SCM 486 Exam 2
The buying firm must be highly skilled at ____________________________.
-Specifying Product Attributes -Forecasting Expected Requirements -Ensuring the right quality at a reasonable price (All of the above)
Many of the e-procurement software vendors fail to take into account __________________________ and getting suppliers to participate in the e-procurement system.
-The Total cost of implementing these systems -The difficulty of realizing savings during the development and deployment phases of the transition -The cost of training employees (All of the above)
A comprehensive JIT progress report indicates that supplier costs were reduced by ________ when they adopted the JIT system in cooperation with their customers.
11%
The JIT progress report mentioned in the textbook indicates that supplier quality improved by ______ percent since the JIT system was adopted.
26%
__________ percent of the firms surveyed using JIT practices in the United States indicated that they had serious problems regarding lack of support from engineering.
39%
Businesses that use reverse auctions, or e-auctions, have given testimonials of savings of more than ____ percent.
50%
The cost of raw materials has traditionally, been a serious concern of top management. Over the years, material cost as a proportion of total cost of the end product has risen sharply and is as high as ______ percent in some instances.
80%
The use of outsourcing has quickly become _____________ for an increasing number of businesses.
A Competitive Weapon
As EDI really takes hold and international EDI becomes more commonplace a major stumbling block will be overcoming the language barriers that now exist. The most widespread EDI language in the United States is _________________
ANSI X12 Standard
If suppliers fail to provide materials of _____________ on a regular basis, production slow-downs and stoppages will occur regularly.
Adequate Quality
Kanban is the Japanese word for _____________.
Card
The ____________ method s major disadvantage is its dependence on the judgment of its users. The system is largely dependent on the memories of personnel to explain what unsatisfactory or good means. With this method, there is no concrete supporting data.
Categorical
The advantages associated with implementing the ________________ evaluation program are that it can be implemented almost immediately and is the least expensive of the three evaluation systems discussed in the textbook.
Categorical
Supplier ______________ are very useful tools to evaluate the quality capabilities of a supplier.
Certification Programs
It takes time to ___________ of the workforce and _____________ relationships with suppliers.
Change attitudes/nurture long-term
The main elements of an EDI system are:
Computer hardware software, computer compatibility between the sender and receiver and subscription to a common network (all of the above)
As cooperation and relationships between suppliers and manufacturers build up in a JIT system, so do the opportunities to ______________________ and focus on ________________________.
Conduct an extensive value analysis/reducing the cost of parts purchased
_______________ and ______________ are necessary in order to keep costs down and create trust with strategic suppliers.
Cost reduction/continuous process improvement
The ___________ method evaluates supplier performance by using standard cost analysis.
Cost-ratio
One model that explains supply chain relationship management includes which of the following behavioral dimensions?
Counter Productive (lose lose)/Competitive (Win-lose) Collaborative (win-win)/ Cooperative (win-win) (A and C only)
A crucial issue to be considered is the relevance of _________ in the successful implementation of the just-in-time system in a country.
Culture
__________ materials are directly related to the production of the finished goods.
Direct
______ is the direct computer transmission of orders and other transaction information.
EDI
There are some definite benefits to utilizing ______. The first major benefit is reduced labor. Higher information quality due to a reduction in data entry errors also can be attributed to ______
EDI/EDI
The just-in-time (JIT) system is no longer a (n) _______________ in the manufacturing world today. In the face of intense global competition, many firms in the United States are looking at improved techniques to manage their manufacturing operations.
Esoteric Concept
All marketing strategies are compatible with the JIT system.
False
It is a good idea to implement e-procurement on systems that have a high supply risk and low profit impact, especially if there are a very limited number of suppliers to choose from.
False
Single sourcing advocates may want to address the following issues regarding long-term impacts of single sourcing. In the long-run, if everyone reduces their supplier base, there will be fewer suppliers to deal with and overall competition will decrease as there are fewer suppliers. A supplier consolidation will give suppliers less power in the long run.
False
The certification criteria can be changed and updated as re certification may be required. Thus, the hurdle can be lowered until there are a few suppliers left.
False
The ____________ is to provide a firm with component parts and raw materials. ____________ also must ensure that high-quality products are provided on time, at a reasonable price.
Function of Purchasing/Purchasing
Traditionally, long and infrequent production runs have in the past been considered beneficial for the overall productivity of a manufacturing organization. However, long production runs usually lead to ____________ of raw-material and finished-goods inventories.
High levels
The second group of methods used to reduce the number of suppliers a firm uses is what the textbook refers to as the _________ methods
Hurdle
__________ materials are any commodity or service that is not directly involved in the production of finished goods.
Indirect
JIT purchasing facilitates reduction in _____________ and the associated _____________ costs.
Inventory Levels/Inventory Holding
The transition to ______ has not necessarily been a smooth one for many companies in the United States. But this does not imply that switching from a pure ____ system to a __________ system was a mistake for most companies.
JIT/MRP/JIT or Hybrid
One of the most crucial elements of the ____________ system is small lot sizes.
