Greenwashing

Making environmental claims for products that are exaggerated or misleading.

Second-Tier Suppliers and Customers

Many firms are extending the boundaries of their supply chains to include their second-tier suppliers and customers, logistics service companies, as well as non-domestic suppliers and customers.

Perfect Order Fulfillment

Orders arriving on-time, complete and damage free.

Ethical and Sustainable Sourcing

Purchasing from suppliers that are governed by the environmental sustainability and social and ethical practices.

Demand Management

Strategies and systems with the objective of matching demand to available capacity, either by improving production scheduling, curtailing demand, using a back-order system or increasing capacity.

Enterprise Resource Planning (ERP)

Systems can be linked throughout the organization providing real-time sales data, inventory and production information to all business units and to key supply chain.

Supply Chain Management (SCM)

The planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers and customers.

Business Process Reengineering (BPR)

The radical rethinking and redesigning of business processes to reduce waste and increase performance.