Supply Chain Management: Key Concepts

What is a supply chain?

A supply chain links a company that manufactures or assembles a product (middle of chain/internal) with its suppliers of raw materials (upstream), and the distributors, retailers and customers of the products that it creates (downstream).

What is a push supply chain?

A system of controlling materials whereby makers and providers make or send material in response to a pre-set schedule, regardless of whether the next process needs them at the time.

What is a pull supply chain?

A system of controlling materials whereby the user signals to the maker or providers that more material is needed. Materials are sent only in response to such a signal.

What are buyer behaviour segments?

Behavioural segmentation involves dividing potential buyers into groups which define their usage rate, their brand familiarity and consumers whose buying patterns are determined by some occasions. They can be segmented by geographic, demographic, psycho-graphic and benefits.

What is inter-firm collaboration?

Collaboration with customer, suppliers and support firms.

What is the CSR triple bottom line?

Environmental responsibility, social responsibility and economic responsibility (profit).

What metrics and drivers are used in SCM?

Facilities, Inventory, Transportation, Information, Sourcing, Pricing related metrics.

Why should supply chain strategies be based on buyer behaviour segments?

It is critical is to understand the business strategies of the organisation, and the customers which the organisation serves. Customer segments drive supply chain strategy and management. If you don't know what your customers want, how do you know you're being effective in the marketplace?

How to align business strategy with SCM?

Marketing must focus on defining buyer behaviour segments based on customer knowledge of, attitude towards, and use of or response to a product. Logistics strategies must align well with buyer behaviour segments.

How does SCM support intra-firm collaboration?

Sales, Marketing, Manufacturing, Warehousing and Distribution may all have different goals. A SCM strategy finds the balance between the differing needs of each department, to reduce conflict and find a balance to meet business strategy.

What is the difference between a product and service based supply chain?

Service-based organisations such as banks, restaurants and management consultancies typically depend on human resources to transform inputs into service-based products, rather than machines to manufacture as in the case of product-based supply chains. Services are intangible.

What are the six SCOR processes?

Source, Make, Deliver, Return, Enable, Plan

What is the Supply Chain Operations Reference Model (APICS 2015)?

Supply-chain operations reference-model (SCOR) is a process reference model for supply chain management. This reference model enables users to address, improve, and communicate supply chain management practices within and between all interested parties in the extended enterprise.

Why is CSR an important part of SCM?

The degree to which organisations and supply chains consider CSR will depend not only on buyer behavioural segments, but also the degree to which their shareholders value these aspects and the countries in which they operate have CSR-related regulations.

What are buyer behaviours based on?

What customers value most (order winners): Variety, options, CSR, Availability, Delivery, speed, Product innovation/quality, Low cost, Service - personal or self. These segments consider demand profile: Volume, Where, Frequency , How A company can have multiple behaviour segments, and each must have its own SCM design/strategy