Just-in-time
The role of the purchasing function in a manufacturing organization has become increasingly important. The _____________ production control system focuses on reducing both raw materials and work-in-process inventories.
Just-in-time
The ________ JIT production system has been erected based on the premise of minimizing _________________ (waste) by reducing or eliminating discrete batches.
Kanban-controlled/work in process inventories
There are many benefits to using EDI. For a smaller company, EDI may help ________
Keep a valued trading partner or customer, gain new customers or trading partners (all of the above)
JIT is also referred to as _______ production.
Lean
The __________ method is probably the most commonly used evaluation method.
Linear Averaging
Very often, resistance is encountered because the employees are required to change their _____________, or because they interpret the new system as being _____________ jobs.
Long-standing work habits/ a threat to their
_____ purchasing is concerned with critical maintenance and replacement parts, highly engineered machine parts, and manufacturing equipment..
MRO
One problem with indirect purchasing is the tendency for employees to intermittently buy indirect items off contract. This practice is referred to as ________________.
Maverick Purchasing
Top management support has long been recognized as one of the _______ important ingredients necessary for the ___________ of any organizational change, and the same holds true for the ____________ of an EDI system.
Most/Introduction/Introduction
The main arguments for __________ sourcing are competition and assured supply.
Multiple
Much debate has taken place concerning the number of suppliers a firm should use. One side of the debate is the _____________ side. This involves the use of two or more suppliers. The other side of the debate is the ____________ policy, in which only one supplier is used to supply a particular part.
Multiple-sources/single-source
Unlike the barcode-based tracking system, a radio frequency identification system offers a __________________________________ .
No - Contract, No-line-of-sight reading and tracking system
______ purchasing is a term used for purchasing office equipment, furniture, office supplies, forms, computers, travel services, maintenance services, light bulbs, janitorial supplies, and many other relatively low-cost items.
ORM
Buyers should be experts ___________ and in specific _____________.
On the industry/raw materials or component parts
Indirect purchasing can be divided into two categories:
Operating resource management and maintenance repair and operations
There are two main types of kanban: __________ signals the need to produce more parts. Each kanban is physically attached to a container. __________ signals the need to withdraw parts from one work center and deliver them to the next work center.
Production Kanban, Withdrawal Kanban
To extend the commitment to increasing productivity in all departments within a given facility, many companies have adopted the concept of __________.
Profit Centers
Thus, a kanban system is referred to as a __________ because the kanban is used to ______ parts to the next production stage only when they are needed.
Pull System/Pull
In a ____________, removing an end item (or a fixed lot of end items) triggers the order release, by which the flow of materials or components is initiated. In contrast, ____________ allow for the production or material flow in anticipation of future demand.
Pull System/Pull Systems
__________ professionals are primarily charged with the responsibility for controlling the total cost of ownership (TCO).
Purchasing
Effective development and implementation of the just-in-time system requires integration of important functional areas such as ______________________. (Choose the best answer)
Purchasing, Manufacturing, Quality, and Production and transportation (all of the above)
_____________________ is a universal term given to any technology that uses radio waves to identify and track items.
Radio Frequency Identification, RFID
A more devastating downside of ______________ is the buyer/seller relationship damage that may result from this method of buying. The buyer runs the risk of alienating both current and potential sources for the goods/services.
Reverse Auctions
With __________, conditions are somewhat different. First, the buying firm initializes the auction by submitting a description of the product or service. Sellers then place bids based on their offer to fulfill the buyer's needs.
Reverse Auctions
__________ may not be the solution for all commodity buying. As an example, if there are too few sellers, ___________ will not yield the best price.
Reverse Auctions/Reverse Auctions
The _____________________ process is based on the idea of efficient resource coordination and teamwork.
SCM
Lower levels of __________ contribute significantly to reduced working capital requirements for the firm.
Safety Stock
The negotiated agreement between buyers and sellers includes the following terms: the type of material, ________________, stocking policy, and delivery requirements.
Scope of contract Price Billing Policy (All of the above)
The major arguments in favor of _________ sourcing are that with the certainty of large volumes that the supplier can enjoy lower costs per unit and increased cooperation.
Single
Because of ____________ and frequent delivery schedules, suppliers are in a position to receive quick feedback regarding any potential manufacturing or design problems. Also, manufacturing is in a position to implement engineering changes quicker because of the _________ inventory levels.
Smaller lot sizes/reduced
E-Procurement benefits by category are: Indirect, Direct, and __________
Sourcing
Traditional purchasing professionals who act as little more than order placers are giving way to __________ involved ___________ managers who control vital inputs to the production process.
Strategically/Analytical
In addition to the strategic _________ profiles, the buying firm should clearly establish expectations for the strategic _________ and discuss future product and _______ development plans; this is typically done with an annual review period.
Supplier/suppliers/supplier
Buying firms select _____________ based on their capabilities, and not purely on the competitive process.
Suppliers
The _________ see little incentive in adopting the JIT approach when the primary benefits of the program go to the buyer.
Suppliers
Recognizing that purchase price is but one element of the total cost picture, the scope of ____________ goes far beyond the purchase price for any given item.
Systems Contracting
The _____________ process requires the use of a negotiated agreement between buyers and sellers.
Systems contracting
_________________ is a stockless inventory method for ordering and stocking MRO and related items. The use of ________________ will aid the firm in reducing ordering and inventory costs.
Systems contracting/Systems contracting
There are many benefits to using EDI. For larger firms, the main benefit(s) is (are) generally ________________
The cost savings, to be known as a leading edge company (all of the above)
Many firms report lack of support from __________ as being one of the major problems encountered in the implementation of JIT (Lean) purchasing.
Their employees
The way in which the process of developing and implementing an EDI system is managed can greatly influence the success of implementation. Four key areas are:
Top Management Support Commitment to the project Influence Institutionalization
Anything that will immediately impact profits or bottleneck your operations is not a good place to experiment with a new electronic procurement system.
True
Buyers and sellers located on different continents can meet electronically. E-sourcing will also lead to higher transactional accuracy and cost reductions for the entire supply chain. E-sourcing creates value by : 1. Reducing the total cost of ownership. 2. Streamlining the purchasing process and 3. Business innovation
True
E-purchasing has lead to significant cost saving and coordinated efficiency.
True
It is well documented that JIT reduces physical inventory level. Reductions in physical inventory will also have a favorable impact on: Reduced insurance premiums associated with the storage of inventory, Reduced inventory holding costs, Reduced labor cost in store rooms and material handing costs, Reduced clerical and administrative costs, Reduced waste from the manufacturing process, Reduced obsolescence costs, Reduced deprecation of handling and storage equipment, Each of the cost savings will result in a leaner more profitable operation. (T/F)
True
RFID tags can be read through snow, fog, ice, paint, and crusted grime, unlike the barcode system. The tag also can be programmed to hold information such as the item s serial number, color, size, manufacture date, and current price, as well as a list of all distribution points the item reaches as it moves before arriving at a store.
True
Rule One (1) of the dual card kanban is: No parts are made unless there is a production kanban to authorize production. If no production kanban are in the in box at a work center, the process remains idle, and workers perform other assigned activities. This rule enforces the pull nature of the process control. (T/F)
True
The advantages of multiple sourcing can be viewed as the disadvantages of single sourcing and vice versa.
True
The counterproductive relationship is undesirable because: 1) it does not promote a positive rapport between buying and supplying firms involved and 2) neither organization achieves its goals.
True
The following are key mistakes in the make-versus-buy decision: 1) In most cases, businesses are not proficient at identifying their core capabilities. Buyers usually rationalize in-house decisions based on capacity capabilities. 2) Buying organizations wait too late to assess the value of consultants or strategic partners. 3)Buyers do not recognize that the product or service is approaching maturity. 4) There are always new competitors with new technology attacking the market.
True
The following practices are considered essential for a comprehensive JIT implementation: Regular maintenance, Diverse workforce, Supplier development, Kanban production control.
True
The following practices are considered essential for a comprehensive JIT implementation: Uniform production (also known as heijunka), Quick set times, Small lot sizes, Short lead times.
True
The kanban card contains the part number, the part description, the type of container, and various workstation information.
True
The kanban production control system uses simple, visual signals to control the movement of materials between work centers as well as the production of new materials to replenish those sent downstream to the next work center.
True
The seven (7) steps to effectively implement e-procurement are: 1. Start with non-critical items. 2. Bring all internal stakeholders on board with your new procurement process to establish internal customer behavior. 3. Streamline, map, test, troubleshoot, and improve the process before expanding it to external suppliers. Work with a favored supplier to test the system. 4. Leverage your system once it s running. Exploit your full purchasing power by using reverse auctions. 5. Aggregate buyers within your organization to increase your purchasing power and gain better pricing. 6. Use an incremental approach to expand your system. 7. Once the bumps have been ironed out of the system, move on to the manufacturing operations.
True
To maintain trust and cooperation between buying and selling firms, reverse auctions should be used carefully.
True
According to the Lewin-Schein theory of change the change process consists of the following three steps:
Unfreezing/Moving/Refreezing
_____________ gives a firm more control over the part in question. However, the greater the percentage of internal parts an assembly firm produces, the greater their need to have ___________ in each of the areas involved.
Vertical Integration/Competence
JIT is Toyota's manufacturing philosophy to minimize _______, and the JIT production system is a subsystem controlled by ________.
Waste/Kanban
Relationships with strategic suppliers need to be closely managed. One way to keep up on supplier relationships is for a __________ organization is to compile ___________ for each strategic __________.
buying/supplier profiles/ supplier
________________ relationships are those in which each organization (buying and supplying) is so focused on getting what is best for it that each puts the other at a disadvantage.
counterproductive
In a reverse auction the competition between the sellers drives the price _______, instead of _______, so the buyer pays _________ at the expense of the seller.
down/up/less
A ________ approach can be used that is known as ____________. With this method, the supplier base is expanded without increasing the actual number of suppliers.
hybrid/cross-sourcing
Grade methods are those that are based on a score or grade given to the supplier by the buyer for some attribute. The most common attributes are _____________________.
quality, price, and delivery
